For companies with a large temporary workforce, managing the process can often be costly, tiresome and above all, steer hiring managers away from their core responsibilities.
If you are looking to manage temporary and contract agency labour, in essence, there are three main RPO solutions: Preferred Supplier Lists (PSLs), Master Vendor Agreements and Vendor Neutral Management.
PSL's and Master Vendor Agreements have been used widely across many industries, they are recognised as traditional methods. Vendor Neutral Management, a relatively new entrant into the market, offers an alternative approach of combining the best bits of both PSL's and Master Vendor Agreements, creating a solution that is both innovative and sustainable.
Here is a summary of all three options;
1. Preferred Supplier Lists
PSL’s improve the relationships between client and agency, whilst also reducing the administrative burden of dealing with a high number of suppliers. A PSL consists of a set-in-stone list of agencies that operate on preferential terms in return for being the first point of call for filling vacancies.
PSL’s are a great option for smaller users of agency labour who are trying to gain some control. Unfortunately, there are some down sides. Usually the list will start off with a handful of agencies, but naturally, as more hiring managers join the company, they tend to bring their preferred agencies with them. Therefore, A PSL that once contained a select few of trusted suppliers can gradually evolve into an unmanageable selection of agencies with limited communication and quality of hire.
2. Master Vendor Model
When outsourcing temporary agency labour, the Master Vendor Model is frequently used to source candidates required for high-volume vacancies of a similar description. In this sole-source model, the Master Vendor fills all the orders, only subcontracting the orders they cannot fill using their own network of preapproved suppliers. Due to the nature of the model, there is often limited visibility in sub-contracting relationships which may ultimately increase cost/margins unless the Master Vendor can fill a good percentage of the vacancies themselves.
3. Vendor Neutral Recruitment
The most recently established concept, the Vendor Neutral Model, offers the best of both PSL's and Master Vendor Agreements. The provider takes on the end clients’ existing suppliers, allowing for continued relationships between hiring managers and agencies. All suppliers are monitored and measured against a Service Level Agreement to maintain quality and delivery, and if an agency shows signs of slowing or inadequate service, the provider can introduce new, trusted suppliers and remove the old. This more flexible approach offers complete transparency of the supply chain, margins and costs, ensures consistency, control and efficiency, reduces administration burdens and ultimately, ensures savings to your bottom line.
Ultimately the Neutral Vendor model is not for everyone, if you have a low level of spend, or do not have multiple suppliers across multiple locations, you might be better off with a PSL or Master Vendor.
The bottom line
By partnering with a technology driven RPO company, organisations have real time visibility and control which provide the foundation for effective management of a contingent workforce. Recruitment Process Outsourcing has emerged as a major new business service that helps organisations increase earnings per share, protect operating profit and free up more money to reinvest in the company, its technologies and growth. New technologies and RPO services now make spend and agency management simple across an entire organisation — not just a single cost centre.