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White Paper




                                                                                                         T...
Preferredvendor —
         The Business Exchange Between Hiring
   Companies and Staffing Vendors Is Now Online.
A revolut...
Nevertheless, nearly the entire portfolio of services offered by these online recruitment giants still
focuses on job appl...
Leveraging Existing Behaviors
In fact, the current major players in the Job Awareness space, Hotjobs.com, Monster.com and
...
Pain Points for Hiring Companies
Hiring Companies have their own set of frustrations with the current manual process. It a...
How Preferredvendor works
Preferredvendor facilitates direct, real-time transactions between Hiring Companies and Staffing...
Benefits for Hiring Companies
                                                         and Staffing Vendors
A number of ta...
in managing their Staffing Vendor relationships. However, the challenge these systems create for a
Hiring Company’s vendor...
Everything is in place for success: The sophisticated online tool is available, the job-board style
Internet interface is ...
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  1. 1. White Paper TM The easiest way to fill jobs. Preferredvendor, Inc. A Delaware Company Copyright © Preferredvendor, Inc. All Rights Reserved 2009. Preferredvendor is a Registered Trademark of Preferredvendor, Inc.
  2. 2. Preferredvendor — The Business Exchange Between Hiring Companies and Staffing Vendors Is Now Online. A revolutionary method of online recruiting is emerging that provides powerful new online recruiting tools for Hiring Companies and Staffing Vendors. This is significant because it happens so rarely in this mainstay area of our economy. In the 1990s a revolution occurred in the recruiting/staffing industry when a few visionary entrepreneurs recognized that the power of the Internet could be tapped for recruitment purposes. From this discovery Hotjobs.com, Monster.com and Careerbuilder.com were born. However these tools are all business- to-consumer job boards focused on connecting hiring companies and individual job seekers. Not since the introduction of these major job boards has an online recruiting tool been positioned to have as significant an impact on the staffing industry as Preferredvendor has today. Preferredvendor is the first of its kind business-to-business job board focused on facilitating the busi- ness exchange between Hiring Companies and Staffing Vendors. The Current Staffing Industry Environment The worldwide market for talent acquisition and staffing is a stable growth industry that is expected to increase to $85.5 billion by 2007, with an annual growth rate of 7.7% during the period. It is anticipated that the U.S. market will increase to nearly $36.6 billion in 2007 according to the IDC forecast in the Worldwide and US Recruiting and Staffing Services Forecast 2003 -2007. There is ample evidence that a war for talent is approaching and in some cases already in progress. There will be a shortfall of 3 million workers between the projected U.S. workforce and the number of jobs required by 2016. An estimated 19% of the U.S. workforce holding executive, administrative, and managerial positions will retire in the next five years. India is expected to have a shortfall of 150,000 IT engineers and 350,000 business process staff by 2010. These are only three of many factors that will drive growth in talent acquisition and staffing services through 2011. "All areas of talent management are experiencing growth, and sourcing and contingent staffing are no exceptions," says Lisa Rowan, IDC's program manager of HR and Talent Management services. "The war for talent is reemerging,” she continues, “and employers are realizing that a high-performing workforce is the key to competitive advantage. Suppliers are responding with new strategies and offerings to help them win the battle." Despite this fast growth track, the majority of business today between Hiring Companies and Staffing Vendors is still conducted manually by phone, fax and email. Their use of the Internet is almost exclusively focused on contacting individual job seekers and collecting resumes. Certainly, the Internet extends the reach, flexibility, convenience and cost effectiveness of recruiting, while adding almost endless possibilities for customization of messages and delivery. Industry pioneers such as Monster.com and CareerBuilder.com have made this type of online recruiting into both an art and a science. It easily takes a 60-slide PowerPoint to describe the wealth of services these companies now offer, going far beyond just placing job postings online to include sophisticated resume screening, applicant tracking, retention services and virtual job fairs. 1 Copyright © Preferredvendor, Inc. All Rights Reserved 2009. Preferredvendor is a Registered Trademark of Preferredvendor, Inc.
