With the advent of the Vendor Management Systems (VMS) and Managed Service Providers (MSP) I am seeing more and more large companies treating both their recruiting services and professional services personnel as “commodities”. From the corporate point of view, these systems do have some clear benefits, particularly for their ability to insure compliance with corporate policies and to control corporate spending on services.

The downside is to treat your professional staff and service companies as commodities is at odds with the common view that “people are our number one resource”. If you truly believe that your people are what make the difference in your company’s ability to compete, then treating them as commodities is a short cut to mediocrity. If you really think that all programmers are equal in their ability to develop reliable computer systems, you have either not been paying attention or you have already commoditized your labor force to such an extent that you have achieved the inevitable result of commoditization, mediocrity.

If you wonder how small start ups can create great products and display a nimbleness that their larger corporate competition cannot match, it is in large part because they believe in excellence and recruit the best people, which means paying more for those people, but getting a better value, because the best people are more productive. Top notch software developers are literally 3 or 4 times more productive than the average, and in some cases even more productive and valuable to their employer.

This is equally true of your service providers, if you think all recruiting firms are fishing in the same pond and delivering a commoditized service level, you are missing out on the benefits of truly excellent service. I believe that excellent service will always prove to be a better value than a standardized commoditized service. Many VMS and MSP systems have rules of engagement that seriously devalue the service that can be delivered. The lack of feedback in these systems eliminates the learning process for the service provider. If you have a great candidate, how do you relay that information to the manager, if you are limited in your ability to communicate with the decision makers? These systems typically do not let the recruiting company nor the candidate know why they are not successful, thus creating a situation where the same mistakes are made time and again, essentially wasting the time of all involved. Both the service provider and the candidate become disillusioned with the hiring company and begin to look elsewhere for opportunities that provide a better return on their time investment.

VMS and MSP Systems offer the opportunity for some real savings and do in fact bring value to the users. The implementation of these systems frequently is at odds with attracting and retaining the best people. I believe that you do not want the cheapest resources, but rather the best value for your money. This sometimes means paying more per unit of labor to get a lower cost output. It is frequently true that the best programmers get the highest rates, but they produce a better product, resulting in a lower cost product. VMS/MSP Systems do not automatically preclude a company from competing for the best resources, but when the implementation of those systems hinders effective communications and eliminates high quality feedback on and to candidates, as well as to the recruiter, they seriously diminish their value. Unfortunately, it is the line manager that pays the price for these ineffective processes. The manager must review more resumes, interview more candidates and generally have to cope with a reduced level of quality service.

Fortunately, most of the jobs in this country are still with smaller businesses and those businesses will always have an inherent advantage in competing for the best talent against those companies that only give lip service to the concept of “people are our number one resource”.

Phil Sawyer