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Can a Neutral Vendor Engage Your Supply Chain More Effectively?

19 October 2022

For organisations with a large temporary workforce, managing the process can often be costly, tiresome and above all, take hiring managers away from their core responsibilities.

Vendor Neutral Management offers a more rounded approach. A neutral vendor serves as a liaison between your company and suppliers who have gone through stringent pre-qualification and accreditation processes in order to be accepted into the Neutral Vendors Marketplace.

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The Neutral Vendor 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 has the power to introduce new, trusted suppliers and remove the old. This streamlined 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.

A Neutral Vendor is not a recruitment agency. They simply form partnerships with various recruitment agencies and when a client needs vacancies to be filled, the neutral vendor goes to market to their different partner agencies in order to find the most suitable and cost effective candidates to fill the requirement. There is no conflict of interest between the neutral vendor and the agency partner.

Some of the key benefits of neutral vendor management services are:

  • One point of contact for all vacancies
  • Standardised terms and conditions
  • Fair and clearly visible margins
  • Only one consolidated invoice per week or month
  • Manage the entire temporary recruitment process, including legislation and compliance
  • Full control of end clients’ brand through standardised recruitment processes
  • Real-time KPI (Key Performance Indicator) management information reporting via technology solutions
  • Wide range of trusted suppliers and candidates

So, how can a neutral vendor engage your supply chain more effectively?

Relationships with the agency suppliers are often built up over the course of many years. Neutral Vendors allow hiring managers to continue to liaise directly with the agency suppliers to discuss requirements and applicant suitability, this minimises any change to existing processes and protects relationships. Supplying agencies also hate to be cut off from their clients, and allowing communication channels to remain open minimises any risk of resistance to the new programme.

As there is minimal change, the time to implement is short and benefits are realised quickly. In addition, cost savings can be delivered from day-1 as there is no need to wait until a critical mass is reached by filling vacancies directly. Cost savings can be properly benchmarked against each site, cost centre or division and can be taken either as an immediate reduction in charges to benefit the individual hiring location, or can be accrued and rebated centrally.

A Neutral Vendor should have a number of automated, systematised compliance checks, however, also conduct physical audits on the agency suppliers to ensure all contractual requirements are being adhered to.

Neutral Vendors do not make money from placing candidates and therefore the cost for delivering their service is all contained within their management fee, therefore, on a like-for-like comparison, neutral vendor management fees can be more expensive than management fees of a master vendor. However, the savings delivered should far exceed any extra cost in management fee due to the effective implementation and engagement by hiring managers and agencies alike.

Incentivised to make and deliver cost savings, particularly in relation to reducing the demand for and the duration of assignments.

Part of demonstrating ongoing value for a Neutral Vendor is to show how they can drive down reliance on agency workers by challenging the use of agency workers, assignment extensions and length of assignment and driving cost savings in an innovative way, e.g. temp to perm incentive, contractor mobility incentives to move from job to job, tenure discount for long serving temporary workers, etc.

All of the aforementioned factors combine to make a neural vendor a good alternative for engaging with your supply chain more lately and reaping the benefits of doing so, such as selecting the best suppliers for you, saving money, having more transparency, and being legally compliant.

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