Managed Service Providers and Vendor Management and Freelance Management Software, often referred to as MSPs, VMS, and FMS, are in the spotlight. Increasingly larger hiring contracts are being outsourced through hiring programs, typically selecting an MSP that works with either an in-house or third-party VMS, FMS, or the client's own software. But do these solutions always meet the needs of organizations to manage external hiring effectively and efficiently, and reduce fiscal and legal risks? The trend of 'direct sourcing' offers an interesting complement to this. Niels van Berkel from Planet Interim shares his vision in this column, supplemented with an infographic, on how 'direct sourcing' can be applied, even by MSPs and within VMS and FMS software.

Selecting an MSP requires considerable time and capacity. Additionally, implementing and activating a hiring program together with the MSP requires a substantial investment in time and resources. The selected MSP must select, contract, and activate 'Tier 1 and 2 suppliers', and possibly also select and integrate a VMS or FMS. Finally, the hiring organization must collaborate with the MSP to implement the necessary process and organizational changes by involving stakeholders and ensuring their participation. As a result, a significant amount of time and budget may be spent before the hiring program can actually start.

After selecting an MSP, the actual recruiting, onboarding, and offboarding of externals begins. This is at a time when organizations more than ever want to build a relationship with (former) temporary colleagues and strive for more transparency and shorter supply chains. Adding extra layers, such as an MSP and various suppliers below, makes this an even greater challenge.

Direct sourcing is gaining importance because it offers a more direct and transparent approach. However, many MSPs almost always use a supplier, such as an employment or recruitment agency, resulting in a fee of 15 to 20% being paid for each hire, in addition to the MSP costs. This can lead to higher hiring costs.

"The 'supplier funded model' contradicts the trend of direct sourcing"

The 'supplier funded model' can increase hiring costs as it tends to involve more suppliers. Direct sourcing tools, such as Planet Interim, offer an efficient solution without intermediaries, with minimal implementation and often without additional fees. This can lead to a saving on hiring costs of 10 to 15% on average, besides the time and energy saved.

MSPs can play a valuable advisory role and provide good tools, such as business intelligence. It would be even better if MSPs moved away from the 'supplier funded model' and adopted a different payment method, such as a fixed fee for services provided, enhancing transparency. This can be combined with rewards for achieving goals, such as cost savings on hiring and client satisfaction.

"More transparency, shorter supply chains, and direct sourcing"

Fortunately, there are progressive hiring organizations and MSPs that embrace this vision and are working towards greater transparency and shorter supply chains by incorporating direct sourcing tools into their FMS or VMS. Planet Interim seeks to collaborate with these parties.

For these progressive hiring organizations and MSPs, I have outlined my vision for the optimal setup of professional hiring in the infographic below. This approach is particularly useful for client-focused parties who are open to a new, more effective, transparent, and cost-efficient way of hiring highly educated professionals.

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