Vendor or Partner? The Difference And Why it Matters

Vendor or Partner? The Difference And Why it Matters

by Sara Bennett | June 8, 2021

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the relationship between vendor or partnerThe relationships you have with your  service providers come in different sizes, shapes, and packaging. 

Being in the service industry all my life – I won’t say I’ve seen them all,  but enough to know that some relationships work better than others.  When it comes to staffing or recruiting, your service provider can look like a vendor, selling a specific service with a targeted deliverable, or a partner, working collaboratively to find creative solutions to your staffing challenge.   While the “partner” language can be thrown around as a marketing tag, at PACE we know the  difference first hand.

  • We have a few (often our newer) clients who view us as a vendor and ask us to compete with other vendors to find them that “just right candidate”. These clients get a certain level of service from us that “delivers the goods” which is what this type of client cares about.
  • The majority of our clients, on the other hand, view us as their “partner”, relying on us to offer ideas and  solutions that will go far beyond the transaction, to make a difference to their business.  We are their “staffing consultants”, contributing our expertise in ways that adds value to their business.

I’ll let you speculate as to which of these two types of business relationships gets our best.

This blog is being written to describe the differences between a staffing vendor and a staffing partner.

But first I would like to share some information about how the client/service provider relationships changes depending on the economic environment.

When the recruiting landscape is “good”, with an abundance of candidates available to work, companies often elect develop their own resources to recruit and hire staff.  They can create their own recruiting team, or assign the recruiting responsibility to a specific member of the team who gets “good at recruiting.”

Occasionally you’ll see a company embrace a full blown outsourced solution even when the market is rich with candidates, but that’s mostly a solution used by a start up company who wants to focus its development resources elsewhere.

Its difficult, when candidates are abundant, for a staffing company to become true partner.  If they are asked to provide services, they often find themselves “competitive’ with their in house counterparts who need to justify the $$$ being spent to support their jobs and what they do.   

As the candidate marketplace tightens, we see more companies turn to “outside” resources for extra recruiting support.   When recruiting becomes a business critical process,  companies use third party services to fill in the gaps, provide help filling jobs they don’t have time to do on their own.

This is a time when the vendor/partner distinction starts to make a difference.  Vendors view their work as having a specific job to fill and once that’s done,  they go away.  Partners view these opportunities differently – a chance to really get to know and understand their client’s business and put themselves in a position to anticipate their clients needs for talent in the future – to see the “bigger picture.”

The benefits of a partnered relationship for both the recruiting agency and their customers starts to occur when the focus shifts from a specific transaction to the client’s bigger picture needs.

When the candidate market cranks upward and the right candidates are tough  to  find, the relationships between staffing companies and their clients can, once again, get challenged.   A staffing company’s  clients, once loyal customers, often feel forced to expand their recruiting resources to include not only more internal resources but multiple vendors who are willing to compete with each other for the left overs.

If a staffing company, once a partner, can’t find a solution to this issue, they can find themselves acting like a vendor.  A tight recruiting market tests the depth of a staffing partnership….and if there are no solutions, the partnership struggles.

So what are the fundamental differences between a staffing provider acting like a vendor and one who is a partner?      

According to Webster, and in its simplest form, a vendor is an entity, a person or company,  offering something for sale to a customer who has a need to buy.  The customer decides to buy what a vendor has for sale – or not.  A staffing vendor delivers a candidate which their client can purchase (i.e. hire) – or not.

A partner, on the other hand, is a person or a company who works together with personal or company, to achieve a common goal.  The “partners” share the need to develop the strategies and processes that delivers their shared goal; they share the risks and the rewards of their shared efforts and creativity.

But these definitions are Webster’s and you are likely much more interested in how these two ends of the “relationship spectrum” play out in real life.   

We have identified 8 elements of a client relationship that show the difference between a vendor and a partner.   

1.  Its a basic – all relationships start (and end) with TRUST.  The most important quality of any relationship, business or personal,  is always trust.   When a vendor delivers as promised, trust begins.   And if, over time, that trust grows to a place where a company can trust their vendor to act in their best interests the relationship looks like partnering.   What has your staffing provider done lately to show you that they understand your needs and will figure out a way to deliver them regardless of the impact to them?     

2.  Partnerships require EXPERTISE.  A staffing vendor doesn’t need to understand every aspect of your business to find you an employee.  If your request is clear, most recruiters can screen candidate’s to your specific requirements.

But what if your request isn’t clear? or your specifications out of sync with the candidate marketplace?  What if a client believes that the only way to grow is to hire employees directly, when what they need is a more flexible staffing strategy?

Does your staffing provider have the specialized expertise to understand and provide solutions for the real needs of your business?  To create the right profile for the candidate you need to hire?  Or have the innovative solutions you need to “win” in  a fast moving marketplace?  Do they know your business well enough to offer up ideas or options you may not have thought about?  The level of expertise a staffing agency can bring to the table, the number of ways they can help you solve a staffing need, determines whether they are a vendor or a partner.   

