Often a high budget requirement for organisations in any sector, the high direct and indirect costs associated with this spend frequently only get challenged by individual periodic negotiations between the hiring manager and the Agency themselves. A Managed Service approach has replaced this 1-1 way of contracting, leading to big cashable savings, a better-quality staff pool to select from and huge efficiency savings around ordering, authorising timesheets and invoicing.
Managed Services is a concept that was implemented in temporary recruitment around 15 years ago, and commonplace now is the Neutral Vendor Managed Service model. Few organisations rely on staff from just a single Agency so a lot of resource is taken in managing multiple suppliers for different skills requirements.
Q) What does ‘Vendor Neutral’ mean?
A) Vendor Neutral recruitment means there is no connection or affiliation with any recruitment agency. Our Managed Service Provider doesn’t own a recruitment agency, nor do they have any vested interest in 3rd party recruitment agencies. You maintain the relationships with the Agencies you want, they manage the costs and quality requirements for you
Q) What are the benefits of the Vendor Neutral solution?
A) Our customers can demonstrate;
- Increased choice of candidates
- Better quality of candidates
- Significant cost savings – direct and indirect
- Reduced exposure to risk
- Increased fulfilment levels
- Better customer processes
- Full visibility and control over spending
- Increased local candidate and supplier engagement
We reviewed a multi-site client with a very wide range of skills required from its Temporary staff that had spread its sourcing to over 50 different Agencies with, inevitably, a raft of different rates, agreed mark-ups, T&Cs and so on.
Many of these were deemed to be ‘key suppliers’ so there was a reluctance to affect the relationship with those so we produced a Feasibility Study recommending using a Vendor Neutral Model with a provider who would work with those incumbents – so the same staff were still provided by the same Agencies giving a seamless transition.
Most of the Agencies in question were already on the books of the Managed Service Provider.
The VN provider reduced the individual Agency’s profit margin to a realistic agreed level, (not affecting the worker’s rates) and gave a single point of ordering and a web-based system for submission and authorisation of timesheets.
The relationships with the key Agencies are still as they were but the direct costs of hiring through those Agencies has been reduced by around £300K over the Agreement. The number of individual invoices that needed processing has also been reduced from around 2000 to 100, saving many man-hours in admin. There is now a single point of ordering, dedicated 24-hour Account Managers, single point of query and single point of invoicing. The VN provider is also responsible for full Quality Control of the Agencies and their staff, as well as all the legal and regulatory compliance involved.