For staffing firms who want those contracts, working with a VMS or a Managed Service Provider (MSP) is an unavoidable reality. While some of the challenges are well known among most staffing professionals, VMS business doesn’t have to just be a “necessary evil” — working with these vendors and systems can also benefit staffing firms who put in the effort to do it right.

With that in mind, let’s dive deeper into the challenges, benefits and best practices of working with VMS/MSPs in staffing.

Top Challenges

VMS and MSPs often get a bad rap among professionals in the staffing industry. The negative connotation can stem from challenges like these:

Lower profit margins. To even be considered for a spot on a VMS vendor list, staffing agencies often have to lower their rates, which can eat into profit margins.

Lack of personal connection. Because the VMS model eliminates personal contact with hiring managers, recruiting professionals often are left with unanswered questions about key desired traits for a position, like personality fit.

Stiff competition. A typical VMS listing has 30-40 vendors competing. And since there’s no contact with a hiring manager, the selection largely comes down to price.

Hiring challenges. To compete for positions, staffing firms must have strong recruiters — but many strong recruiters don’t want to work in the high-pressure, low-margin VMS environment. This conundrum can cause hiring challenges.

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Top Benefits

While at times challenging, there are also benefits and opportunities when it comes to working within VMS/MSP systems.

Find new business. As more companies use VMS system to fill positions — and as other recruitment companies fail to jump on board — a steady supply of available business can help drive company growth.

Match candidates efficiently. In the traditional staffing process, understanding the client’s needs and matching them with candidates takes time. With VMS, everything you need to know is available immediately, and you can use analytics and sorting to respond to your clients rapidly and efficiently.

Avoid communication gaps. At a busy staffing firm, it isn’t always possible for the client to reach the exact right person, which can cause communication delays. But with VMS proxy or delegate features, a coworker can step in and fill the gap to prevent any hiccups.

Track the recruitment process and use data to improve. Using a VMS, staffing firms can track the entire candidate lifecycle down to a very granular level of data. These analytics, such as how many calls required, turnover rates, bottom line cost, etc., can help staffing firms improve their processes.

Best Practices

Finally, let’s talk about best practices for staffing firms who do use a VMS system. You can make your life easier by following these VMS tips:

Confirm time entry. Make time each week to ensure that what is in the system matches up with what you know to be true. If issues arise, contact your VMS or MSP billing issue help system immediately.

Check for rejected time cards. If you’re seeing rejected time in your system, it’s important to keep up on it and make sure that you’re following up to correct and resubmit.

Double-check your bill and pay rates. Small errors here can have consequences. Check that your bill and pay rates are correct in the system.

Upload all documentation. It’s imperative that new employees have correct paperwork in the system before they start on a job. If not, you might not get paid.

Measure your metrics. Make sure to track and report on metrics like gross margin, number of requisitions per month, submission-to-hire ratio, etc. This will allow you to know the true value of VMS business for your agency.

We hope this article was illuminating when it comes to doing VMS business. While challenging, VMS and MSP business can also provide significant opportunities for those staffing firms who do it right.

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In 2005, I got a job managing the contingent workforce for a large healthcare benefits company.  Managed services was a new concept to me, and vendor management systems were not commonly available. The staffing company that previously led the program handed us a stack of papers as they walked out the door and mumbled, “Here’s the history of the program.” Scrambling to understand what we’d just walked into, we immediately began to establish ourselves as key advisors to our client sponsor, implement operational processes and create a supplier program based on vendor neutrality. We wanted to maintain a fair and level playing field for the program, the client and the suppliers. This meant having one unalterable contract with terms that did not favor one supplier over another. And this worked for a long time.

In 2012, we implemented a VMS tool for the program and added protocols to ensure vendor neutrality,  such as establishing distribution lists, managing supplier performance, limiting contact with hiring managers and sending out requisitions to suppliers at the exact same time. It was a well-oiled machine  that elevated our MSP reputation in the marketplace. Suppliers liked working with us to a large degree. Of course, there were those that wanted exclusive opportunities and manager relationships, but our thinking at the time was that it was the MSP’s responsibility to have a fair and equitable program while also removing operational tasks from the hiring manager’s plate. We were in charge of ensuring jobs got filled on time with qualified candidates at the lowest cost. Many MSPs operated this way.

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Eventually, as MSPs matured and client program models evolved, MSPs began creating groups dedicated to evaluating suppliers. Who were the best partners? How many programs were they in? Diversity players were identified, but processes around manager contact, distribution fairness, contract terms and so on remained the same. And for the most part, they still remain today.

But given the lay of the staffing industry, is vendor-neutrality an unavoidable requirement?