  3. 3. Nevertheless, nearly the entire portfolio of services offered by these online recruitment giants still focuses on job applicants. They operate in a single dimension, namely the centuries-old dynamic between job seekers and companies with jobs to fill (Hiring Companies). Despite all their advanced technology, this is the same dynamic served by newspapers since the 18th century. It remains a horizontal approach, matching job seekers with open jobs. The exciting news today is the fact that a new method of online recruiting has emerged. Preferredvendor is vertical rather than horizontal, focused on business needs rather than applicants, and it harnesses the power and agility of the Internet in new ways. It is a first of its kind business-to-busi- ness job board, rather than a traditional job seeker/applicant-to-business approach. With no inten- tion of replacing standard online or print advertising, this new approach will provide a never before available alternative choice and supplement to traditional methods of employee recruitment for both Hiring Companies and Staffing Vendors. Preferredvendor The launch of Preferredvendor introduces an online recruiting tool that intends to become essential to both Hiring Companies and Staffing Vendors. Its goal is to greatly simplify hiring and placement of both permanent and temporary employees while saving time and money for Staffing Vendors and Hiring Companies alike. It will do this by taking the outdated manual business exchange between Hiring Companies and Staffing Vendors and moving it online. By design, Preferredvendor is similar to a job board because this is already established as very familiar tool in the staffing industry. Basically, Hiring Companies post jobs on Preferredvendor for which they are willing to pay a fee to a third party staffing agency or consulting firm to help them fill. What differentiates Preferredvendor from any other player in the “Job Awareness” space is the fact that this is strictly a business-to-business job board/online recruiting tool that does not seek to influence or involve job applicants themselves. Currently, Hiring Companies fill roughly 90% of their open positions using business-to-consumer job boards, employee referrals, newspaper ads, job fairs, campus recruiting and other means. Both Hiring Companies and Staffing Vendors pay job boards to post jobs and search resume databases in an attempt to identify and attract individual applicants. There are many business-to-consumer job boards, including niche boards that focus on specific industries or market segments, like healthcare. The major job boards service up to 35 different industries and market segments simultaneously. In an attempt to fill the remaining 10% of their open positions a Hiring Company will typically work directly with Staffing Vendors that supply personnel for a fee. Surprisingly, no online tool has existed until now to manage the important business exchange between Hiring Companies and Staffing Vendors. To fill this key gap in the Job Awareness space, Preferredvendor intends to become recognized as “The business-to-business job board”™. Preferredvendor has been designed to move the current manual process by which Hiring Companies and Staffing Vendors work together to a flexible online environment. This is fundamentally faster, cheaper and more beneficial for both parties, while leveraging familiar existing behaviors associated with job posting and resume searching that both Hiring Companies and Staffing Vendors already understand. 2 Copyright © Preferredvendor, Inc. All Rights Reserved 2009. Preferredvendor is a Registered Trademark of Preferredvendor, Inc.
  4. 4. Leveraging Existing Behaviors In fact, the current major players in the Job Awareness space, Hotjobs.com, Monster.com and Careerbuilder.com, have spent more than a decade conditioning Hiring Companies to post jobs online and to search resume databases. The millions of dollars these companies have invested has prepared and preconditioned the marketplace for what Preferredvendor now has to offer. In short, Preferredvendor is positioned to leverage existing behaviors of both Hiring Companies and Staffing Vendors. The only difference is that they will be communicating with each other online instead of with job seekers. The fundamental difference between Preferredvendor and these other tools is that Hotjobs.com, Monster.com and Careerbuilder.com are all business-to-consumer job boards, while Preferredvendor is a business-to-business job board. Hiring Companies using Preferredvendor will pay to post the jobs they are willing to have a Staffing Vendor to help them fill for a fee. They will also be able to search a resume database of the available candidates at Staffing Vendors and Consulting Firms nationwide. In turn, Staffing Vendors will pay to search the database of job postings from Hiring Companies and submit candidates. The staffing industry is a service-based industry in which Staffing Vendors supply Hiring Companies with employees of three types: contract, temporary and direct hires. Staffing Vendors come in all shapes and sizes, from home-based recruiters to firms with hundreds of Sales Recruiters who market their services to Hiring Companies. They all have a constant need of positions to fill, and they all face similar challenges. Pain Points for Staffing Vendors Currently Staffing Vendors find jobs to fill in a variety of ways, all of which are time consuming, frustrating and tedious manual processes. Most will look at Hiring Companies’ websites or major job boards to find recently posted jobs. If suitable new jobs can be identified, they will call the Hiring Company in an attempt to reach the appropriate hiring manager or member of the HR/ Recruiting Department to offer their assistance in filling the open position. Staffing Vendors also randomly cold call HR/Recruiting Departments within Hiring Companies in an attempt to build relationships with staff members. This requires significant time whether the Hiring Companies have a need for their services or not. These marketing efforts are also disruptive to Hiring Companies, but have always been necessary. Why? Because Staffing Vendors currently can only place candi- dates at Hiring Companies where they have relationships or are recognized as a “Preferred Vendor”. Once Staffing Vendors are recognized as Preferred Vendors in the current manual process, they may receive calls and emails from Hiring Companies. This is because Staffing Vendors on a Hiring Company’s Preferred Vendor list typically get the first opportunity to fill new jobs that have been des- ignated for Staffing Vendor fulfillment. Even when recognized as a Preferred Vendor, Staffing Vendors struggle to get timely feedback from Hiring Companies related to changes in the job descriptions/requirements. If a job is filled by another Staffing Vendor working with the same Hiring Company, their client base is typically not large enough to allow them to send their not hired, pre-screened candidates to another client for placement. 3 Copyright © Preferredvendor, Inc. All Rights Reserved 2009. Preferredvendor is a Registered Trademark of Preferredvendor, Inc.
