Master Supplier For Temp Workers Is ‘Rising From the Ashes’

Staffing Industry analysts logoStaffing Industry Analysts says the master supplier method of hiring and managing contingent (temporary) workers is making a comeback, often now in conjunction with a managed service provider.

In a blog post reference to SIA’s recently completed “2013 Contingent Buyer Survey: Primary model used” the research organization says that this year, “33 percent of buyers with CW programs of less than $20 million in spend used a master supplier as their primary supplier management model, up from just 12 percent in 2009; use also rose notably among buyers in the $20 million to $99 million spend range.”

In a blog post reference to SIA’s recently completed “2013 Contingent Buyer Survey: Primary model used” the research organization says that this year, “33 percent of buyers with CW programs of less than $20 million in spend used a master supplier as their primary supplier management model, up from just 12 percent in 2009; use also rose notably among buyers in the $20 million to $99 million spend range.”

Despite the resurgence, SIA says “global temporary staffing labor is managed either by an MSP or run through a VMS.” The total value of the contracts managed by one or the other of the methods is estimated by SIA to top $100 billion.

SIA lists Fieldglass as the largest VMS, managing $27.4 billion in billings. Allegis Group Services is the largest MSP vendor managing $8.3 billion.

Traditionally, master suppliers were the primary provider of temp and contract workers to a client. They both supplied the workers, and handled much or all the paperwork, even when they subcontracted with other firms to fill orders. As the use of contingent workers expanded across industries and internally across divisions, employers turned to master service providers (MSPs) or vendor management systems (VMS).

MSPs began to take share, in part because they were considered vendor neutral since they sourced firms to provide staffing services, but did not provide workers themselves. VMS became popular mostly at the largest firms, which opted to manage their temporary worker program in-house.

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SIA chart - MSP VMS use 2009By 2009, the MSP model was the most commonly used method of managing and provisioning a contingent workforce, according to survey data from Staffing Industry Analysts. That year, 47 percent of the surveyed firms reported using an MSP, with technology and telecom firms most likely to use that model. Only 10 percent of the firms in the survey used a master supplier.

Now, the master supplier is “rising from the ashes.”

“What has been established in the last decade is that it’s easier for a master supplier to fulfill certain specialized requirements than have it be a neutral bid every time clients need that resource, be it shift work or short-term needs,” says Kersten Buck, director, strategic solutions at SIA.

Master suppliers today work in conjunction with an MSP. The master supplier fills orders themselves or finds other suppliers, while the MSP manages the program. Says SIA,”MSP manages statement-of-work workers, independent contractors, compliance, invoicing, keeps the customer abreast of trends in the marketplace, etc. ”

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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