Master Vendor vs. Neutral Vendor: What Is Right for My Care Homes?

Choosing the best way to manage agency labour is a crucial decision for any care home operators. The right approach can improve quality, save money, and reduce administrative headaches. Two of the most common models are the master vendor and the neutral vendor. Understanding their differences will help you decide which is best suited to your care home’s needs.

What Is a Master Vendor?

A master vendor is typically a single recruitment agency that takes responsibility for filling the majority of your vacant shifts, usually aiming to cover at least 70% of your requirements using their own workers. Any remaining shifts are subcontracted to other agencies, but you only ever deal directly with the master vendor. This model offers a single point of contact, one contract, and consolidated invoicing, making administration straightforward.

Advantages:

• One point of contact for all labour needs
  
  
• Simplified invoicing and contract management
  
  
• Potentially quicker response for urgent cover
  
  

Disadvantages:

• May disrupt existing relationships with specialist agencies
  
  
• Limited access to the wider talent pool, as some agencies are reluctant to subcontract
  
  
• If the master vendor cannot fill all shifts, you may need to go off-contract
  
  
• Auditing subcontracted agencies can be challenging
  
  
• Restrictions on applying the HMRC VAT nursing concession for subcontracted roles, which can affect cost savings
  

What Is a Neutral Vendor?

A neutral vendor is an independent provider that manages your agency labour through a panel of approved agencies. They do not supply staff directly but act as an impartial intermediary, distributing your shifts to multiple agencies based on your preferences and rules. You benefit from a single point of contact and consolidated invoicing, but with access to a much wider network of agencies.

Advantages:

• Single point of contact and invoicing, but access to a broad range of agencies
  
  
• Full impartiality in agency selection, ensuring the best value and quality
  
  
• No risk of vendor lock-in; you can change agencies as needed
  
  
• Ability to drive competition between agencies, keeping rates competitive
  
  
• Easier to apply the HMRC VAT nursing concession across all agency-supplied roles, which can lead to significant cost savings
  
  
• Stronger compliance and unbiased auditing, as the neutral vendor is not incentivised to favour any particular agency
  

Disadvantages:

• Management fees may be slightly higher, but these are typically offset by the savings and efficiencies gained

Which Is Right for Your Care Home?

Both models simplify administration and can improve quality and efficiency. However, for most care homes-especially those providing nursing care-the neutral vendor model often delivers greater flexibility, access to talent, and cost savings, particularly due to the ability to apply the VAT concession more widely. If your home is purely residential and does not benefit from the VAT concession, your decision may come down to other factors such as existing agency relationships or specific service needs.

How Datum RPO Can Help

Datum RPO specialises in neutral vendor solutions tailored for the care sector. We provide impartial management of your agency supply chain, ensuring you have access to the best talent at competitive rates, with full compliance and transparent reporting. Our team handles all the administrative burden, freeing your managers to focus on delivering outstanding care. By partnering with Datum RPO, your care home can achieve better agency labour outcomes, improved cost control, and confidence in compliance.

Get in touch with Datum RPO to find out how we can help you choose and implement the right vendor management approach for your care home.