Pharmaceutical companies are drowning in staffing vendors—and it's costing them a lot of money. Large and mid sized pharmas
often use upward of 100 staffing providers for both temporary and permanent hiring. Costs have gotten way out of hand, and
so has duplication of effort.
Andrew E. Schultz
Frighteningly, many companies in the industry have no idea as to the actual number of staffing vendors they use. They have
neither the time nor the man power to effectively track costs and, for the same reasons, can't determine which vendors are
consistently providing good people and which are producing spotty results. As such, this task is mostly left to individual
hiring managers. The human resource departments that do make an effort to track quality and cost effectiveness often get bogged
down in all the paperwork.
The problem is growing worse in today's economic climate. Many companies, in addition to hiring some full-time workers, are
bringing on large numbers of temps provided by staffing companies until they see the "wings" of the economic recovery. This
means the entire process is trickier and more complex than ever.
Solution in Sight
Fortunately, there is a fast-growing trend that will soon become the industry norm: the "vendor neutral" model of Vendor Management
Services (VMS). The VMS concept calls for the use of one vendor-neutral company to manage the entire process: all the tracking,
quality control, cost management, and sifting through potentially thousands of applicants and hundreds of staffing companies.
In sum, all the general and admin istrative costs attendant to working with staffing firms is transferred out of the pharma
company and into the hands of one partner.
Of course, finding the right partner often can be a tricky process.
The Way We Were
When the pharma sector first started using staffing companies, hiring managers generally called their friends and relatives
for recommendations. But this "buddy" system was fraught with potholes. For one thing, companies were not necessarily getting
the best price. For another, they were not always obtaining the best worker. There was no centralized reporting mechanism;
each department was acting like a lone wolf in regard to cost containment. And there simply was no quality control over the
The next big thing introduced was the original form of VMS. This was a system managed by a single staffing provider, who supposedly
picked out the best candidates from the various vendors. However, this was like letting the fox into the henhouse. Which company's
candidates were picked the most? The VMS vendor's. The process was simply not unbiased, and this meant it worked quite well
for the staffing company managing it, but not so well for the company needing the workers.
How to Hire
VMS is not a bad concept. But it is impossible to use it correctly if you don't have a partner that is totally vendor neutral—one
that will pick the best candidate, regardless of any other considerations. For this reason, many companies are now starting
to use VMS partners who are not in the business of supplying workers. But, again, here's where it gets complicated. You've
got to know what to look for in a partner or else you'll just be substituting one bad system for another.
When selecting a VMS vendor, consider the following:
Customization. Pharma companies don't want to be just a face in the crowd when it comes to staffing vendors. They need a customized system
that is tailored to their individual needs. So be sure to choose a VMS partner that has a state-of-the-art, proprietary web-based
system that manages the entire process. Furthermore, pick a partner that provides on-site management. If your partner is on
site, problems don't become crises and wasted minutes don't turn into hours (or worse, days).
Competition. Choose a company that spreads out the requirements among a group of approved staffing vendors. Each order should be processed
in a competitive environment, for quality of candidates as well as price.