2012 has been a great year for us at Creative Solutions Services. Our recruiters have done a great job at finding the best talent for our clients. It’s not always easy, but the science/art of recruiting is capable of bringing great satisfaction not only to us as a staffing firm but also to our candidates who are matched to a great job opportunity, as well as to our clients who benefit from the talent of new employees.
The following is an overview on some of the lessons learned during 2012:
Over 70% of our revenue comes from Clients who have outsourced the management of their contingent staffing programs to a Managed Service Provider or Vendor Management System, Creative Solutions Services, appreciates and embraces the value an MSP brings to the table. We have worked hard to align our recruitment model with the MSP / VMS environment and have built a metric-based approach that complements MSPs and results in better performance for our Clients.
Over the past several years there has been a shift in corporate America to utilize contingent workforce not only as a method to handle needs during peaks and troughs of demand, but rather as a method to manage their day to day operational needs. Contingent labor has been trending to comprise up to 30% of the total workforce a corporation has these days and needs to be managed effectively just as all their human capital is. Because contingent labor is now becoming a strategic resource for corporate execution, they must start managing, investing and planning around this workforce to retain long term value from their labor force. Below are some suggestions on what to consider:
Vendor Management System (VMS): A VMS is an internet based software application (SAS 70 Type II compliant) which enables organizations to manage their contingent workforce across the enterprise. Each organization has their own contingent workforce rules such as job classification, rate cards, vendor classification, vendor performance, vendor rate cards, vendor score cards, candidate submissions, on- and off-boarding, time and expense keeping, vouchering, consolidated billing and reporting, amongst others. Companies typically either run their own program or outsource the day to day management of their contingent labor needs to a manage service provider.
Managed Service Provider (MSP): A managed service provider is a company that manages an organization’s contingent labor program. An MSP can be a staffing firm or can be an independent entity. Larger MSP programs are usually run by an independent organization to avoid conflicts of interest in the organizations staffing needs. MSP responsibilities include overall program management, supplier management, customer management, order distribution, candidate filtering, reporting and tracking, and consolidated billing across program suppliers. The use of these programs helps organizations reduce their overall cost of supporting their contingent program, reduce costs by standardizing rate cards, simplify billing cycles, and avoid conflicts of interests between the organization and staffing providers.
Vendor-Neutral Program: A vendor neutral program is a program that can either be run via an MSP program or VMS program. The rules are setup to work with selected staffing suppliers who are given equal opportunity to fill all roles across the organization but cannot interact directly with hiring managers. It levels the playing field for all suppliers and makes them focus on delivery rather than sales. Staffing firms gain the advantage of getting access to all opportunities and save costs on their sales / account management organization. The idea of a vendor-neutral model is that the best supplier with the best candidate will fill each position.
Master Supplier Program: A master supplier program is when a staffing firm takes responsibility for providing a client with temporary and contract staffing services. In this program, all orders will generally go to the master supplier first and then distributed to the secondary tier of suppliers. The master supplier has shown they can handle the volume or has a history with the customer and therefore has been engaged as a trusted partner so they get the first opportunity to fill the requirements. If they do not fill the needs then the orders are distributed to the second tier vendors. Many times this type of program may be aligned by a specific skill set (i.e. light industrial, clinical or admin / clerical) rather than across all skills sets.
Creative Solutions Services, has been a leading provider of staffing services to MSP and VMS programs nationwide. For more information regarding these programs or if you are looking to add a tier 1 supplier with an excellent track record, please contact us at 646-495-1558 or send us and email
The 20-factor test is used as an aid by the IRS to determine whether an employment relationship exists between the individual and the firm under common law rules, for federal employment tax purposes. The factors are applied to the given factual situations to determine whether the individual is an employee of the firm for such purposes.
These factors have been developed based on an examination of cases and rulings considering whether an individual is an employee. As Edward E. Lenz highlights in his book Co-Employment, “the degree of importance of each factor varies depending on the occupation and the factual context in which the services are performed.”
“In today’s workplace, traditional employment relationships are changing. Flexibility is the watchword, for both employers and workers. Companies are establishing smaller “core” workforces and supplementing them with part-time and temporary workers in a variety of alternative employment arrangements. Some businesses are outsourcing employer responsibilities under ‘professional employer’ arrangements that often are confused with staffing services.”
Edward A. Lenz, Co-Employment
By Alexandra Zatarain
Co-employment relationships are established between two or more business, where each has actual or potential legal obligations and rights as an employer in respect to the same employee. Obligations can include providing wages, benefits, paying and withholding taxes, insurance, and more.
When the facts and circumstances align, the law imposes obligations on the employer towards the employee. Because of the nature of the staffing firm’s work, both the firm and the end client will have enough contact with the employee so that both will be viewed by the law as employer.
There are risks coming in from everywhere, surrounding contingent employment and subjecting all the parties to high-stakes liabilities.
But there are a number of best practices that can minimize these risks and, if carried out diligently, even avoid them.
These best practices are directly related with different elements of the contingent employment relationship, from recruiting to background checks. All of these elements have to be carefully monitored to make sure both the client company and the agency are acting according to standards.
(With information from the Contingent Workforce Risk Management Toolkit of the Department of Human Resources Management of the Commonwealth of Virginia)
An important risk involved with a contingent workforce is co-employment.
Co-employment occurs when a contingent worker is considered an agency employee for the purposes of employment law and/or taxation. It is the employment relationship in which a contingent worker is viewed as working as a common law employee for an agency as well as an employee of the contractor.
Giehll and Moss estimate that the US human capital supplier industry generates over one trillion dollars in revenues with some of the biggest suppliers appearing in the Fortune 500 list.
Suppliers can come in different shapes and sizes, and in the end it all boils down to their capacity to fulfill the client company’s human capital needs.
The service rendered by the supplier will depend on the hiring company’s requirements. Organizations have different options to choose from when working with suppliers.
According to the American Staffing Association’s website, more than 90% of companies in the US use staffing firms, and 40% of employees looking for their first job or who are reentering the job market have done so by working with a staffing company.
Unfortunately there is a large pool of candidates that doesn’t take advantage of the services a staffing firm offers. According to CareerBuilder.com forty percent of job candidates are unable to name a single staffing firm from memory and only 20 percent have used a staffing firm in their most recent job search.