Employment business models

Hospital and emergency staff

18 / 1 / 2013 1.07pm

There are a number of options available to trusts when looking to use an employment business model. Traditionally, trusts would simply agree a contract or service level agreement (SLA) with one or more employment agencies, meaning that whenever a temporary member of staff was required, the trust would ask the agency to fill it. Recently, trusts have begun to look at more strategic approaches to managing their relationships with agencies and the following models have been developed.

When using the models outlined below, trusts should ensure they adhere to the NHS Improvement agency rules.

Neutral vendor models

A neutral vendor is, in essence, a body employed by an NHS organisation to procure temporary staff on their behalf. This organisation will not be a provider of temporary staff themselves, so in effect will provide a brokerage service to the trust and will manage relationships with a number of suppliers who have been approved by the trust in advance. These relationships with suppliers can be formed in different ways, with options available for a tiered approach (meaning that an agency appointed to 'tier 1' has first opportunity to fill any vacancies before being passed to 'tier 2' agencies) or an open bidding process.

Points for the trust to consider include the following:

  • a neutral vendor model reduces the administrative burden on the trust as all contact with agencies is handled by the vendor
  • the trust will retain control of which agencies are on the 'approved' list, meaning they will always have knowledge of where the temporary staff member is coming from
  • by having a central point of booking (via the neutral vendor), trusts will have detailed management information outlining which staff have been procured, at what price and for what reason
  • through effective contract management, prices can be agreed well in advance (including escalation rates) which can aid financial planning
  • by using a larger number of suppliers, risk to the trust can be reduced in the eventuality that one supplier fails
  • as each supplier is likely to get fewer bookings from the trust, the unit price may be higher than when a master vendor model (see below) is employed as the trust may be unable to benefit from economies of scale
  • whilst the trust may be able to sign off which agencies are on the 'approved supplier' list, they may have very little say in which agency is used to supply any individual member of staff
  • as the trust is one step further away from the direct procurement of the temporary staff member, they may have less control over which agency worker is hired.

Master vendor / managed service

A master vendor or managed service is a single contract agreement with a staffing supplier. The master vendor will have partnerships with secondary suppliers who they work with if they can't fill the vacancy themselves. In effect, this will mean that the agency appointed by the trust as a master vendor will supply all temporary staff, and whenever there is a vacancy that it cannot fill it will try to source and individual from a pre-approved list of temporary suppliers.

Points for the trust to consider:

  • using a master vendor can lead to lower rates due to the 'buying power' of the master vendor
  • by properly managing an SLA, the trust can ensure a high-quality service
  • by appointing a third party to manage the service, the administrative burden on the trust is reduced
  • most organisations offering a master vendor model are able to provide detailed management information to the trust which could assist in reducing demand for temporary staff in future
  • as there will be a single point of contact for the trust for the booking of all temporary and agency staff, the process is simplified and made significantly easier to manage
  • while the master vendor can provide detailed management information, it may not necessarily be in the supplier’s interest to help reduce the volume of external temporary staff bookings. The trust must therefore ensure that it uses the information provided as effectively as possible to reduce demand
  • as the trust is one step further away from the direct procurement of the temporary staff member, they may have less control over which agency worker is hired.

Next webpage: Recruitment business models 

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