  5. 5. Pain Points for Hiring Companies Hiring Companies have their own set of frustrations with the current manual process. It all starts with how Staffing Vendors prospect for new business, which often leads to Hiring Companies receiving dozens of calls per month from Staffing Vendors looking for new jobs to fill. This is a very inefficient process that detracts from a recruiting department’s overall productivity. Once a Hiring Company determines that they need the assistance of a third party Staffing Vendor to fill an open position, the recruiter, HR representative or hiring manager must make a phone call or send an email to each of the vendors that make up the company’s Preferred Vendor List. The Staffing Vendors on a Hiring Company’s Preferred Vendor list have either approached the Hiring Company or the Hiring Company has approached them. Various and differing fees have been negotiated and agreed upon with each vendor on a Preferred Vendor list, including different fees that have to be calculated depending on the type of employee (contract, temporary, direct hire) that is hired. Each vendor has different percentages they receive based on the agreement they have in place, and typically the fee percentage does not vary from position to position within the Hiring Company. The problem with these pre-negotiated agreements is Hiring Companies often get locked into a pre-negotiated vendor agreement that has preset fee agreements. Hiring Companies typically pay a pre-determined percentage of a candidate’s annual salary or a pre-determined mark-up on hourly workers. This is a very complex and often confusing process that becomes unnecessary with Preferredvendor’s online tool. The Preferredvendor business model cuts through this maze of tedious and costly manual interaction between Staffing Vendors and Hiring Companies with a streamlined “online clearinghouse” solution that provides numerous benefits for both groups. Because there is currently no easy way to manage Staffing Vendor relationships, Hiring Companies rely on a small number of vendors to fill their open jobs versus a large aggregate pool of vendors. Also, depending on where a job is located and how the Hiring Company’s Recruiting Department is structured, the Hiring Company may not have “Preferred Vendors” in a given area. A Hiring Company with a centralized recruiting function may not have Staffing Vendors in every local market where they have an office, and since hiring is typically done at a local level this creates a problem when assistance is need for hard-to-fill jobs. Once a job that is designated for Staffing Vendor fulfillment is distributed to the staffing vendors, if the job description, fee or status of a that job changes then the recruiter, HR representative or hiring manager must make a phone call or send an email to each of the vendors to communicate each change. When Staffing Vendors start submitting candidates to a Hiring Company, the resumes are in different formats. Often when a Hiring Company is working with multiple Staffing Vendors to fill jobs it is not uncommon for two Staffing Vendors to submit the same candidate. Finally, just like when prospecting for new business, the Staffing Vendors will hound the Hiring Companies for resume, interview and offer-related feedback. 4 Copyright © Preferredvendor, Inc. All Rights Reserved 2009. Preferredvendor is a Registered Trademark of Preferredvendor, Inc.
