There Has To Be A Better Way To Do VMS!

Tim Sackett Don't Feed the Vendors, Driving Productivity, Good HR, HR, Tim Sackett

Okay, I run a staffing contract IT and engineering staffing firm. Part of our business is making placements with clients who use a VMS (vendor managed service). It’s a highly growing field, for a number of very legitimate reasons.  A VMS is basically a middle man in between the staffing companies that support your company and you.

The theoretical concept about using a VMS is solid! You don’t need a hundred staffing firms trying to contact your hiring managers. You don’t need, or want, to manage all those firms (even if you only use a handful). You don’t want your hiring managers making under the table deals to only work with one firm. You want to have competition amongst your vendors to get the best price and the best talent as fast as possible.

Wow! That sounds wonderful! Where do I sign up?!

“Theoretical.” In theory VMS is an awesome option. In reality, it’s less than ideal for a few reasons:

1. FIFO.  Remember your ECON class in college? First in – First out (FIFO). That is basically what happens in every VMS. The reality is, your hiring managers won’t wait around for the best talent in a VMS system. They go for the first candidates they see, they interview, and they hire the best that’s available in those first submittals.  That’s a big problem!

2. VMS vendors trying to show you that they save you money.  The new trend in VMS is to pinch the staffing vendors the longer the contractor is on. Once that contractor is on for a year, well, now we are going to reduce your rate! So, I get penalized for retaining a great contingent worker in your environment?!  That sounds like a great business strategy…

3. VMS programs rarely allow hiring manager contact. This is a huge problem! Can you imagine making a great hire on the corporate side of Talent Acquisition if you never got to speak to the actual hiring manager? No, of course you can’t! It would be next to impossible. The job description is limited at best—the hiring manager keeps information about who and what they’re looking for. So, VMS systems basically just want to have you guess at what the manager is really looking for.

I think there has to be a better way to leverage the great business theoretical ideals of VMS and the reality of actually hiring talent for your organization.

Here are some changes I would institute if I was running a VMS on the corporate side of the fence:

I would put a waiting period of five business days before hiring managers could look at the submitted candidates, and I would use some sort of assessment/selection technology to rate the candidates. That way at day five the hiring manager isn’t just looking at the first submittals, but looking at the best submitted. Right now staffing companies have learned to just throw junk into the system fast, and you’ll make placements. This is hurting the quality of your contingent workforce.

I would require each hiring manager to have a thirty-minute phone conference call with our staffing vendors so they could ask what the manager is really looking for, prior to approving the requisition.

Because of the prior point, I would also limit the vendors. I see companies using 100+ vendors for their VMS, and it’s a joke! Using more doesn’t give you better quality or talent faster, it makes your best vendors focus their resources on clients that actually interact with them and show them they have some value to your operation.

I would run my VMS in-house! The technology is easily available, and your totally modern workforce is going to continue to have a higher percentage of contingent workers. I want more control of this and be more hands on with it. This part of my workforce is too important to shop out, and I believe I can do it better internally.  Gone are the days of vendors scaring me with “co-employment” language. Thanks, I got it.

I’m involved with various VMS systems every single day, and I think they have real merit to my corporate TA brothers and sisters… but you need to design them to work for you!