There are many options available when it comes to acquiring and managing contingent workers whether that’s individual limited company contractors (inside or outside IR35), outsourced project teams or temporary PAYE staff. We’re going to take you through some of the common options:
1. RPO (recruitment process outsourcing)
More usually associated with permanent recruitment but also used for contingent staff. An RPO will charge a discounted margin for providing the staff or just charge a management fee on top of margins for supply by agencies or for staff under their management found by the hirer.
2. MV (master vendor)
Holds the contract for all supply via themselves and are typically large recruitment agencies. They provide contingent workers and manage the ongoing process from onboarding through payroll / payment management to off-boarding. MV’s will typically deploy staff retained on their database before subcontracting to third party providers where they have a shortfall.
3. NV (neutral vendor)
As the name implies, they are neutral so do not have a database of their own candidates. NV’s manage the deployment of workers supplied by recruitment agencies.
4. MSP (managed service provider)
An alternative title for all of the above, either delivering their own services or managing supply and processes provided by third parties.
5. PSL (preferred supplier list)
Administered and operated by an MSP or yourself. PSL’s are often used by small to medium sized organisations until the administration overhead becomes such that a more efficient and specialist service can be provided by one of the above.
comparing the options
Each of these approaches brings real benefit and they are all well-established methods. There are however pros and cons with them all, which we’ve displayed below. The purpose of this paper is to take a step back and consider the perfect solution and then cherry pick the best bits of the different services to see if better outcome can be achieved.
the perfect solution
Taking a step back, the following represent the desirable outcomes that organisations seek.
1. control over your recruiting process, the number of workers and their associated costs together with supply chain risk management
2. access to the widest available talent pool in a speedy and efficient manner
3. full transparency and control with risk mitigation with everyone in the supply chain accounted for
4. streamlined administration and MI to facilitate pro-active planning
5. supplying agencies who derive value from the relationship and therefore perform better
6. scope for a step change in cost saving. Every worker has attracted a margin historically but if this could be avoided whilst ensuring thequality of supply then significant savings will be made
The giant solution provides all the traditional benefits of the various approaches with added flexibility, more services in one place than any other, risk management and pro-active workforce management planning.
With the infrastructure and expertise to support you there is an opportunity to go at your own pace and make a step change in cost savings by removing unnecessary cost. This is achieved by using the support you need to build and maintain a full and active talent pool. This is on top of the savings that you will deliver simply by addressing your current approach.