- Contingent Workforce Strategies 3.0 - http://cwstrategies.staffingindustry.com -

Once hot, vendor neutrality may not be your best bet

Positions, perspectives and ideas evolve over time. People make decisions based on known information and sometimes unknown variables. Early on, managed service provider programs and vendor management system programs were formed on the assumption that the supplier couldn’t be trusted. As a procurement manager years ago, I encountered suppliers that charged up to 300% markup on clerical positions, which created a deep sense of mistrust. I know I was not alone.

In order to combat this mistrust, organizations brought in MSP and VMS programs to hold suppliers accountable and create competitive marketplace vendor-neutral solutions. For fear of suppliers unduly influencing hiring managers, no-contact rules were put in place. At the time, these programs valued response time as opposed to quality of performance and lowest cost as opposed to candidate success.

While this approach sometimes yielded near-term savings for many programs, it proved to be unsustainable. Candidate attrition, supplier response rates and end-user satisfaction often are casualties of this aggressive approach.

The market has begun to recognize this. While neutrality still needs to be incorporated in contracts and managed in a successful contingent workforce program, the trend today is collaboration rather than no-contact. And the drive toward collaboration is enabled by a more educated contingent workforce manager and more sophisticated MSP and VMS solutions being brought to bear. At the same time, many sophisticated buyers are looking to form strategic partnerships with fewer suppliers as opposed to selling their MSP with dozens.  These successful relationships are based in a spirit of mutual accountability, transparency and shared success.

So what is the role of neutrality in a program and when should a buyer consider a more strategic relationship?

Neutrality works best when:

Sole-source and primary relationships work best when:

While these rules of thumb are not always true, by questioning the knee-jerk response towards pure neutrality and considering more collaborative strategic approaches with the supplier, you can ensure that your program is set to succeed in the 21st century economy.