There are a lot of options for companies to recruit, pay and engage with workers.
Outsourcing uses an outside business services vendor (and its supervised personnel), either on the customer’s premises or off-site at the vendor’s location, to perform a function or run a department that was previously staffed and supervised by the customer directly. Even though most companies want to improve and optimize outsourcing (to a third party who finds your workers and pays them) contingent labor practices, some are not sure where to begin. Some are frustrated with the monolithic, one-size-fits-all Managed Service Programs (MSP) and Vendor Management Systems (VMS) models that aren’t getting them the results they desire.
Today, these services can be purchased together or separately from a third party. Companies are opting to unbundle their contingent labor programs to become “Self-Managed Programs,” where the overall contingent worker program is broken down into smaller parts managed internally by the clients’ employees, as opposed to outside vendors.
Talent Acquisition model complexity
The Talent Acquisition model is more complex than ever. The talent war is real and it’s on!
Self-managed programs offer the client direct control and the flexibility they desire and can be accomplished by managing their contingent labor program in-house. By going the “in-house” route and using a “vendor-neutral model” in which a managed services or VMS technology handles its tasks (e.g. order distribution or candidate selection) based on client-defined policies that mandate that all (or a pre-defined set of) staffing suppliers (vendors) be (a) given an equal opportunity to fill each order, and/or (b) selected for each order based on the same criteria.
Under a vendor-neutral model, a managed services or VMS provider could not, on its own accord, push orders to itself or any other staffing vendor. The presumed advantage of a vendor-neutral model is that the best supplier with the best candidate will fill each position. The term is sometimes used in a stricter form to refer to an independent managed service provider that is completely autonomous, or semi-autonomous, from the staffing suppliers.
Vendor neutrality is key
Vendor neutrality is an important aspect of taking the self-managed route. ClearPath does not do any staffing, so suppliers enjoy working with us rather than worry we’ll take their candidates. ClearPath offers our clients the support they need to self-manage their contingent labor program by providing them with Employer of Record (EOR) and Agent of Record (AOR) services, complete with full worker onboarding and offboarding capabilities.
As a strategy, ClearPath recommends that companies design their self-managed program and integrate it into the overall talent acquisition strategy. The self-managed concept is not new and can be a good option for some organizations to implement for their contingent labor approach rather than the MSP/VMS model. It can include managing other staffing vendors in-house instead of outsourcing that element, as well as the direct identification (also known as “self-sourcing”) selection and procurement of contingent labor resources not associated with a staffing agency or other recruiting/sourcing intermediary.
Rob Geist, Director of Sales and Channel Relations at SimpleVMS, a web-based VMS, says,
“Often times I hear that companies think that MSP and VMS programs go hand-in-hand and don’t realize you can use them separately.”
He continues, “Even in self-managed programs, companies want increased visibility for risk management and compliance. SimpleVMS streamlines these processes and many more, freeing up time.” Integrating a self-managed contingent labor program with a Human Resource Organization (HRO), like ClearPath, providing EOR, AOR, and Independent Contractor Compliance with the technology of a VMS company makes it possible for corporate HR to have processes in place giving them peace of mind.
Companies may be concerned about taking their contingent labor programs in-house. They may also be leery of allowing their managers to self-source, and rightly so. What is improved about the self-managed programs of today is that organizations can design their self-managed and self-sourcing programs to be value-focused, nimble, and innovative, while ensuring it is part of the contingent workforce management umbrella, safeguarding compliance. This requires layers of compliance screening to compensate for the absence of traditional intermediary protections.
EOR, AOR and IC Compliance combined with VMS technology services are a recommended service layer for self-managed programs using non-agency contractors, as they provide contractor engagement protections at a fraction of cost. These alternative options are becoming the contingent labor channel of choice, as workforce demographic shifts move toward freelancers and independent contractors. Another option is that companies might refer to their book of people they know and just re-engage retirees (alumni) as independent contractors (1099). This can be very risky if not done correctly.
ClearPath is collaborating with SimpleVMS, because there is a difference in Vendor Management System companies. SimpleVMS combines easy-to-use technology, a team of passionate experts who communicate, and unsurpassed customer service. Work with a leader in the industry for outsourced Human Resources functions associated with contingent workers. ClearPath provides an integrated program model to manage both freelance risk and spend. We identify risk, shield our clients, and operationally support their self-managed, self-sourcing, on-boarding, and contractor pay and administration needs.
ClearPath Workforce Management risk mitigation services keep your IC engagements compliant with federal auditing and state agencies. Our IC compliance tool, ClearIC™, provides a multi-step process which includes technology gathering and the human element (2-person review in making an IC status determination). Our adherence to worker classification compliance enables the engagement of this highly skilled talent and expands your talent supply chain. ClearIC™ can automate and simplify the Independent Contractor evaluation process while mitigating your risk, via our full-service IC vetting process.
Contact ClearPath for a complimentary discovery call and 1:1 review of your current worker status. Let ClearPath assist your organization in considering contingent labor program options.