1. Primary contingent workforce management
models—who’s using what, and why
Key findings: 11-20-09
Jon Osborne, josborne@staffingindustry.com
While buyers typically use a combination of tools to Noël Calvi, ncalvi@staffingindustry.com
manage their contingent labor force, in most cases
they rely primarily on one model, and that model Results are based on findings of our 2009 Contingent
typically evolves as spend increases—from a go-it- Buyer Survey, conducted in September 2009, and
alone strategy or master supplier, to MSP, to internally reflect the opinions of buyer respondents from 171
managed VMS. large (1000+ employee) companies.
Overall, MSP is the most popular primary contingent
workforce management model and is particularly so
among buyers in the tech/telecom, pharma/bio and
energy/chemical industries; buyers from larger
companies; IT buyers; and multinational buyers.
This analysis is based on responses to the question:
“How would you describe the closest model you
primarily use to manage your contingent workforce
program? a) Use a master staffing supplier who either
fills our positions themselves or subcontracts to other
staffing suppliers, b) Use a managed service provider
(MSP) who manages our staffing suppliers and
distributes our open positions to them, c) Manage our
program internally using a VMS, d) Manage our
program internally not using a VMS.”
Confidential Report – Not for Distribution | © 2009 Crain Communication Inc. All rights reserved.

2. What proportion of buyers primarily use which
contingent workforce management model?
While buyers typically use a combination of
tools to manage their contingent labor force, in Primary Model Used to Manage
most cases they rely primarily on one model. Contingent Workforce Program
Almost all of the 171 buyer respondents to our
Master
survey were able to select one of the given
Supplier, 10%
staffing management tools as their primary
model.
Manage our
program
When it comes to the primary method used to internally not
manage their contingent workforce programs, using a VMS,
MSP, 47%
47% of buyers manage using an MSP, 23% 21%
manage internally using a VMS, 21% manage
internally not using a VMS and 10% use a
master supplier.
Manage our
program
internally
using a VMS,
23%
Confidential Report – Not for Distribution | © 2009 Crain Communication Inc. All rights reserved.

