Over the last decade, there has been a noticeable decline in satisfaction for both vendor management systems and managed service program solutions as reflected in the responses to SIA research. The sustained decrease prompts an exploration into possible reasons behind this trend.

Via its annual Workforce Solutions Buyer Survey: 2024 Americas Results, SIA engages enterprise buyers to gauge the state of their programs. Among the wealth of data in these research reports, two questions have stood out consistently over the past decade specific to the level of satisfaction buyers have for both vendor management systems and managed service providers:

1. “Would you recommend your VMS to a friend or colleague?”
2. “Would you recommend your MSP to a friend or colleague?”

The responses to these questions yield the services’ Net Promotor Scores. There has been a significant decline over the past decade, although the most recent survey shows a potential reversal of the trend, as the accompanying chart reflects. The current responses aside, satisfaction is still far below their 2013 levels.

Behind the Decline

There are several factors behind the 10-year decline in satisfaction levels.

Lack of innovation. Both VMS and MSP industries have seen a perceived stagnation in technological and operational advancements. The absence of significant innovations may contribute to a sense of dissatisfaction among users who expect continual improvement and efficiency gains.

Strategic implementation challenges. Enterprise buyers often struggle to translate strategic and innovative ideas into their programs effectively. This gap between conceptual innovation and practical implementation can influence user perceptions when evaluating and recommending these services.

Perceived declining value. The funding models for VMSs and MSPs have virtually been the same for at least the past two decades — especially within the staff augmentation sector. For example, programs that retained the same VMS and MSP for up to five years are more than likely still paying the same percentage-of-spend fee they were at the inception of VMS and MSP. If there has been no innovation or the opportunity to have continuous improvement based on the performance and capability of the VMS and MSP, then this can also contribute to the weak and down-trending NPS scores for both.

The Market Responds

Through recent strategic conversations with enterprise buyers as well as SIA research, we have seen the market begin to respond to these factors, which may have contributed to the increase in the providers’ NPS scores in our 2024 survey.

For example, we have seen a notable shift in both technologies and operational support expectations and needs. In our annual VMS Global Landscape & Differentiators 2023 report, SIA delves into providers’ technology offerings. Our most recent report indicates VMS providers are enhancing their products by introducing or refining features like integrated talent pools, AI-driven résumé ranking and enhanced integration capabilities, among others.

Meanwhile, MSPs are actively enhancing their value propositions. Some now provide direct sourcing capabilities, while others are investing significantly in supporting statement-of-work operations. Additionally, many are offering hybrid support models that include essential administrative functions crucial for managing contingent labor programs.

The overall trend of declining satisfaction in VMS and MSP recommendations underscores the critical need for ongoing innovation and strategic alignment within these sectors. The market appears to be responding. Continuing to address these challenges could enhance the overall effectiveness and value of VMS and MSP solutions in enterprise environments, which we expect to be reflected in improving NPS scores.