17 November 2020
"If, as an MSP, you want to serve the interests of the hirer you represent and the interests of the professionals to be hired, you make sure that, if a supplier does not actually add anything, there are no unnecessary margins to be paid by the hirer and the professional. That's what Niels van Berkel, director of Planet Interim, says. He explains what he means.
"If an MSP, a Managed Service Provider, is able to reach candidates in the market on behalf of the hirer by using one or more 'self-sourcing tools', without the intervention of agencies, and does not require any or much less margin for this, apart from the regular settlement fee as a broker, this quickly saves €15 per hour. So if you share that saved fee with each other, it means €7.50 more for the professional and €7.50 less to be paid by the hirer. That is only fair hiring. Certainly when it comes to tax money, for example, you can't really miss the opportunity to save around 10 to 20% on hiring!
Van Berkel continues: "Suppliers can, depending on the agreements made, calculate a margin of between 10 and 25% for a placement. Sometimes a bit more, sometimes a bit less. As an MSP, you only use these when self-sourcing tools do not work well enough and when a supplier can really add value. A condition for this, in my opinion, is that the supplier then needs to be given much more commitment than is usual at present in order to be able to deliver quality. At the moment, five to six suppliers are usually running after an assignment, so not too fast, and present the 'low hanging fruit' as candidates because of the pressure of time and price. After all, they only have a 20-30% chance of completing a job...".
This is not a good situation for anyone, because:
- The hirer often does not get the best candidate, but the candidate that can be reached most quickly by recruiters,
- the hirer does pay a margin for this,
- the professional actually pays because the margin is deducted from his/her rate,
- out of five to six agencies, four to five have worked for nothing, and
- To conclude, unfortunately, many intermediaries do not respond to the candidates, due to the same pressure of time and limited commitment on the part of the (MSP of the) hiring party.
If you, as an MSP, are able to give the hirer direct access to the candidate market, and give the suppliers less but better work, then the flex market will become a lot healthier for everyone. The result is better service, better matches and less waste in hiring costs.