How the Chimes Drama will change the VMS landscape

I got a call earlier from Staffing Industry Analysts asking about how I think the Chimes Drama is going to change the VMS landscape. Is it going to cause client companies to be leery of VMS?

My answer was that while there will be those who will be quick to predict the demise of VMS, the contingent workforce needs of their customers will remain the same. Fact is that VMS’s do address their clients’ need for streamlined and efficient processes. What is going to happen in Chimes’ aftermath, however, will be:

On the client side, companies will re-examine their current contracts, pinpoint vulnerabilities, address them, and come up with contingent strategies. It is a true wake up call. Did anyone really predict this? Hewlett Packard surely didn’t see this coming, and it’s tough to say that HP didn’t do its due diligence when it signed on with Chimes.

On the agency side, I predict that staffing firms are going to take a closer look at the agreements they sign. Lured by the opportunity to work with big name-brand clients such as Hewlett Packard, there are staffing firms who chose to sign unfavorable and risky terms of agreement. Some have even gone as far as changing their business models to adapt. Some outsourced recruiting efforts for their VMS clients to accommodate the low margins on these accounts and as a result, the effects of Chimes Drama will be felt not just by the third party vendors but the vendors underneath them as well. I’ve received e-mails from a couple of firms in India and the Philippines who are currently in this situation.

Again, these are my personal opinions and not my employer’s.