3. How you RESOLVE DIFFERENCES.  Just like any healthy relationship, there may come a time in a business relationship where you and your staffing provider have different perspectives about some aspect of  your preferred candidate profile, your hiring process, or how candidates are being screened for hire. Ignoring these differences, hoping they’ll go away typically doesn’t work…and can end up as sources of frustration for both the staffing provider and their client.   If things aren’t going well,  can you count on your staffing provider to bring up the issue?  To work with you openly and honestly to find a solution?    A staffing agency who just lets you do things your way, even if “your way” isn’t working, is acting like a vendor.   A partner will make sure the issue is out on the table, discussed and a solution found that works for both parties.    

4.  How FLEXIBLE are the foundations of your relationship?  Almost by default a PARTNERSHIP is built on a platform of flexibility.  If something isn’t working, a partner will help you id it and find a solution.  If you want to try something new, a vendor will tell you why it won’t work “in their system” while a partner will make the adjustments quickly and without red tape.  Are you working with a vendor or partner? You’ll know when you ask your staffing provider to do something new or different.  

5.  Do you have SHARED GOALS?   As Webster points out, one of the defining qualities of a partnered relationship is the opportunity it provides to work together for a shared goal.  Although a vendor might appear to have the same goal, the defining moment for most vendors is only when they win – when they find the employee you want to hire.   And if it turns out that their win doesn’t actually create a win for their client (the employee quits or has to be terminated because they aren’t the right fit), so be it.  For a partner, the only success that matters is when there is a win for both themselves and their client.

One of the worst “norms” in recruiting industry happen when one of those big fees are earned (by a vendor) when they place a candidate into a role BUT the candidate leaves that job after only a short period – a big loss for the client. While the argument that the client is paying their vendor for the service not the candidate, might be true, when those services don’t deliver value to the business, it’s pretty hard to justify the fees paid without refund or recourse.  To find out if you’re working with a partner or a vendor, ask your staffing provider to describe their “service guarantee”.   

6. Who gets BLAMED when things go wrong?  When something goes wrong, its easy to blame the vendor.  In fact, that’s what vendors are for – to be the reason why some misguided direction or process didn’t work.  A partner, on the other hand, will not only be quick to identify their role in an issue, but will escalate the problem to a level where it can be talked about, root issues identified, and solutions found.  Reality is messy.  Partners don’t go away when the going gets tough, but gather up the people needed to clean up the mess and prevent more messes in the future.        

7. How is your staffing provider resourced to INNOVATE – to be CREATIVE?   It goes without saying that vendors are happiest when they can do things their way and the customer just agrees to go along.   You either buy into their cookie cutter service model, their pricing agreement, or look for another vendor.  Partners, on the other end are endlessly creative about how results can be delivered.  Their solutions are anything but cookie cutter.   They jump out of rather than into boxes.  Partners use their expertise to deliver the results their customer/partners need.    

 8.  How often do you experience “WHATEVER IT TAKES”?  One of the ways to know what kind of relationship you have with your staffing provider is when you have a business challenge and your staffing provider has to provide the solution.  How willing are they to go that extra mile – to do “whatever it takes” to deliver for you.   A lot of vendors refuse the tough recruits, the difficult to execute staffing challenges, or will walk away when the going get tough (“our service agreement doesn’t cover this type of work.”)  A partner is there until the work is done, the goal achieved.  Is your staffing provider ready to deliver “whatever it takes” or are you ready and willing to fill in the gaps yourself?   

PACE Staffing Network is proud of the  business relationships we have built over the years.  We have used these 8 principles as a “test of those relationships”  to make sure that we are meeting our partner promises.   We know these are the ways we fulfill our mission – “to make a difference.”    

How we build and support relationships extends to members of our NETWORK who our agency partners we call on from time to time to help us deliver on a particularly challenging project with one of our client partners.   When recruiting gets tough, our clients rely on us to provide solutions and our NETWORK becomes the solution our clients count on us to deliver. 

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PACE Staffing Network is one of the Puget Sound’s premier staffing /recruiting agencies and has been helping Northwest employers find and hire employees based on the “right fit” for over 40 years.

A 5-time winner of the coveted ClearlyRated “Best in Staffing” designation , PACE is ranked in the top 2% of staffing agencies nationwide.

PACE services include temporary and contract staffing, temp to hire auditions, direct hire professional recruiting services, Employer of Record (payroll) services, and a large menu of candidate assessment services our clients can purchase a la carte.

To learn more about how partnering with PACE will make a difference to the people side of your business – how you find and hire great employees –  contact our Partner Services and Solutions team at 425-637-3312, email us or visit our website.

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