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What is Vendor Neutral Management?

12 May 2016

When it comes to recruitment, Preferred Supplier Lists (PSLs) and Master Vendor Agreements have been the favoured solutions for years. But there’s a new kid on the block that is transforming the recruitment process: Vendor Neutral Management or Vendor Neutral Recruitment as it is also known.

So, what’s all the fuss about? Well, despite PSLs and Master Vendor Agreements appearing successful on the surface, once you dig a little deeper you’ll find that they actually rarely work out as planned…

First up, Preferred Supplier Lists, whereby companies have a list of agencies they turn to in order to manage their recruitment needs. One of the main benefits of PSLs is the variety of choice – but they can quickly become complicated, spiraling out of control so they end up being a full time job to manage.

How does this happen? Well, every new hiring manager that joins your business will more than likely have their own preferred supplier who they bring across with them – and before you know it, your easy-to-manage PSL of five chosen agencies will have suddenly become an impossible-to-control list of over 50 agencies, making it increasingly difficult to keep on top of the admin and stay in control.

The other popular choice is a Master Vendor Agreement, where one supplier manages all your vacancies in return for having the first opportunity to fill them, only passing roles on to the second tier of suppliers if the roles can’t be filled. The obvious negative of this method is a lack of supply choice – and in addition, when roles are passed on, secondary agencies will already be aware that they will be difficult to fill.

The result? Because the roles are tricky and your second tier supplier wasn’t the first choice to fill them, they might not have their heart in finding you the best candidates. Despite these problems, Master Vendor Agreements remain popular because of the ease of having just one point of contact, preferential rates and one consolidated invoice.

Vendor Neutral Management

But what if you could have your cake and eat it, enjoying a variety of suppliers with the simplicity of just one contact? Well, that’s where Vendor Neutral Management comes in. Vendor Neutral Recruitment offers the best of both worlds: all jobs are released to all supplier agencies at the same time through the managed services online, but with just one point of contact and without time-consuming admin.

And because there’s no affiliation with any one supplier, Vendor Neutral Management levels the playing field, encouraging competitive standards so that everyone works to the best of their ability. Not only that, but each agency’s performance will be continually measured against a Service Level Agreement so new suppliers can be introduced as performance levels rise and fall. 

The benefits alone speak for themselves:

  • One point of contact for all vacancies
  • Standardised terms and conditions
  • Fair and clearly visible margins
  • One consolidated invoice each week or month
  • Manage legislation and compliance on your behalf
  • Full control of your brand through standardised recruitment process
  • Real-time KPI management information reporting

Vendor Neutral Management is perfect for organisations with a large temporary or flexible workforce, providing the opportunity to benefit from a broad supply chain without the usual challenges – and you can also rest safe in the knowledge that your suppliers are being continuously audited for performance, compliance, fulfillment ratios, pricing and candidate quality.

So, what are you waiting for? It’s time to say goodbye to big complicated supply chains and hello to clear margins, cost savings, increased consistency, reduced administration and complete control. Contact Datum RPO today to find out more…

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