The staffing industry is experiencing a seismic shift. What was once the exclusive domain of Fortune 500 companies—sophisticated vendor management systems—has become accessible to mid-sized businesses and staffing agencies of all sizes. And the numbers tell a compelling story that every staffing professional needs to hear.
Here’s a statistic that should grab your attention: according to the SIA Global VMS Landscape Summary, 78% of VMS contracts signed in 2024 went to companies that had never used one before. Even more striking? A full 60% of adoption is happening in organizations spending under $10 million annually on contingent labor.
This isn’t just a trend—it’s a fundamental reshaping of how the staffing industry operates. The barriers that once kept smaller players from accessing enterprise-level technology have crumbled, and the implications for agencies and their clients are profound.
The staffing landscape has become increasingly complex and competitive. Companies routinely juggle multiple agencies, each with their own processes, timesheets, and invoicing systems. It’s a recipe for chaos that costs everyone time and money.
Think about the typical mid-sized company managing 30 or more temporary workers across multiple sites. They’re drowning in spreadsheets, chasing down timecards, reconciling invoices, and struggling to get basic visibility into their contingent workforce. Email threads stretch for miles. Errors multiply. Fill rates suffer.
Enter the modern VMS—what one industry veteran aptly called “the Marie Kondo of staffing chaos.” These systems create a single source of truth for requisitions, timekeeping, invoicing, and reporting. But unlike the complex, expensive systems of the past, today’s solutions can be implemented in weeks, not months, and at a fraction of the traditional cost.
Consider the case of a global cosmetics company managing over 1,000 contingent workers daily. After implementing a VMS, they eliminated 65+ hours of manual processing every single week. That’s not just efficiency—it’s transformation. Centralized requisitions meant faster fills. Automated timekeeping meant fewer errors. Consolidated invoicing meant cleaner financials.
But here’s where it gets interesting for staffing agencies: the benefits aren’t just for the buyers.
A regional staffing agency discovered an unexpected revenue stream through strategic VMS partnerships. By introducing four clients to a vendor-friendly VMS solution, they generated $180,000 in annual recurring revenue—regardless of whether they filled a single position. They positioned themselves not as vendors competing on price, but as strategic partners bringing solutions to the table.
There’s often confusion about the difference between a Vendor Management System (VMS) and a Managed Service Provider (MSP), and it’s crucial to understand the distinction.
An MSP runs the entire contingent workforce program. They often add layers of cost and can create distance between clients and their preferred agencies. Many staffing firms view MSPs as competitors for good reason—they can disintermediate existing relationships.
A VMS, on the other hand, is pure technology. It’s the infrastructure that makes everything run more smoothly without changing the fundamental relationships. Think of it as upgrading from paper maps to GPS—the technology enhances the journey without changing who’s driving.
Not all VMS platforms are created equal. The new generation, exemplified by companies like Simple (founded by staffing industry veterans), takes a vendor-friendly approach that’s changing the game for agencies.
Key features that matter for modern staffing programs include:
As an agency, the timing question is critical. Here are the clear signals that it’s time to bring a VMS like Simple to the conversation:
You’re losing market share. If competitors are filling positions faster or providing better visibility to clients, technology might be the differentiator you’re missing.
Safety or pay concerns are making positions unworkable. When you can’t compete for certain roles due to rate or risk issues, a VMS partnership can keep you in the game through financial incentives for the overall program.
Your client has reached critical mass. Any organization with 30+ temps, multiple locations, or multiple agency partners is ripe for VMS adoption.
You’re trying to break into a new account. Nothing says “strategic partner” like bringing technology solutions to your first meeting.
You specialize in niche placements. Even if you only fill specialized roles, participating in the broader program through VMS can create additional revenue streams.
Here’s where forward-thinking agencies are finding gold: the Simple channel partnership program that turns VMS from a threat into an opportunity.
The model is surprisingly simple. Agencies make introductions to clients who could benefit from VMS. The VMS provider handles the heavy lifting—demos, implementation, training, and ongoing support. The agency earns recurring revenue from channel incentives, creating a true win-win scenario.
This isn’t about replacing your core business. It’s about adding a strategic layer that strengthens client relationships, differentiates your agency, and creates recurring revenue. Some agencies are even using VMS platforms as the technology backbone for their own MSP operations, getting enterprise-grade technology at a fraction of the cost of building it themselves.
Here’s the uncomfortable truth: if you’re not having the VMS conversation with your clients, someone else will. And when they do, they’ll be positioned as the strategic partner while you’re seen as just another vendor.
The staffing industry has always been about relationships, and that’s not changing. What’s changing is that technology is becoming table stakes for maintaining and strengthening those relationships. Clients expect the transparency, efficiency, and control that VMS provides. Agencies that facilitate this transformation become indispensable partners rather than replaceable vendors.
The path to VMS partnership doesn’t require a technology overhaul or massive investment. For most agencies, it starts with a simple introduction. Identify one client who fits the criteria—multiple agencies, 30+ workers, multiple locations, or explicit pain around visibility and control. Make the introduction to a vendor-friendly VMS provider like Simple. Stay involved in the conversation, but let the technology experts handle the details.
The agencies winning in this new landscape aren’t necessarily the biggest or most technologically sophisticated. They’re the ones who recognize that bringing solutions—not just candidates—is what creates lasting partnerships and sustainable competitive advantage.
The democratization of VMS technology represents one of the most significant opportunities in the staffing industry today. For agencies willing to embrace it, VMS can transform from a perceived threat into a powerful differentiator that strengthens client relationships, creates new revenue streams, and positions them as strategic partners rather than transactional vendors.
The question isn’t whether VMS will become standard in mid-market staffing—that ship has sailed. The question is whether you’ll be the agency that brings this solution to your clients, or the one that watches competitors do it first.
In an industry where margins are tight and competition is fierce, can you afford not to explore the VMS opportunity? The 78% of first-time VMS buyers in 2024 suggest the market has already answered that question.
The time to act is now. Your clients are waiting for solutions. Your competitors are already moving. And the technology that once seemed out of reach is now at your fingertips. Make the introduction, start the conversation, and position yourself on the winning side of the staffing industry’s technological transformation.
Related Resources