  6. 6. How Preferredvendor works Preferredvendor facilitates direct, real-time transactions between Hiring Companies and Staffing Vendors using a familiar online job-board format. This new online tool also provides added features designed to solve most of the daily pain points that Hiring Companies and Staffing Vendors experi- ence while working together. It achieves this by combining the functionality of an enterprise Vendor Management System (VMS) with the power and reach of a traditional job board. Because Preferredvendor’s intuitive workflow was designed by recruiting and staffing professionals, it works much like the major job boards and is very easy to use. The designers of the Preferredvendor tool have been professional recruiters themselves and they have made sure that the tool enables users to manage day-to-day activity, including a pipeline of active and inactive candidates and job postings, while delivering precise information on demand. Nevertheless, traditional interpersonal relationships are also preserved because Preferredvendor only automates the front-end delivery of candidate resumes from Staffing Vendors. As with the major job boards, resumes submitted by Staffing Vendors can be easily placed into an Applicant Tracking System (ATS) of the user’s choice. Once a Hiring Company identifies a candidate they would like to interview they still pick up the phone or send an email and the traditional process resumes. Preferredvendor does not sever relationships, HR Departments still talk directly to recruiters and both groups still cooperate to schedule interviews. The difference is that Hiring Companies and Staffing Vendors using Preferredvendor have the power to access up-to-the-minute status reports of job postings, open and closed searches, candidate submittals and more, all within a single online tool, instead of spending hours in tedious manual processes. In summary, Hiring Companies can manage their existing Staffing Vendors and, in addition, can work with an aggregate pool of leading Staffing Vendors from across all functional areas and industry segments. Hiring Companies can work with all vendors on a single, company-defined fee agreement and guarantee terms, and they can determine the fee paid on a job-by-job basis. They can also easily search resumes, post jobs, gain immediate access to an outstanding pool of active and passive candidates and control the number of responses received for each job posting. Hiring Companies are relieved of worries about Staffing Vendors submitting unsolicited or duplicate candidate resumes, and duplicate resume submittals from multiple vendors can be also eliminated. The time spent fielding inbound calls from Staffing Vendors marketing their services is greatly reduced by making hard-to-fill positions viewable in an easily accessible site available to Staffing Vendors and Consulting Firms nationwide. Staffing Vendors using Preferredvendor gain immediate access to a channel of pre-qualified busi- ness, reducing or even eliminating costly, time consuming outbound marketing and sales calls. They can search for the exact type of job postings based upon vendor-defined criteria. Staffing Vendor can instantly secure Preferred Vendor status with key Hiring Companies nationwide right online. There is never a doubt that candidate resumes are being submitted directly to the right people at Hiring Companies, and by utilizing candidate pools more effectively Staffing Vendors are able to make more placements and increase revenues by doing business with a much larger base of Hiring Companies. 5 Copyright © Preferredvendor, Inc. All Rights Reserved 2009. Preferredvendor is a Registered Trademark of Preferredvendor, Inc.
  7. 7. Benefits for Hiring Companies and Staffing Vendors A number of tangible benefits can be realized almost immediately by both Hiring Companies and Staffing Vendors utilizing Preferredvendor as a standard method of business. Hiring Companies – Work with all vendors on a single, company-defined fee agreement and guarantee terms. – Determine the fee paid on a job by job basis. – Search resumes of available candidates of Staffing Vendors and Consulting Firms. – Post jobs for existing Staffing Vendors, or a customizable pool of vendors from across all functional areas and industry segments. – Gain immediate access to an outstanding pool of active and passive candidates. – Control the number of responses received for each job posting. – Prevent Staffing Vendors from submitting unsolicited or duplicate candidate resumes. – Reduce inbound calls from Staffing Vendors marketing their services by making hard to fill positions viewable in an easily accessible site. – Eliminate duplicate resume submittals when working with multiple vendors, Staffing Vendors – Gain immediate access to a channel of pre-qualified business, reducing or even eliminating the need for, and cost associated with, outbound marketing & sales. – Search for exactly the type of job postings wanted based upon vendor-defined criteria. – Allow Hiring Companies to search the available candidates of Staffing Vendors and Consulting Firms nationwide. – Instantly secure “Preferred Vendor” status with key Hiring Companies nationwide. – Submit candidate profiles directly to the right people at Hiring Companies. – Utilize candidate pools more effectively to make more placements. – Increase revenues by doing business with a larger base of Hiring Companies. Prospects for Preferredvendor No competitor currently offers a directly equivalent service to the Preferredvendor offering. While sev- eral Staffing Exchanges, Recruiter Networks, Vendor Management Systems and Applicant Tracking Systems offer bits and pieces of what the Preferredvendor tool incorporates, none offer a complete integrated solution. Staffing Exchanges and Recruiter Networks are typically designed to bring Hiring Companies and Staffing Vendors together, but are not designed to solve the business problems and handle the difficult nuances that Hiring Companies and Staffing Vendors often face when working together. Vendor Management Systems (VMS) are typically enterprise applications that are designed for Hiring Companies that are hiring hundreds of contract employees per year, and very few handle direct hires. Applicant tracking Systems (ATS) with Vendor Modules are also designed to assist Hiring Companies 6 Copyright © Preferredvendor, Inc. All Rights Reserved 2009. Preferredvendor is a Registered Trademark of Preferredvendor, Inc.
