Want to get away? No, I’m not talking about a free trip to Hawaii. But for some suppliers what I’m about to suggest might be just as welcome..
I am talking about getting away from the VMS/MSP space: building a staffing firm that succeeds outside of it.
There are those who have done it and lived to tell the tale. But before you start down the path, here are some things to consider that can work for or against you depending on your staffing model.
Speed. The VMS is all about speed coupled with low cost. Unless you can really bring together a large group of recruiters to deliver tons of résumés quickly, you are at a disadvantage.
Consultative Approach. Companies that favor the high-touch, high-value method — providing industry information and being more consultative —do better in a non VMS/MSP environment.
Domain Expertise. Boutique staffing firms or those in a niche market with specific industry know-how can command high margins that will be lost in a VMS world.
Economies of Scale. Boutique firms not catering to the VMS/MSP tend to be smaller firms that specialize in one or two niches, often not competing with the national staffing agencies. Staffing firms that cater to a VMS/MSP tend to be lower-cost operations but with larger economies of scale.
Time Commitment. In a non-VMS space, many staffing firms spend oodles of time managing client and consultant expectations. This is part of the service offered that allows the firm to charge higher margins.
Veteran Recruiters. Non-VMS companies have recruiters with star power who match the client with the best candidate available. These professionals are paid highly, quite different from the VMS paradigm where an off-shore recruiting model is the one of choice and recruiters are paid less.
Direct Contact. In a VMS setting, many staffing firms cannot contact the hiring managers directly. This can be anathema to non-VMS firms that like to engage and want to have some influence in the sales process.
At the end of the day, one model is not better than another. It’s all about what your core competency is and how you can grow in the markets that you are in. There are opportunities in both the VMS/MSP and the non-commoditized space.
As far as buyers of staffing go, they can benefit from aligning themselves with either model. It really comes down to the job they are looking to fill. Esoteric or very specialized skill sets may be better serviced through a niche staffing firm that may operate in a non-VMS space. It could be worth your while or the MSP’s to pursue them and accommodate their needs.