29 May 2019

Open v. Closed Marketplace | Contrax Blog

1 min read

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It is so refreshing to see that in the last year so many contingent labor programs are shifting away from a closed marketplace. And employing open market drivers and seeing instant results.

Open v. Closed marketplace? Do you care about contract labor service, quality and price?

So, what do we mean by open and closed?

Its simple, in an open marketplace, suppliers are open to communicate with hiring managers, understand their requirements, submit candidates at a rate that the supplier sets. All of this occurs in a highly competitive marketplace. The most important word – competitive.  We all know what true competition does; it ensures the highest service, quality and the best price consistently.  Ultimately, the best rise to the top. To round things off, you put in place a strong vendor management program 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, are punished for having any communication with the ultimate buyer of the services and must adhere to an often unrealistic and demotivating rate structure. The result is poor service & quality. Sure you might save a few dollars but at a much greater cost than the savings.

Now imagine, if you will, your companies CIO group was not allowed to work with the companies’ computer hardware suppliers and some 3rd party controlled the entire purchase process. The specs of the Hardware would end up all wrong; it may not fit with the infrastructure or the needs of the company.

Sounds ridiculous right?

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