Open Versus Closed Marketplaces

It is so refreshing to see so many contingent labor programs shifting away from a closed marketplace, employing open market drivers and seeing almost instant results.

What do we mean by open v. closed?

It’s simple, in an open marketplace, suppliers are open to communicate with hiring managers. They understand their requirements and submit candidates at a rate that the supplier sets. All of this occurs in a highly competitive marketplace, which ensures the highest service, quality and best price consistently. To round things off, you put a strong vendor management program in place to ensure supplier behaviors align with your objectives.

In a closed marketplace, an internal or external 3rd party controls the entire process, creating a wall between the hiring manager and their suppliers. The suppliers have a difficult time understanding the clients needs and are punished for having any communication with the ultimate buyer of the services. They also must adhere to an often unrealistic and demotivating rate structure. The result is poor service and quality that will end up being a much greater cost than the savings.  

Imagine your company's CIO group was not allowed to work with the company’s computer hardware suppliers and some 3rd party controlled the entire purchasing process. The specs of the Hardware might end up all wrong, it may not fit with the infrastructure or the needs of the company.

Sounds ridiculous, right?