Buyers of staffing services want to shave costs. And I am not talking about a specific buyer. I hear this all the time from both suppliers and buyers themselves. Lowering costs around contingent labor seems to be something that is a buyer mantra. So many conversations that we at Staffing Industry Analysts are privy to are around trimming prices. We get it. There has been a recession, companies are hurting and they don’t want to add to headcount. But that’s no reason to squeeze your suppliers and get more out of them. Suppliers react in different ways. There are those who blame the VMS for lowered margins. But really the VMS is just symptomatic of the buyers’ desire to drive costs down.
Here’s the catch. And maybe it’s a procurement thing. When you source pencils, shaving costs is something you can get away with. A pencil is a pencil. But when it comes to sourcing talent, it’s a different story. The downside of pruning prices when acquiring talent is that you will get what you pay for. A survey just released by Staffing Industry Analysts revealed that a third of staffing firms treat VMS orders differently. For some of these suppliers, it’s a lesser priority thanks to the very thin margins.
So the lesson is if you have positions you care about, don’t quibble on pricing. No one (including suppliers of staffing services) wants to be taken advantage of. On the other hand, you as a buyer want quality candidates. Do your homework to know what the appropriate rates are for your positions and area. And sit down with your MSP and suppliers to work out arrangements that give all parties something to be happy about.