Master Vendor and RPO: What do they mean for factoring services?

The recruitment industry is changing rapidly at the moment, with things like factoring services and managed services helping to shape the industry in a way that allows recruitment agencies to meet the changing needs of organisations.

There are many benefits to the managed service model including a reduction in costs, a streamlining of processes and a freeing up of internal resources to focus more on strategic concerns. There are different types of managed service provisions and the best choice for each business will depend on their individual issues and problems – for example an it recruitment finance company will have different needs than a finance recruitment company. In this article we will summarise the differences between each model, and discuss the specific benefits they can bring.


Master Vendor


A master vendor recruitment model is one that is based on the recruitment agency taking on full responsibility for handling the staffing provision for their client or clients. It covers permanent, contract and contingent staffing through both direct sourcing and 2nd tier supplier solutions.

It is very common place these days for businesses to recruit contract or contingent staff, as a way of filling gaps in the workforce quickly or if they suddenly have to handle a large contract. The great advantage of this for businesses as it offers both flexibility and increased productivity more quickly than other recruitment methods.

However, the nature of the recruitment industry within the UK means that it is not unusual for companies to have contracts with more than one agencies. However, this opens them up to a lack of control throughout the hiring process as so many other people are involved, and also an inconsistency in the approach to hiring.

This is where the master vendor contract comes in, as it allows one single recruitment company to handle the entire process. Their service may also include advertising, payroll and supplier management as well as invoicing and reporting processes.

The benefits of this type of agreement to a business are:

  • Quantifiable cost reduction
  • Streamlined processes
  • Complete transparency throughout the process
  • Greater consistency throughout the hiring process
  • Time saving for both HR and Line Management


Neutral Vendor


Many businesses these days have supply chains which demand that they have diverse and specialist recruitment needs – which can be challenging for them to manage. A broad supply chain means overseeing multiple relationships with suppliers, processing multiple invoices and also managing performance.

A neutral vendor is perfect for this situation as they offer firms the best of both worlds – as they can manage the process without giving preference to directly sourced candidates which allows for clear competition. The supplier base is as broad as it needs to be, but it removes the need for managing multiple suppliers and agreements from the remit of the company.


Recruitment Process Outsourcing (RPO)


We talked about RPO briefly in our last blog, and it is the term used when a business outsources part of or all of their recruitment functions to an external recruitment company. This is the ideal solution for those firms that have a high volume of activity for both contract and permanent employees.

There are lots of different reasons why businesses might opt for an RPO agreement, with the most popular one being the need to hire a large number of candidates.  A lack of optimised talent management tools within the HR function of a business can leave them unable to satisfy all of their hiring needs. An RPO solution therefore allows a firm to reduce costs while also attracting the top talent. It also means that compliance issues and legal risks can also be taken care off by the RPO firm who can also provide a business with more effective metrics to inform later recruitment efforts.

RPO is growing in popularity as a very cost-effective way of attracting top tier candidates in a very flexible and scalable way. Furthermore, the improvement of the overall candidate experience and the reduction in the time-to-hire from the use of an RPO will greatly enhance the Employee Value Proposition for that company.


Hybrid Solution


The Hybrid Model, also known as the Blended Model, is a talent acquisition approach which encompasses a single approach to both permanent and contract hiring. As the name suggest, the hybrid model takes the best elements from the models mentioned above, and blends them together to create a recruitment programme that is bespoke to the company and so is flexible to their needs.

When deciding which managed service provision to go with, it is important for a company to clearly establish what hiring issues they are currently facing and what needs to change. Then you just need to weigh up the benefits of each model to decide which is the best fit.

If you are looking to scale your recruitment business, then you need to talk to our experienced team today. We can offer you expert advice on the best tailored finance solutions for your recruitment company, and one of our specialities is healthcare recruitment finance.

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