In the world of flexible staffing, a Master Vendor and a Neutral Vendor are two very different types of third-party Managed Service Providers that organisations use to procure and manage their flexible workforce.

A Master Vendor is a single staffing agency that has an exclusive agreement with an organisation, acting as the master supplier for sourcing and procuring flexible workers. In such a scenario, the Master Vendor is held accountable for fulfilling all flexible resourcing requirements

Pro’s of utilising a Master Vendor:

• Single point of contact
• Single invoicing
• Direct supply of workers via the Master Vendor itself and it’s associated brands

Con’s of utilising a Master Vendor:

• Utilising a master vendor will restrict supply and does not enable access to the entire available contingent workforce as you are utilising a single supplier.
• A master vendor is unlikely to be able to support all staffing groups.
• If a master vendor cannot fill a vacancy they look to external agencies for support – however, external agencies view master vendors as a threat so often increase rates.
• If the master vendor cannot fill a vacancy, procurement waivers are needed to go off-contract.
• High risk of vendor lock-in – where a client organisation is tied to a single vendor and is unable to change without incurring significant costs or disruption to its operations.

A Neutral Vendor is a supplier that provides a platform for various staffing agencies to compete for a client’s business, meaning you aren’t just relying on one supplier to find your temporary workers. The Neutral Vendor still acts as a single point of contact, but also as an impartial facilitator between the various staffing agencies and the client organisation. This enables the client organisation to choose the best agency available to supply its workers based on a variety of factors such as cost, quality of service, and experience. In this case, the Neutral Vendor does not have an exclusive agreement with any agency and the client organisation has the freedom to choose the agency that best suits their needs.

Pro’s of utilising a Neutral Vendor:

• Single point of contact
• Single invoicing – ability to pay agencies up front and consolidate invoices.
• Bespoke supply chain of multiple staffing agencies built to meet specific needs.
• Access to the entire contingent workforce across a local or national region.
• Full impartiality in the selection process – not affiliated with any single agency supplier.
• Zero risk of vendor lock-in – the client has flexibility to change staffing agencies if it is not satisfied with the quality of service or the workers provided.
• Ability to drive competition between agency supply chain rates ensuring the best value.

Con’s of utilising a Neutral Vendor:

• There are no cons!

In conclusion, while a Master Vendor and a Neutral Vendor both have their advantages, a Neutral Vendor will ultimately provide greater transparency in the selection process and access to a wider pool of available talent, whilst also delivering competitive rates and cost savings, improved invoicing and operational efficiencies, and reduces the risk of vendor lock-in.

Utilising a Neutral Vendor will also improve supply chain relationship management as they act as an intermediary between the client organisation and the staffing agencies, resulting in better communication, improved dispute resolution, and a more collaborative relationship between the client organisation, the agencies and the temporary workers.

Speak with Plus Us today to find out how our Neutral Vendor service can help your organisation.