3. Which buyers use the various CW
management models as their primary model?
MSP tends to be the most popular primary
Primary Model Used to Manage Program
contingent workforce management model
Industry Internally Internally Master Staffing
across the various buyer categories, and is MSP
(Ranked by MSP) with VMS w/out VMS Supplier Total
particularly so among buyers in the Technology/Telecom 0% 0% 100%
74% 26%
tech/telecom, pharma/bio and energy/chemical Pharma/Biotech/Med 60% 20% 7% 13% 100%
industries; buyers from larger companies; IT Energy/Chemical 55% 36% 0% 9% 100%
buyers; and multinational buyers. Finance/Insurance 45% 32% 21% 3% 100%
Business Services 40% 20% 20% 20% 100%
Manufacturing 38% 13% 38% 13% 100%
Buyers most likely to manage primarily Retail/Consumer 29% 12% 47% 12% 100%
Healthcare NA NA NA NA
internally using VMS are those in the
Internally Internally Master Staffing
energy/chemical and finance/insurance MSP
Size (employees) with VMS w/out VMS Supplier Total
industries; and buyers of engineering/design 1,000 - 1,999 NA NA NA NA
skills. Buyers most likely to manage internally 2,000 - 4,999 36% 21% 29% 14% 100%
not using VMS are those in the manufacturing 5,000 - 9,999 44% 19% 25% 13% 100%
and retail/consumer industries; and buyers of 10,000 or more 51% 24% 16% 9% 100%
Skill Segment Internally Internally Master Staffing
office/clerical skills. (Ranked by MSP) MSP
with VMS w/out VMS Supplier Total
Information Technology 52% 27% 17% 3% 100%
Master staffing supplier was the least frequent Industrial/Logistics 47% 5% 26% 21% 100%
Engineering/Design 47% 32% 11% 11% 100%
choice for primary model, but was still Office/Clerical 25% 25% 42% 8% 100%
moderately popular among buyers in the Healthcare NA NA NA NA
business services industry and buyers of Internally Internally Master Staffing
MSP
industrial/logistics skills. Region with VMS w/out VMS Supplier Total
U.S. only 39% 25% 25% 11% 100%
Multinational 57% 20% 14% 9% 100%
Internally Internally Master Staffing
MSP
All buyers with VMS w/out VMS Supplier Total
Total 47% 23% 21% 10% 100%
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4. As spend increases, primary contingent
workforce management model evolves
Among small buyers (those with less than Percent of Buyers Primarily Using Selected Supplier
$10MM in spend), the most popular method of Management, as a Function of Buyer CW Spend
managing their contingent workforce program is
go-it-alone, not using VMS, master supplier or 100%
MSP. Almost half of small buyers—47%— Manage
manage on a go-it-alone basis. internally using
80%
a VMS.
However, by the time spend increases to the 60%
$10MM-$49.9MM range, 50% of buyers are Master Managed
primarily using an MSP. That share increases staffing services provider
40% supplier
to 69% by the time spend reaches the $100MM-
$149.9MM range.
20% Manage
internally not
Beyond that magnitude of spend, interest in using a VMS
0%
MSP, though still high, declines and use of <$10MM $10-$49.9MM $50-$99.9MM $100- $150- $500MM+
internally managed VMS increases, perhaps as $149.9MM $499.9MM
critical mass is reached with regard to the
Buyer Annual Contingent Workforce Spend
internal resources necessary to manage the $10- $50- $100- $150-
contingent program without MSP assistance. <$10MM $49.9MM $99.9MM $149.9MM $499.9MM $500MM+
Manage internally
not using a VMS 47% 21% 19% 0% 13% 0%
Master staffing
supplier 21% 10% 7% 6% 7% 7%
Managed services
provider 11% 50% 67% 69% 47% 43%
Manage internally
using a VMS. 21% 19% 7% 25% 33% 50%
Total 100% 100% 100% 100% 100% 100%
Confidential Report – Not for Distribution | © 2009 Crain Communication Inc. All rights reserved.

5. Reasons given for selecting primary
contingent workforce model
Go-it-alone model: Manage our program internally Master supplier model: Use a master staffing
not using a VMS, MSP or master supplier supplier who either fills our positions themselves
or subcontracts to other staffing suppliers
Among buyers not using VMS, MSP or a master
supplier, many said that was just how their contingent Among buyers primarily using a master supplier,
workforce was managed when they started their job, reasons for doing so ranged from small firm size to the
not that it was a conscious decision. Others generally need to outsource the process.
cited one of two themes: a) The desire to retain control
of spend/compliance/quality of temps/CW program
tracking/metrics, and b) cost or budget constraints.
MSP model: Use a managed service provider VMS model: Manage our program internally using
(MSP) who manages our staffing suppliers and a VMS
distributes our open positions to them
Nearly one-third of those using VMS indicated the
The most cited reason for using an MSP was retaining reason as retaining control of spend/compliance/
control of spend/compliance/cost/quality of temps/CW cost/quality of temps/CW program tracking/metrics.
program tracking/metrics. Cited reasons included: Cited reasons included: “Gives us the opportunity to
"Cost savings, risk mitigation, spend tracking, quality closely monitor supplier contract compliance and
improvement.“ "Maximize savings, quality, retention, performance, control spend, control rogue spend.”
speed value proposition.“ "Drive compliance to “We can control costs and how the program runs. We
centralization of temp staffing function while balancing keep things competitive with our vendors.” “Maintain
incumbent supplier utilization.“ "Centralized process, control of supply base, costs, and performance.”
better reporting, better spend visibility, consistent job
titles/rates/skills.“
Confidential Report – Not for Distribution | © 2009 Crain Communication Inc. All rights reserved.