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No VMS for 33%, but Denial May Dent Profits

December 19 2012

One third of staffing firms do no business through a vendor management system, according to the 2012 Staffing Company Survey by Staffing Industry Analysts. However, the survey also found firms that avoid VMS altogether are a bit less profitable than others.

“We looked for correlation between number of years continuously profitable and proportion of revenue flowing through VMS, but we didn’t find much,” said Theo Vadpey, who authored the report on the survey. “When we looked only at firms with less than 5 percent of their revenue flowing through VMS, we found that these firms were, on average, less profitable than firms with higher portions of revenue flowing through VMS.”

The median portion of revenue flowing through a VMS was 5 percent for all staffing firms, according to the survey.

However, revenue through a VMS varied by company size. Firms with less than $10 million in annual revenue reported a median 5 percent of revenue flowed through a VMS. Firms with $100 million or more in annual revenue reported a median 25 percent of their revenue flowed through a VMS.

The survey included responses from 622 individual staffing firms and took place in September. Corporate members of Staffing Industry Analysts can download the research “2012 Staffing Company Survey: Percent of staffing firm revenue flowing through VMS,” by clicking here. Corporate members can download “2012 Staffing Company Survey: What’s different about consistently profitable staffing firms?” by clicking here.

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