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Featured Post: The VMS Bogeyman

January 08 2013

Although staffing firms may take a dim view of VMS, there isn’t a strong relationship between percent of revenue that comes from a VMS and staffing firm’s profitability, writes Subadhra Sriram, editorial director of Staffing Industry Analysts, in a new blog post. Read the blog here.


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The BOSS Group

Conor Smith01/08/2013 04:06 pm

First, I want to clearly state that I do not hate VMS systems or view them as the "bogeyman". My firm has several successful partnerships with VMS clients and we look forward to growing this business with quality partners. Like anything in life, there are good ones and bad ones out there. However, I take issue with this posting in that it doesn't discuss the true issues, which are quality and service (or lack thereof)- ultimately what should be the real measure of success for a VMS system or MSP program. Our industry should be ultimately judged by the quality of talent we place at our clients, and are we providing good talent at a fair price with good service. Unfortunately, the last time I checked the Net Promoter score for MSP and VMS organizations is not good and is a poor representation of the value this industry provides.

Sure, any firm can build a plan to make more money through VMS systems by "playing the game" and focusing on speed rather than quality, cutting costs by hiring more junior recruiters or off-shoring recruiters to work on VMS orders with lower profit margins, while dedicating more senior recruiters to hire better talent for non-VMS clients. But ultimately what the Net Promoter figures are telling us is that both clients and staffing firms that work through VMS systems aren't promoters of this model in a way that we should be proud of and lives up to our industry's value proposition. VMS systems overall seem to be driving more revenue and profits for some firms, but potentially at the cost of quality and service. Again, blanket statement, and I fully acknowledge there are very good VMS programs in place.

Sure there is more revenue to be had out there through VMS systems. However, is that the "merit" of the tool. What we should all be looking at first and foremost, especially Staffing Industry Analysts, is our reputation for quality and our service levels to our clients. That is the real "bogeyman". For this posting to simply state that suppliers should get on board and the pro's far outweigh the few "glitches" that exist is oversimplification and just flat out not accurate. Quality talent and service are the cornerstones of this industry and just because there may be more revenue to be made through some VMS programs doesn't mean it is a good thing or representative of the quality standards we hope to achieve. If we are driving revenue for agencies and cutting costs at clients, but the data doesn't show acceptable satisfaction on either end, is it really a success?

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