Vendor Management Systems are by no means a new option for companies looking to manage their contingent labor hiring. While a VMS can be effective in certain areas, businesses that apply them to their highly skilled IT openings are increasingly unhappy with the results. Despite the hypothetical benefits, there are several reasons why organizations are moving away from using a VMS for tech staffing.
For upper management, saving time and money is a high priority that’s crucial to the health of a company. However, utilizing a VMS for cost savings often backfires. There is great appeal to streamlining the hiring and management of contingent labor, but the benefits are outweighed by red tape and unintended consequences.
When a VMS pits sources of talent, staffing firms, against each other, time-to-fill rates and bill rates take precedence over quality of talent. Firms may simply try to provide a body faster and cheaper than their competitors, and that can be disastrous in tech positions that have a lot riding on them. Likewise, a VMS can make budgeting seem easier by bringing consistency to salaries, but a static budget does not work well in IT, where salaries fluctuate depending on the niche and top talent comes at a premium. Simplifying contingent hiring is a good thing, but it doesn’t actually save money or time if the right talent isn’t placed in the right roles.
The quality of professionals who end up in open positions can suffer because a VMS sometimes feels like a numbers game. A certain number of workers are required to fill roles, and at a high level, that’s exactly what happens. When those roles are menial tasks and can be taught in a day, prioritizing speed in hiring above all else could work. Of course, this is far from the case in the tech field.
IT positions require specialized professional skill sets and must be screened appropriately for the role in question. After all, putting the wrong person in a cybersecurity position can prove devastating for the entire organization. Those who have tried using a VMS and had a poor experience found that it commoditizes their source of candidates and therefore the candidates themselves. The focus shifts from reviewing candidates’ skill sets and personalities to an assembly-line view of hiring where candidates are slotted into positions with insufficient consideration. There’s simply too much at stake in tech roles to take out the personal element and risk hurting the screening process.
The ability to foster relationships is critical to successful hiring, but a VMS often becomes an intermediary, preventing hiring managers from connecting directly with those recruiting their talent. For example, at Netflix the relationship between a hiring manager and recruiting team is the key to their outstanding hiring. The organization is successful in large part because they’re making effective hiring the priority and allowing that to lead their decisions, which means communication is paramount. After all, if a hiring manager can’t talk to the recruiter or account manager tasked with finding them the developer, programmer, or analyst they need, how can they properly fill open roles?
Going through intermediaries is like a game of grade school telephone where important details are lost in translation. Anyone can look at a bulleted list of role requirements and match them to a resume, but hiring is much more than that. It’s important to get a feel for the culture and intangibles and to understand the factors that aren’t on paper. What if a recruiter needs clarification on a specified requirement? 61% of hiring managers feel that recruiters don’t have a good understanding of the jobs they are recruiting for, and that’s because barriers are in place prohibiting those vital relationships from growing.
The relationship that contingent talent has with your company is equally important. If a VMS is ineffective and tech pros are placed in roles they aren’t right for, the candidate experience suffers. When a recruiter sets certain expectations that differ from what the talent actually sees when they arrive for the job, the talent’s immediate environment will feel the impact of their disappointment. That could mean low morale, decreased productivity, poor word of mouth, and negative reviews. While these outcomes may represent a worst-case scenario, the possible benefits of a VMS are not worth the risk of deteriorating these relationships.
Time and time again, IT departments are speaking up and telling management that a VMS is not meeting their needs the same way SOWs once did. Using new technology to improve processes is a good intention, but an area as sensitive as hiring requires a human touch that a VMS takes out of the equation. When a business is reliant on successful hires, partnering directly with a great staffing firm can deliver the hiring benefits a VMS promises in a more direct, efficient way.