Why Now Is a Good Time to Prioritize VMS Business.
Recent reports in the staffing industry indicate that it’s a good time to prioritize VMS staffing and consider it as a viable opportunity. Not only is the number of possible VMS staffing accounts growing, but the competition for those accounts is decreasing.
According to the Staffing Industry Analysts’ report on the VMS landscape, “73% of reported new contracts in 2019 were awarded by buyers or programs that have not had a previous VMS solution in place, suggesting that despite the high level of market penetration, particularly in North America, there is no shortage of organizations seeking a VMS solution for the first time, many of whom may be seeking to bring control to smaller programs.”
VMS adoption was expected to increase again in 2020. Though the actual growth was less than predicted, this is attributed to the suspension of VMS adoption plans during the pandemic. Growth in VMS is expected to resume in 2021, especially among mid-size companies.
More opportunity is great. Fewer companies competing for that opportunity is even better.
As revealed in Bullhorn’s survey of VMS trends, only a third of staffing firms planned on increasing VMS business in 2020. It was the lowest-ranked priority of all surveyed options. Of greater priority were investments in technology and operating budget. These priorities were largely postponed when the pandemic hit and the staffing industry struggled. As we emerge and recover, firms are returning to their earlier priorities. As despite staffing firms reporting ~20% of revenue from VMS staffing, expanding VMS accounts remains a lower priority. For staffing firms that know how to succeed in VMS staffing, this presents a golden opportunity: more VMS accounts and fewer competitors.
HOW TO REMAIN SUCCESSFUL IN THE VMS BUSINESS
From our experience working with hundreds of clients, staffing firms that succeed in VMS staffing achieve success in either of two ways:
- Build dedicated in-house VMS team:
A staffing company will designate a team of recruiters dedicated to VMS staffing. These recruiters have experience with VMS tools and understand the demands unique to VMS recruiting. They work outside traditional business hours (yes, even for a recruiter), and they move quickly on candidate submissions. As VMS accounts typically won’t offer the same commission opportunities as non-VMS accounts, recruiters in a VMS practice are often incentivized differently. These recruiters are still paid the US market salary, and firms work their calculations to manage the low margin VMS business. You can also read our article “How to stop wasting time with VMS” to understand the challenges and how to address them.
- Outsource VMS accounts to an offshore recruitment services firm:
VMS staffing accounts may be challenging, but the rewards are worth it. To maximize those rewards, many staffing firms prefer to outsource their VMS accounts to an offshore VMS recruiting specialist. This isn’t any offshore recruiter, it’s a recruiter with specific experience recruiting for VMS accounts. In coordination with the staffing firm, the offshore VMS recruiter identifies qualified candidates within time requirements, submits candidates directly to the client portal (if preferred), and manages scorecard performance metrics. Due to the range of industry expertise within an offshore support team, a staffing firm can leverage this expertise and work on a greater variety of roles and/or industries. In addition, with offshore VMS staffing support, staffing firms benefit from cost savings that are ideal for the competitive rates and low margins typical in VMS staffing. Thus outsourcing the VMS practice is not just a cost-effective solution, but helps staffing companies expand into sectors not currently served.
Interested in exploring what offshore VMS support can do for you? Contact us at [email protected], or here. We’d love to speak with you!