- Demand for significantly faster turnaround times. VMS vendors are often rated on how quickly they can turn around job requirements and the number of candidates they can submit. Responses are expected in hours, versus days. The result? The VMS is quickly inundated with unqualified candidates, leaving little time to accurately select the best candidates for each opening.
- Lower submission-to-hire ratio. Many staffing firms seek to develop relationships with hiring managers in order to better understand their clients’ business goals, work cultures and team dynamics. This intimate knowledge enables them to conduct more strategic searches, limit submittals to a small number of highly qualified candidates and achieve a high submission-to- hire ratio. The VMS model virtually eliminates personal contact with the hiring manager and leaves staffing firms uncertain about the desired personal traits — such as work ethic and personality fit — that are often key factors in hiring.
- The increasing challenges of hiring and retaining VMS recruiters. It’s a catch 22: staffing firms must have strong recruiting teams in order to meet the fast turnarounds required in VMS relationships. However, many good recruiters are not willing to work on the high-pressure, low-margin requirements inherent in VMS engagements.
- Misleading performance ratings. Success is measured differently in VMS Staffing firms are often evaluated on the quantity of submittals per open requirement instead of the quality of the candidates submitted for each opening. In fact, vendors are often contractually obligated to respond with a minimum of two submittals for more than 80 percent of open positions or risk poor scorecard ratings and even losing their contract.
- Lower margins and lower profits. Competing for a spot on a VMS vendor list often means lowering rates. Coupled with the need to ramp-up recruiting resources to meet shorter timeline requirements, staffing firms are experiencing increased margin pressures.
- Faster ramp-up. Working with offshore providers, staffing firms can engage recruiters who already know the intricacies of the industry in a matter of days, as opposed to the U.S. average recruiter ramp-up time of six to eight weeks. Your organization can add 20–30 recruiters to your team in the same amount of time it takes to source, interview and hire one internal recruiter! Additionally, having recruiters based offshore in countries such as India extends your recruitment efforts to 24-hours a day. The ability to quickly power recruiting teams with proven, talented recruiters who can work 24/7 enables your firm to maintain margins while meeting VMS expectations.
- Improve the bottom line. Benefits such as speed to market, flexibility and ease of use all help recoup margins eroded by VMS. Plus, staffing firms save significant costs associated with hiring onshore recruiters such as budgeting for more hardware and workstations, procuring additional software licenses and assuming higher job board expenses.
- Ease of use. Engaging a team of offshore recruiters keeps leadership teams focused on building the business and placing top candidates. Time is more effectively used, as the leadership teams are not pulled away to deal with nonproduction related activities such as training new recruiters and dealing with the frustrations associated with HR issues.
- Top Technology. Offshore recruiters typically have access to the latest recruitment technology. Most offshore teams invest heavily in making sure their recruiters use advanced applications that allow them to cross-reference, collaborate and communicate with other recruiters on open requirements. This gives staffing firms the ability to maximize their sourcing and fulfillment efforts.
A staffing firm with 15 recruiters wanted to grow its revenue. This company did significant business with a VMS customer and needed to increase submittal volume to retain its relationship and preferred vendor status.
Keeping pace with the number of VMS submittals required was not only challenging, but also taking time away from other client relationships. The firm needed to quickly increase its recruiting resources. However, with margins already squeezed, they didn’t know how to accomplish this in the most cost-effective way.
The firm explored offshore partnership options and selected an 247Hire to supplement its U.S.-based recruiting staff. They began by adding just one offshore recruiter. Once their comfort level increased and they realized the benefits of augmenting their recruitment capabilities, they engaged four more offshore recruiters within the next eight months.
The firm was able to solidify its position as a preferred vendor, meet its client’s expectations and keep costs in line. Of the firm’s 20 recruiters, the five they engaged from the offshore partner accounted for 50 percent of the placements each month and cost only 8.2 percent of the total budget for recruiter expense and compensation.