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Time to think about a Master Vendor approach?

Hiring the right talent is challenging in today’s highly competitive job market. According to the new Korn Ferry report, a global talent shortage of more than 85 million by 2030 could result in accruing about $8.5 trillion in unrealised annual revenues. 

This talent shortage has been a long time coming due to factors like low birth rates in most developed countries for decades, alongside the increasing need for more IT talent as more businesses transition to the cloud. It is quite probable that younger generations might not have the experience or training to take many high-skilled jobs soon.

Let’s take an IT company, for instance. Let’s call it Ajax Consulting and assume that it’s a global company that relies on the cloud for its daily operations. Ajax Consulting needs to hire highly skilled professionals like developers and engineers who can help launch new software products and maintain their cloud operations. The job market will only get more competitive in the future, and hiring top talent will become more challenging, with each skilled professional being spoilt for choice with different companies to choose from. Thus, Ajax Consulting will have to do their best to make its offers more lucrative by increasing salaries and adding multiple perks to attract qualified candidates. 

Over time, these costs will increase as hiring becomes more resource intensive. Also, Ajax Consulting will have to rely on procuring talent from multiple vendors, which can become tedious to manage for a company. How can Ajax Consulting then resolve their recruitment issues efficiently so it can focus on its core businesses instead? 

Enter a managed services program (MSP) for staffing. The company can leave the logistical parts of running the staffing and recruitment activities to a master vendor like Stack who will manage the multiple vendors providing services for the company. Easy, isn’t it? 

What is a managed service program?

A managed service program (MSP) can be a vital part of your company’s HR and recruitment processes, managing the business’s entire talent life cycle from requisition to invoicing and payment. 

Hiring temporary and contract workers can become tedious for your company. You may have to hire vendors to provide you with a steady supply of off-roll talent. There are 3 types of vendors.

Master vendor

A master vendor functions as a recruitment agency responsible for filling a company’s vacancies. Master vendors try filling these vacancies with their own curated candidates, releasing these vacancies to other competing agencies if they fail to do so on their own.

Neutral vendor

While not a recruitment agency, a neutral vendor seeks to form partnerships with various recruitment agencies in the market. When clients request them to fill their vacancies, neutral vendors contact their partner agencies to find the best-suited, cost-effective candidates for the role in question.

Blended model

In a blended recruitment model, an agency deploys a co-sourced model and becomes an extension of the client’s internal team, providing facilities like workforce planning and vendor management alongside tools and technology to help reduce a company’s time, cost, and quality of hire.

MSP staffing can thus be a viable strategy for managing your recruitment process. 

Alternatively, you might think of doing all this yourself just by using a vendor management system (VMS) inhouse and taking care of your worker recruitment and management needs. 

What is a vendor management system?

A vendor management system (VMS) is a cloud-based solution that helps businesses with the process of contingent worker procurement and management. A VMS can collect managerial requisitions, automate transactions, onboard new talent and provide valuable metrics and KPIs like tracking spends, candidate information, payroll, and invoicing.

Here are a few key features of a vendor management system:

Automate processes

VMS solutions can automate processes in the cloud, aiding sourcing, vetting assignment management, onboarding new talent and invoicing.

Enhance transparency

A VMS allows direct access to the entire organisation, granting visibility to track and manage all types of labour that are working for the company. 

Integrate supply partners

A VMS can enable companies to select vendors and track their performance with pre-defined KPIs. Organisations can also integrate supply partners and gain tighter control over supplier selection.

Ensure compliance

You can use a VMS to maintain all your information in one system to create reliable audit trails. A VMS can also help you with essential reminders while providing a solitary access point for all your business units to avoid inaccurate results.

Thus, VMS enables an organisation to manage independent talent directly or by outsourcing it to an MSP vendor. 


A company can opt for either an MSP or VMS depending on their needs. Here are a few key differences between an MSP and a VMS.

An MSP acts as an agency that connects your organisation to third-party suppliers.A VMS is a software system that’s often cloud based, which helps your organisation procure and manage workers.
Managed service provider staffing takes over the entire recruitment process leaving you only the final decision to hire. A VMS stores candidate information, payroll, and invoicing data to put you in control of the recruitment process.
MSPs are better suited to support large supply chains rather than dealing with individuals.As VMS is a software, you can easily use it to manage independent talent regardless of the quantity.
An MSP is run by people and supported by technology.A VMS is technology that’s used to maintain and manage talent.

MSP and VMS offer organisations two different ways to solve the same issue – finding talent. 

While VMS serves as the technology that can help a company manage its recruitment, most organisations deal with more extensive supply chains that can be better managed by an MSP. An MSP can in turn use VMS to micromanage an organisation’s hiring process. 

In a job market that’s getting more competitive by the day, delegating your recruitment to an MSP can help your organisation focus better on its core operations, and is usually a step-up compared to using a VMS inhouse.. 

Trust our team out here at Stack to help ease your recruitment concerns with our extensive MSP capabilities. Augment your staff, resolve your business challenges, and scale your capabilities in a jiffy with us. Connect with us today to know more.