Useful Definitions & Examples
A Brief Introductory Note
Below you will find several essential definitions and associated illustrations to ground your initial framework for evaluating a talent-related tool. Specifically, what is a vendor management system (VMS), managed service provider (MSP), supplier, buyer, contingent workforce program, and human capital supply chain. Please note that this document utilizes the Staffing Industry Analysts (SIA) definitions lexicon as the generally accepted dictionary when referring to this market. As a result, the lexicon has been sourced through the footer within this document.
Definitions and Associated Examples
A vendor management system (VMS) is “[a] service segment of the Talent Acquisition Technology Industry. A VMS is an Internet-enabled application that acts as a mechanism for business to manage and procure staffing services through third-party staffing suppliers (temporary help as well as, in some cases, permanent placement services) as well as outside contract or contingent labor. VMS systems now often include the management of Statement of Work (SOW) consultants and outsourced services within their scope of coverage. Typical features of a VMS include supplier management, order distribution, consolidated billing, risk mitigation, headcount tracking and significant enhancements in reporting capability over manual systems and processes.1”
A managed service provider (MSP) is “[a] service segment of the Process Outsourcing Industry, MSP is a service whereby a company takes on primary responsibility for managing an organization’s contingent workforce program. Typical responsibilities of an MSP include overall program management, reporting and tracking, supplier selection and management, order distribution and often consolidated billing. The vast majority of MSPs also provide their clients with a vendor management system (VMS) and may have a physical presence on the client’s site. An MSP can also be responsible for the client’s direct sourcing, and may or may not be independent of a staffing supplier1.”
A supplier: “[s]taffing firms are referred to as suppliers by some contingent workforce buyers (whether hiring organizations or VMS/MSP entities)1.”
A buyer is an organization or company who looks to acquire contingent workforce and/or permanent talent through both agency (i.e., staffing suppliers) and non-agency means.
A contingent workforce program is “[t]he way a company or institution organizes its need for and use of
(normally large numbers of) contingent workers (See also: Contingent Worker). This may be limited to staffing, but usually includes other elements to optimize cost, quality, efficiency and level of risk. A program usually, but not necessarily, includes services from third parties. A Contingent Workforce Program is based on, or integrated into, one or more Sourcing Models. (See also: Sourcing Models, Hybrid Program.)1”
Human Capital Supply Chain “…refers to the integration of business planning, strategic workforce planning, staffing and recruiting processes and technology to enhance corporate productivity and profitability. Employing methods of common manufacturing and distribution supply chain management principles to human resources and human capital, corporations create an end-to-end, human capital supply chain1.”
1The Lexicon – Staffing Industry Analysts