Insiders debate whether vendor neutrality still has a place in today’s ecosystem: “A business approach, not a structural definition,” by Michael Werblun; “Vendor neutrality has long since evolved,” by Kip Wright.
A business approach, not a structural definition
By Michael Werblun
Vendor neutrality isn’t strictly about vendors or who supplies contingent labor anymore. It is about an objective business approach designed to manage the customer’s labor ecosystem: customer, suppliers and workers. That translates into the right hires at the right price at the right time. It is not a structural model designed to control who fills requisitions. It is a holistic business approach that focuses on broad compatibility and balance within a supply and demand ecosystem that favors no party unfairly over any other. By its very nature, it should offer no bias.
A neutral business approach is not about who has the most knowledge, breadth and experience in finding contingent workers. It’s not about negotiating the lowest price or the lowest pay rate. It’s about finding solutions that support customer goals and benefit every stakeholder. This approach enables you to make decisions based upon the best options available, including utilizing independent, unbiased market data to improve customer programs.
It promotes efforts to keep the ecosystem healthy even when the customer may be the obstacle to balance.
Program neutrality provides for both standardization and unbiased business practices. It establishes consistent standards and protocols that drive program efficiency, while allowing for flexibility and pragmatism. It is the optimal way to help customers manage complex spend categories beyond hourly contingent workers. The customer has goals that the program needs to achieve. Suppliers have goals they want to achieve and the contingent workers have goals they want to achieve. By taking a neutral business approach, the program goals, suppliers and workers’ goals will all be aligned to support the customer goals.
Vendor neutrality has long since evolved
By Kip Wright
The very act of selecting a vendor implies some form of bias — whether it’s based on the quality of its candidates or the pricing of its service. Yet somehow the term “vendor neutrality” gained favor in the contingent labor community, standing for an ideal that may no longer benefit its ecosystem.
Its original purpose — to impart a measure of trust and objectivity around the management of an organization’s supply community — no longer applies. As a past pioneer in the contingent labor management world, I speak from experience. The emergence of MSPs turned the staffing world on its head. The concept of neutrality in managing a supplier community had a purpose — suppliers would be chosen by the customer, and the MSP would be “blind” to the process of both selection and the award of business.
Somehow along the way the concept has lost some of its purpose and drifted to an extreme position. It’s often used to describe a program management approach that “blinds” the users from ever seeing the suppliers that support them. At times it dictates a random distribution to suppliers without any recognition or preference to those who are differentiating in service quality or value. And it presumes that a larger “pool” of suppliers who can “fight it out” will somehow benefit the end user. I suppose there might be circumstances where this may hold true, but those are few and far between.
Times are changing. Customers are becoming increasingly more sophisticated and challenging the past. They recognize the value in balancing objectivity with decisiveness. They recognize the differences in procuring, for example, general staffing labor for shift assignments vs. a JAVA programmer for a four-month project. And as they do, they also recognize that to achieve the next measure of value and cost savings, a different and more purposeful approach needs to be made.
How will this play out? In my opinion, the past and present will collide. Companies will manage their contingent workforce and the suppliers that earn the right to support them in a more balanced fashion — leveraging elements of neutrality in the selection process, but engaging more substantially with their supply partners in a way that allows investments to be offset by commitments, yielding increased value for both.