We at The Principle Group are experts in Managed Service Providers (MSP) which is an outsourced agency that manages the contingent worker program (temporary staffing) of a client company by managing its preferred staffing agencies. We have a team of program managers and coordinators that help the client company source and manage temporary workers from their preferred staffing agencies.
We at The Principle Group expertise in Vendor Management System as well (VMS) which is merely the software/website that the client company purchases or licenses to enable the MSP to run the contingent worker program by allowing all transactions to happen online. This involves distribution of temp requirements (reqs) to staffing agencies, collection of candidate submissions, interview scheduling and coordination, job offers, billing and timecards, etc.
How Staffing Worked For The Principle Group
Large Fortune 1000 companies have always hired part of their workforce as contractors or temps. The process of bringing these temporary workers onboard was very cumbersome and inefficient. The process would typically work something like this
A hiring manager would get approval from her boss to hire a temp
Hiring Manager would search for a staffing agency by calling different agencies her friends or colleagues recommended or she found in the Yellow Pages
Sometimes, the company may have approved suppliers
· The staffing companies would then source candidates and start sending Hiring Manager resumes
· Hiring Manager would pick a candidate from those submitted
· If the staffing agency was new, she would sign a Master Services Agreement (MSA) with them, and cut a Purchase Order (PO) to the new staffing vendor and contractor could start work
On the Sales side, staffing agency sales reps would be roaming the halls of her company dropping off their cards, meeting potential client managers, taking them out to lunch/golf. There is no consolidated requirement list at the company and no way to predict who might have the next requirement- so the best way is to ‘spray and pray’.
Birth of Managed Services Provider (MSP) for Staffing
In the mid-90s, some of these largest companies decided to make this process more efficient and reduce costs by outsourcing the management of this onboarding and management of temp workers to an outsourced agency in exchange for a few percentage points in cost. Thus the Managed Services Providers (MSPs) were born. A Managed Services Provider is a company (not a software) that is a specialist in managing such temp worker programs, We at The Principle Group are experts. They work for the client and act as an independent and unbiased management interface between the client’s hiring managers and the staffing vendors. Leveraging the VMS for automated transactions, they manage the procurement process like umpires and coaches which typically means overseeing the following activities
· obtaining the requirements from the client managers
· transmitting the requirements to the staffing agencies
· ensuring the candidates are selected and onboarded
· collecting timesheets, getting approvals, payment and paying the agencies
· managing supplier performance with periodical scorecards
Oftentimes the MSP may conduct a joint clarification call with the manager with all the staffing agencies listening in to enable all the staffing agencies to get the same information from the client.
A lot of the earlier MSPs were divisions of staffing companies as they were born out of staffing agencies that had the expertise to manage such programs. However most are vendor-neutral these days which means they are not allowed to favor their sister or mother companies in any way.
History Of Vendor Management Systems (VMS)
VMS systems are software systems (websites) that allow the MSP to run the client’s temp worker program. This may or may not belong to the MSP provider. The reason for this is that clients look at these two things differently. MSPs are selected for their Services and the VMS is selected for the software’s features.
A VMS system typically performs these tasks
· Interacts with the client’s HR system to pick new reqs
· Blasts these reqs out the staffing agencies
· Tracks metrics like- how many days staffing agencies take to submit candidates, what their rejection rate is, if selected- if the candidates back out, whether the agencies rates are in the ballpark of the agreed to rate card, etc.
· These metrics are reviewed often by the MSP and the badly performing agencies are warned/booted out and new agencies are brought in to replace them