MSP and VMS ModelTempWorks Software Director of National Sales, Claudette Dunlap, provides insight into the rising trend of the Managed Service Provider (MSP) and Vendor Management System (VMS) and best practices for staffing agencies.

In my role as Director of National Sales at TempWorks Software, I help staffing firms increase efficiency, streamline operations, and drive revenue through technology and process improvement. As a former manager for two leading national staffing companies prior to joining the TempWorks team, I have a unique perspective regarding the MSP/VMS model from both a staffing agency perspective and a staffing technology standpoint. Here are my responses and recommendations for best practices to some common questions I hear regarding the MSP/VMS model.

Question: What are the current staffing industry trends that have contributed to the growing popularity for the MSP/VMS model?

First, it’s no secret that there is a war on talent. Good candidates are hard to find. With a staffing agency choosing to go the MSP route, they receive the huge benefit of getting candidates from several staffing agencies, without having to sift through duplicates or just relying on one agency for the best candidate.

The other reason for the MSP model’s growing popularity is streamlined operations for clients. Clients don’t want to review the same candidate three times submitted by three different staffing agencies. With an MSP model, clients get the best of all worlds. Their orders are distributed to multiple agencies, but they only need to interact with one. They also don’t have to try to remember which agency sent them which candidate. More efficiency leads to lower costs for clients, which is why this model has become more popular over the last few years.

Question: What are the benefits of using this type of model for the MSP and vendors?

For the MSP, it offers the significant benefits of relationship building with the client, being the primary point of contact for the client, and providing a streamlined way to meet the client’s needs with the best candidates. Plus, the MSP has a head start on recruiting candidates for the job order before they pass it along to their vendors. For vendors, the main benefit is the opportunity to place candidates on a job order without the extra overhead costs from sales or client relationship management efforts.

Question: What are the main challenges of the MSP/VMS model?

There are drawbacks to every model. Financial benefit can be challenging for staffing agencies that adopt the MSP model. MSPs may only receive a small amount for managing the relationship if the candidate(s) that the client selects are from another firm or agency.

Another primary challenge for MSPs often originates from the inefficiency and convoluted processes of using multiple platforms and means of communication. The use of multiple platforms results in a significant amount of manual work and double data entry. This often leads to duplicate candidate submissions and missed candidates.

Question: What advice would you give to staffing agencies looking to become an MSP or for staffing agencies that are looking to improve their MSP capabilities?

Hands down, my top advice is not to use third party or additional tools. I recommend using something that is fully integrated or part of your full applicant tracking system (ATS). Adding another tool to the mix generally ends up creating more work and you often start to lose efficiency and capabilities, such as reporting. In addition, I recommend having this tool in place to use as part of your pitch to a client. It’s crucial to demonstrate to the client that you are leveraging technology that is seamless, automated and will ensure that you are prepared to meet their needs.

Final Thoughts

Efficiency is imperative, especially within the staffing industry. With the MSP/VMS model, this can help to streamline the process from both the client’s perspective as well as the MSP and its vendors. The MSP/VMS model is likely to continue to gain in popularity and staffing agencies should evaluate how their business model plays into this rising trend in the staffing industry.

If your staffing agency is looking to become an MSP or to make your current MSP/VMS process more efficient, check out TempWorks WebCenter and its Client and Vendor web portals. The functionality to support the MSP/VMS model is already incorporated into the system and, better yet, the web portals are directly integrated in the ATS and CRM for seamless data flow. There are no imports or exports and no need to manually update information. From receiving a job order and submitting it to vendors, to reviewing vendor candidates and sending them to the client, to time keeping and reporting, the MPS/VMS model is completely streamlined. This leads to cost-savings and faster fill times for all parties involved.

Contact us to learn more about how TempWorks Software can support your staffing agency’s business model!


Claudette has served the temporary staffing and recruiting industry for 32 years, spending nearly a decade as a manager for two leading national staffing companies. She joined TempWorks Software in 2012 after guiding hundreds of staffing companies through successful software implementations at several staffing software firms. In her spare time, Claudette is an accomplished orchestral pianist.


Sales Experience | CRM
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