Vendor Neutral … Or Not? The Question That Won’t Go Away

If you’ve been involved in the world of contingent work over the past decade, it’s been tough to miss the debate over vendor neutrality. The question is usually framed simply as: should a Vendor Management System (VMS)/Managed Service Provider (MSP) be “vendor neutral” or not?

Judging from the discussion at our latest Contingent Workforce Strategies council meeting, it appears that the debate is still open. During the meeting it became clear that even among the some of the world’s most sophisticated buyers of staffing services, there is no clear consensus on either the importance or the appropriate role for vendor neutrality in operating a contingent workforce program.

To me, one way to answer a question like this is to break it down into its components. First, there is a difference between neutrality for a VMS technology and neutrality for an MSP. It’s important to separate the two of them, as neutrality in technology is a different thing from neutrality in management of a contingent workforce program. For a VMS tool, neutrality usually means having a mechanism that distributes orders fairly to staffing providers and allows for an unbiased decision about which firm and candidate gets the assignment. For an MSP, neutrality is more often about ensuring that the process is managed fairly and that orders aren’t steered to an MSP’s own organization.

Of course there are many potential ways to define neutrality itself. Some of the more common ones I’ve heard over the years include neutrality in ownership, neutrality in management structure and incentives, neutrality in appearance, neutrality in operation and distribution of orders.

In my opinion it is critical to think clearly about the ultimate purpose of neutrality. Neutrality or any other managing philosophy should be a means to an end. For clients, that end usually means the best possible candidates at the lowest possible cost of ownership with the least risk and the easiest most efficient process. Is “neutrality” the best way to achieve that goal in all situations?

I suspect that the answer is no. This may explain why some organizations have gone to hybrid models with a vendor-neutral MSP for professional, skilled positions and a definitely non-neutral master supplier to fill admin/clerical and industrial positions. To me, vendor neutrality, particularly in terms of ownership, is much less important than some make it out to be. What should be of utmost importance is whether the program operates in a transparent manner, with orders distributed according to the preferences and priorities of the client.

Call it neutral or call it something else, but in the end the customer is indeed always right.

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