Vendor Management Systems: Staffing firms must define business needs and choose between hype and function.
Vendor Management Systems (VMS) first appeared on the market in 1997. Despite several lifetimes from a technology viewpoint, the definitions and interpretations of VMS are still inconsistent. About all that staffing firms can agree on is that they change the relationship with the client and not always for the better.
Still, one recent contributor to the identity crisis that VMS solutions must deal with is that some staffing software vendors have muddied the waters by offering Internet-based Client Portal solutions and calling them VMS solutions.
Right now you may be asking, "What's a Client Portal?" And that's where the confusion arises. There is quite a bit of overlap in functionality between the two yet there are also some critical areas of difference. The purpose of this paper is to help you to distinguish between the two types of applications and offer some insight into which solution may be right for your staffing firm.
Now let's get started by going into more detail by defining what a VMS solution is and how it works.
Vendor Management Systems
Vendor Management Systems were designed for the customer of the staffing service to assist them in managing their contingent workforce. The focus is on providing insight into how each vendor is performing in comparison to one another, with sometimes extensive metrics.
Unique VMS Functionality
Following are the core features that are in a Vendor Management Solution that you probably won't find in a Client Portal application.
1. Job Orders In most VMS solutions, job orders are entered by the client and then routed appropriately within the organization until complete approval is received for the requisition. The client controls this approval routing, and no staffing vendor receives notification of the job until it is approved.
2. Tiered Job Distribution After job orders are approved, the client may hold the job in order for Human Resources to check their bench or other internal skilled resources. After deciding to release it to the staffing vendors, the job is released to the vendors that are deemed appropriate by the client. First, the top tier providers are sent the job order. If the position is not filled within a certain number of days, it will be sent to second tier vendors, and so on. A VMS product will automate this process.
3. Automated Process for New Hires Once an employee is filled on the job, a series of automated processes begin, all of which are determined by the client. Examples may include sending alerts to IT in order to get the new employee an email address, computer, phone directory, swipe card, and more. An alert may go to Accounting to give them a heads-up about an incoming invoice, and an alert can go to the hiring manager to ensure they are prepared for the new employee.
4. Track Time Against Projects and Budgets HR Managers or department managers can track their new hires time against their department or project budgets to ensure compliance. Alerts may be configured to notify the manager when they are within range of meeting their budgets. Also, the employee can track their time against a particular project or set of tasks. The manager can monitor this.
5. Supplier Performance Reports VMS applications offer supplier performance reports as well. There are, of course, reports about who is offering talent at the best bill rate. There are also reports that indicate who can fill jobs the quickest, who is supplying the most resumes, and more.
VMS Focus
The focus of Vendor Management is the client, not the staffing service. It is designed and marketed (correctly) as a tool that will reduce markups and allow clients to save money on contingent staffing. For clients, it becomes all about the numbers, reducing contingent staffing vendors to commodity brokers.
The client is in complete control; the staffing service has no control. The focus is on bean counting not relationship building and quality of service. The staffing company has no insight or say into how the workflows are configured, who get what job orders, and more. In an effort then to achieve some level of control of this situation, Client Portals were developed that offer staffing firms a means to give their clients most of what they really need, while preserving the staffing firm's ability to manage the relationship. Let's look at what a Client Portal has to offer.
Client Portal
Internet-based Client Portal systems are designed with the staffing service in mind in order to help them support closer client relationships. It ties the client to the staffing service by providing immediate information to the client. Client Portal offerings are capable of demonstrating the uniqueness of the staffing service and their technical savvy.
Client Portal Functionality
While much of the functionality available in a Client Portal may be available through VMS, the differences are significant. The staffing service controls the application and provides information only about that particular staffing company a critical element of maintaining strong client relationships. The following features are available in most Client Portal offerings:
1. Registration and Updates Your clients have the ability to accept a user name and password sent to them from the staffing service or to register on their own. Once registered, the client can update any profile information they feel appropriate, such as email, physical, and mail addresses, hiring skills, and more.
2. Job Orders Clients have the ability to enter and review Job Orders via the Client Portal. Based on the client or the type of job order, the newly entered requisition is routed to an internal staff member so that they can follow up.