The US staffing industry alone has over 28,000 suppliers in its ecosystem. Are they all created equally? Should niche providers have direct access to managers? Should diverse companies get a head start on orders? Is it wrong to value your top performers over lower-performing ones? With technologies changing at a rapid pace, do IT partners need to have live discussions with key stakeholders to find the right candidate?

Consider this: If the spirit of the program is to fill jobs on time with the most qualified candidate at the lowest cost, then the supplier you use needs to be the one who will do just that. You want the best supplier working on your orders, and the only way to get the best is to open your program and allow for the superstars to shine. The old saying, “Life isn’t fair,” may be the answer to whether vendor neutrality is still necessary.

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While managed service providers claim they can connect agency supply to hospital demand in the fastest and most efficient way possible, any staffing firm forced to work through an MSP-owned vendor management system knows that’s not true. In fact, according to a survey of staffing agencies conducted by Hallmark Health Care Solutions, nearly three-quarters (70.37%) of agencies see less success when an MSP manages recruiting and placements with hospitals. And an overwhelming 82.14% said they prefer not to work with VMS technology that is “owned by another staffing company.”

The more successful alternative is a vendor-neutral solution created, implemented and maintained by a pure technology company that has no investment in the staffing function. In this situation, their sole business model is centered on provisioning technology, so their business incentive is exclusive to serving the agency rather than its own conflicting interests. That alignment of interests yields numerous benefits for the staffing agency.

Part I of this series on why vendor-neutral technology is the business-friendly solution for staffing agencies focused on strengthening the client relationship and technology consideration. Part 2 delves into conflict of interest and operational efficiencies when it comes to selecting a VMS solution.

Eliminate conflicts of interest. There are additional financial considerations that explain why agencies that develop their own VMS’s de-prioritize investments in them. A competitor-owned MSP, for example, is incented to place its own staffing resources first and foremost, even if they’re not the fastest, most cost-effective, or best qualified. Remember, if the MSP with the contractual relationship with the hospital doesn’t fill a significant portion of that hospital’s open needs internally, they will lose money. Thus, they need their own technology to give themselves advantage in the staffing process.

That inherent conflict of interest is why most agencies experience less success in placing candidates when going through an MSP. In turn, avoiding conflicts of interests makes more placements more likely to be successful.

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Reduce workload. In line with the previous point, competitor-owned technologies are not incented to make the staffing process easier for the other agencies that use their solutions. Increasing effort and difficulty often ends up being a feature, rather than a bug, of the experience.

A good example here is communication. A non-neutral solution, in pursuit of its own competitive advantage, wants to control both the flow of information and the nature of the agency-hospital relationship. A vendor-neutral solution simply has no interest one way or the other, but in line with the points made above – driving greater efficiencies and helping the agency be more successful – will focus on facilitating connections, not restricting them.

With a vendor-neutral technology, hospital hiring managers can put comments into the job order that get emailed directly to the agency. No one needs to pick up a phone, email, text, or otherwise hound someone for the information needed to make a successful placement. Instead of gatekeeping, the technology facilitates bidirectional communication between supply and demand. That, in turn, hastens how fast can clinicians get submitted, interviewed, and placed at the bedside.

More placements, more quickly. Eliminate risk of poaching, speed up the whole process, get paid sooner, and facilitate relationship-building: that’s the power of vendor-neutral technology in staffing relationships. The bottom-line is that a vendor-neutral solution is more likely to offer the features and functionality agencies need to have a better chance of placing people into open roles, and to do so faster than when they’re trying to work through a platform owned and operated by a competitor.

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The post How to Place More Nurses in Hospitals, Faster, by Using Vendor-Neutral Technology: Part II appeared first on Paragon Strategic Staffing.

Technology owned by a competitor won’t get your nurses placed the fastest. Only vendor-neutral solutions will.

In today’s world of healthcare nurse staffing, success is all about speed. Hospitals can’t serve patients and staffing agencies can’t generate revenue until the nurse or other clinician has been placed at the bedside. Making that placement quickly and easily, however, hinges on the tools and vendor management technology used. Here, vendor-neutral options significantly outperform those owned by a Managed Staffing Provider (MSP) or competing agency.

The pandemic has made success in staffing placement all the more urgent: Nursing vacancy rates have doubled or more in some places, even as more beds are occupied than during the previous height of the pandemic. Hospitalizations increased 500% just this past summer alone, according to The New York Times.