  8. 8. in managing their Staffing Vendor relationships. However, the challenge these systems create for a Hiring Company’s vendors is that their systems/modules are designed to manage “one-to-many” relationships. As result Staffing Vendors find themselves working with a confusing number of differing Vendor Management Systems in attempting to work with all of their clients. On the other hand, Preferredvendor is an online recruiting tool specifically designed for Hiring Companies and Staffing Vendors of all sizes and enables them to handle “many-to-many” relationships. While using Preferredvendor, a Staffing Vendor can work with hundreds of Hiring Companies, and a Hiring Company can leverage an aggregate pool of Staffing Vendors. This makes it possible for both groups to fill positions faster and with less potential confusion or miscommunication. Specifically, there is no other commercially available online recruiting tool that manages the day-to-day activity or the complex rules of the business exchange between Hiring Companies and Staffing Vendors. Therefore, Preferredvendor has reasonable expectations of quickly becoming the leading online recruiting/vendor management tool in this space by offering corporate recruiters a never-before- available, comprehensive tool that can handle the entire range of their diverse vendor management needs. Over time, Preferredvendor will replace the outdated manual process that Hiring Companies and Staffing Vendors must currently use to work together. Preferredvendor will create the same beneficial buffer and interface between Hiring Companies and Staffing Vendors that the major job boards have already created between Hiring Companies and individual job seekers. Preferredvendor will allow Hiring Companies to control the costs associated with Staffing Vendors by allowing them to determine the fee that they are willing to pay a vendor on a job-by-job basis. This is an entirely new concept that benefits both parties. Furthermore, Preferredvendor will eliminate the need for individual vendor agreements because when a Staffing Vendor submits a candidate’s resume to a Hiring Company’s job posting, the vendor agrees to the fee specified on the job posting and the fee agreement and guarantee terms outlined in the Hiring Company’s profile. Hiring Companies will be able to control which Staffing Vendors see their job postings by choosing to make their job postings available only to their primary and secondary vendors or to the general pool where all the Staffing Vendors nationwide using Preferredvendor will have access to the jobs. This ability to leverage an aggregate pool of Staffing Vendors should allow positions to be filled faster. Hiring Companies will also be able control the number of responses they receive for each job posting because the company can select the total number of responses they want per posting, as well as the number of responses they will accept from each Staffing Vendor/recruiter. The Time Is Right for a New Online Recruiting Vertical The time has arrived for the talent acquisition and staffing industry to benefit directly from the shift other industries have already made to online business-to-business relationship management tools. That shift is being enabled by the unique design and benefits of Preferredvendor For the first time, a flexible business-to-business solution is being brought to a critical economic area that has been hampered by costly, frustrating and time consuming manual processes for too long. It will no longer be necessary for the talent acquisition and staffing industry to continue operating with mid-20th cen- tury telephonic cold calling and paper-based limitations! 7 Copyright © Preferredvendor, Inc. All Rights Reserved 2009. Preferredvendor is a Registered Trademark of Preferredvendor, Inc.
  9. 9. Everything is in place for success: The sophisticated online tool is available, the job-board style Internet interface is familiar to all players in the recruiting space and hiring managers are pre-disposed to streamlined relationship management processes. All that has been missing, for both Hiring Companies and Staffing Vendors, is a comprehensive online tool that integrates all the features and tools that both parties require to save time, cut costs and boost their mutual productivity. With the arrival of Preferredvendor, a business-to-business tool has emerged that delivers the power to take this segment of the online recruiting to the next stage, while becoming the dominant proto- col of how Hiring Companies and Staffing Vendor work profitably together. Preferredvendor, Inc. •2300 M Street • Suite 800 • Washington, DC 20037 ph: 800-959-3812 • fax: 800-959-3816 8 Copyright © Preferredvendor, Inc. All Rights Reserved 2009. Preferredvendor is a Registered Trademark of Preferredvendor, Inc.

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