As the job order is being worked, the client can go into the system and view the status of the order: How many people have been considered, how many people have been presented, what are the statuses of those people, why candidates may be turning down the job, and more.
Clients can also see who is currently working for their company, the bill rate, the skill set and resume, expected end dates, and more.
3. Search for Talent Staffing companies have the ability to publish blinded resumes and skill sets of their available contingent employees or candidates. With a user ID and password, clients can examine this information to gain a better understanding of the types of candidates you have available. If they see a resume or skill set that looks promising for a particular position, they have the ability to request more information about that person.
4. View invoices Clients have the ability to view their invoices on line. From here they can see all transaction information associated with the invoice, if necessary. Current and historical invoices can be reviewed and printed. It may also be possible to fully automate the reporting process for clients so that they would automatically receive by email the staffing reports they need, in the form they require, on a schedule that they determine.
5. Integration with Staffing Software One of the benefits of a Client Portal system is its tight integration with your staffing software. To get the most from your Client Portal, it should use the same database that your staff uses for placement activities. This ensures that no information is lost and double data entry is eliminated. It also assists with internal routing of Activities associated with notifying your staff of new client registrants, new job order entries, any questions from clients or prospective clients, and more.
The added benefit of a Client Portal is that most vendors package this solution with a Candidate Portal, as well. The Candidate Portal allows new applicants to register and submit a resume. It also allows new applicants and existing employees to search for open job orders you have posted to your website. Employees can view their current assignment(s), with direction information, pay rate, report to person, and more. Lastly, they can enter their timesheets online, thus saving your staff the hassle of having to collect and re-key the hours.
Client Portal Focus
The focus of a Client Portal solution is the staffing service. The primary objective is to assist Staffing Firms in being more attentive to customer requests. It allows you to offer another means of interactive communication with your client, while not sacrificing the relationship. The Client Portal is a distinct advantage, not a tool to drive your business into a commodity market.
The Client Portal is also a tool that you, the staffing business, have control over. You determine who has access and who does not, what they can see, and how transactions and notifications are routed.
What's best for you?
Before making a decision to go with a Vendor Management Solution or a Client Portal Solution (or both), it is important to determine your specific business needs, as well as the needs of your clients. Further, you have to weigh the pros and cons of each in terms of how they will impact your business relationships.
The most apparent aspect of comparison from your own business perspective should be that a Client Portal has some significant advantages: It will differentiate you in the market and help in building stronger relationships with your customers. It enables you to offer a solution in which you manage and control the relationship. It prevents you from being compared to other staffing business by price alone.
Further, on some occasions your clients may indicate that they are looking for you to provide them a VMS solution. At this point it is important to assess the true business needs of that client. Because of the confusion in the market, your client may have been led to believe a VMS is the only way to obtain features that you can in fact deliver through a Client Portal. That gives you the opportunity to educate them on the benefits of a Client Portal:
- 24/7 access to information about their job orders and contingent labor
- The ability to save time and boost job description clarity by entering requisitions on the Internet
- View real-time updates on the fulfillment process without having to call into the Branch
- Search your pool of available candidates at their leisure, even for positions they have not yet revealed
- Configure agent searches to notify them of any new available candidates with a specific skill set
If, in the end, the client is in need of a true Vendor Management System, then it is at that point that your business must decide if that is the right course. It is a difficult decision that many staffing firms are facing: Do we keep the client and their business in exchange for commoditization and reduced margins?
While your decision about VMS must be made judiciously and thoughtfully, in every circumstance you can rest assured that a Client Portal offering will always enhance your business. Even if you are already using a VMS tool, consider a Client Portal for your non-VMS clients. The rewards you and your clients will reap are certain to improve your relationship and commitment.
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About VCG
VCG provides comprehensive staffing and recruiting solutions that power success. Since 1976, VCG has helped hundreds of companies worldwide achieve operational excellence by streamlining their unique business processes and accelerating finding and placing the people most likely to thrive. VCG and Pointwing are registered trademarks of VCG, LLC. For more information visit: www.vcgsoftware.com or call 1.800.318.4983.