MSPs claim to solve this problem, of course. They say they can connect agency supply to hospital demand in the fastest and most efficient way possible. However, any agency forced to work through an MSP-owned Vendor Management System (VMS) knows that’s not true. In fact, according to a survey of staffing agencies conducted by Hallmark Health Care Solutions, nearly three-quarters (70.37%) of agencies see less success when an MSP manages recruiting and placements with hospitals.

So, it’s no surprise that an overwhelming 82.14% of agencies said they prefer not to work with VMS technology that is “owned by another staffing company.”

In Part I of this article series on why vendor-neutral technology is the business-friendly solution for staffing agencies, we focus on strengthening the client relationship and technology consideration. And in Part II, we’ll delve into conflict of interest and operational efficiencies when it comes to selecting a VMS solution.

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You can focus your efforts better and strengthen client relationships.

MSP-owned VMS technology withholds (or simply doesn’t collect) key information because it’s not in the best interest of the MSP to highlight or disseminate that data. A vendor-neutral solution, by contrast, will shine a light into all the dark corners of the staffing process, which enables agencies to make better decisions. For example, you can see if candidates have already applied for a given role or not, so you can identify orders where there’s little to no competition. Or you can pull out orders with the least number of documents required for easier placements.

That kind of information isn’t just good for agencies; it’s good for their hospital clients too. Being able to run informative reports for clients – “You got 40 submissions today, with 23 interviews and eight offers” – strengthens relationships because the client can see firsthand how the agency is working hard for them.

Get best-in-class technology delivered by teams whose sole focus is tech.

 Staffing agencies work on margins that force them to focus on volume and on recruiting, not on hiring tech companies or in-house staff to work on technology. So, groups that develop their own VMS tools will always treat the technology as a secondary priority, even if it’s their own. By contrast, a pureplay tech company will continuously reinvest in ensuring their technology is the best it can be, because the technology is their product.

In turn, that translates into improved user experience, better functionality and ultimately a more effective staffing resource. For instance, if the agency using the VMS wants to build an API between its applicant tracking system, job boards and the VMS to reduce manual labor inputting data, a vendor-neutral company is going to be willing to invest in that effort. In the end, the agency and the tech company share the same agenda: helping the agency successfully place candidates.

Don’t miss out on Part II of this article coming out next week!

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The post How Staffing Agencies Can Place More Nurses in Hospitals Faster By Using Vendor-Neutral Technology: Part I appeared first on Paragon Strategic Staffing.

But a key question is: Who owns and manages the extended workforce – human resources or procurement? In today’s world, each department as differing and often competing goals – HR focuses on benefits, while procurement focuses on value.

And these goals can compete with one another. For example, in executive searches, if a search firm has an ideal candidate for two prospective placements, but one company tries to save money, the natural inclination is for them to place that individual with where they’re going to get more money. So, while HR may want the best talent, but Procurement is trying to lower costs, there is naturally going to be some head-butting.

And similar issues arise when it comes to the extended workforce. Part of the way to figure out who should own it is to examine a few factors:

Types of workers. As companies become more agile and adaptable to market pressures, how they can respond in real-time to those challenges becomes paramount. Days or weeks without a worker can mean the difference between being number one in your space and being left behind. Some organizations may rely more heavily on temporary staff augmentation while others could have more permanent statement-of-work-based (SOW) workers. While both require input from HR and procurement, procurement is more naturally suited to SOW than HR and vise versa for staff augmentation.

Departmental manpower. Because HR already owns the employee workforce, some would argue that it only makes sense to move the nonemployee workforce under the same umbrella. But the questions are: Do they have the internal workforce to own it? Procurement may have the employees to own and oversee the program so it may make more sense for that department to own it. Shifting those resources to HR could be another solution.

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Visibility Issues

Ownership of the workforce is one thing. Visibility is another, and adopting technology solutions can help solve visibility issues. The knowledge exchange, insights, and visibility from HR and procurement collaboration is highlighted when a single tool is adopted. For example, Utmost Extended Workforce System (EWS) seamlessly supports the external workforce program in conjunction with the Workday employee population to help both teams find success in their roles.

When the C-suite is looking for information on the total workforce, and you have one system for employees and a legacy VMS, or worse – a spreadsheet – for nonemployees, how do you get them the data they’re looking for? How do you easily collect it? How do you assimilate it? How do you present it?

For example, enterprise leaders often ask for a count of how many people they have in country A or geography Y. But first, what do you mean by “people?” Is it how many people are getting work done, or how many people are in the building?

The Criticality of HR and Procurement Alignment

In today’s economic climate of uncertainty and volatility, organizational change is necessary to remain viable and to grow even stronger. This partnership will standardize traditional contingent workforce management processes and provide a view into your total external workforce in conjunction with your employees.

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