Outdated Preferred Vendor Staffing Model in the Modern Economy

According to the US Bureau of Labor Statistics figures of May 3rd, the US added 913,000 temporary workers since the end of the recession in June 2009 and almost 20% of the group represents new jobs. The total number of temporary employees increased to 2.66 million in April and will most likely eclipse the record number established in April of 2000. Companies are hiring temporary or contract workers in unprecedented numbers and the competition between suppliers are more competitive than ever before.

In the past suppliers have clamored to be on preferred vendor lists, but is it the best solution and are companies moving away from this model?
The preferred vendor list model provides a limited and stagnant view for major companies looking for a consistent stream of qualified talent. Companies become solely dependent on candidates from a limited supplier list and the system breaks down very quickly. Inherently over time, the lack of competition will decrease the number of viable candidates, lengthen vendor response time, and establish an increasingly inflexible relationship that makes maintaining and growing a business very difficult. Furthermore, managing a preferred vendor list requires continuous research to add top suppliers, aggressive maintenance to analyze production, and allocating daily capital resources for a long term flawed system.

Companies may receive discounts in volume and streamline their process, but what do they sacrifice when a vendor “makes the cut”?

Will their vendor work as hard as before knowing they have limited competition?

Are some of the best suppliers not utilized because of the long-term constraints of the preferred vendor list model?

The solution is a model that meets the needs of the three largest corporate concerns of supply vendors: Competition, Vendor Management, and Corporate Culture Consistency. As supplier and contract employee demand continues to increase, employers will need a vendor “hub” that ensures a competitive efficiency and a streamlined management approach with a single contact point. Suppliers will also benefit from a model that allows them to compete on a level playing field rather than becoming complacent or completely shut out by the current preferred vendor list model.

SkillGalaxy was created to meet the needs of employers and suppliers alike. Businesses can find optimal competitive pricing, qualified candidates, full VMS skills, and a single contact source to ensure a corporate culture fit. Suppliers compete on a level playing field that allows them to work with any business, build their brand, and showcase their skills to a diverse landscape of businesses. It’s the model for the 21st century marketplace that allows the employer and supplier to meet in a perfect and equal relationship of consistent efficiency and profitability for everyone.

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