I have spent a lot of time in and around contingent workforce programs, and one conversation continues to come up: how many vendors should we really have? It sounds like a simple question, but in my view, it is often the wrong one. There is absolutely such a thing as having too many suppliers in a program. If vendors are not performing, not submitting qualified talent, or simply sitting on a supplier list without adding value, they should be evaluated. But I do not believe the goal should be to get to the smallest vendor list possible. The goal should be to get the best talent at the best overall cost.
A smaller vendor list can look better on paper. It is easy to see 20, 30, or 40 suppliers and assume there is an immediate opportunity to consolidate, negotiate deeper discounts, and make the program easier to manage. Sometimes that works, but sometimes it has the opposite effect. When you reduce the supplier pool too far, you also reduce competition. You may be giving a smaller number of vendors more volume, but that does not automatically mean they are going to provide the best candidate or the best rate. In some cases, the discount negotiated on the front end gets lost because the talent being submitted is more expensive, harder to find, or simply not as strong.
When I look at a supplier, I care much more about what they produce than how many placements they make. Did they respond when given an opportunity? Did they understand the role? Did they submit qualified candidates? Were their rates competitive? Did those candidates move forward, and did the person ultimately succeed in the role? A niche supplier that only makes a handful of placements may still be incredibly valuable if they consistently deliver talent that other vendors cannot find. At the same time, a supplier with significant spend should not automatically be considered a top performer simply because they have volume. Volume and value are not always the same thing.
I also believe competition is healthy. When suppliers know they have to earn the business, they are more likely to move quickly, sharpen their rates, and put their best recruiting resources behind a role. When the supplier pool becomes too small, some of that competitive pressure can disappear. That does not mean every position should be opened to dozens of suppliers, but it does mean programs should be thoughtful about maintaining enough competition to know they are truly seeing the best available talent at a fair market rate.
Another area where I think programs can get distracted is markup. A supplier offers a lower markup, so on paper it looks like a clear savings opportunity. But markup is only one piece of the total cost. If one supplier has a lower markup but consistently brings candidates in at the top of the bill-rate range, while another supplier can find equally qualified talent at a lower overall rate, which one is actually less expensive? The answer is not always the supplier with the lowest markup. The same applies to quality. A slightly lower rate does not create meaningful savings if the position stays open longer, the manager spends more time interviewing, or the person turns over a few months later and the process starts all over again.
There is also value in recognizing that not every vendor needs to be everything. Some suppliers are great at high-volume roles. Others have deep technical networks, regional expertise, diverse talent pools, or access to highly specialized skill sets. Trying to force every requirement through the same small group of suppliers may simplify administration, but it can also limit access to the market. Sometimes the vendor receiving a small percentage of overall spend is exactly the vendor you need for the hardest role of the year.
None of this means poor-performing vendors should stay in a program. If a supplier continually receives opportunities and does not perform, there should be accountability. Their performance should be reviewed, their access can be adjusted, and they should ultimately be removed if they are not creating value. But that decision should be based on performance, not simply because the supplier list looks too long on a spreadsheet.
Instead of asking, “How many vendors are in our program?” I think the better question is, “Are we getting the best talent at the best overall cost, and do we have enough competition to know that?” Supplier strategy should not be about hitting an arbitrary number. It should be about building a program where vendors earn the business through quality, speed, competitiveness, and results.
A smaller vendor list may look efficient, but if it limits access to talent or increases what you ultimately pay for that talent, it is not really a savings at all.
When you pour your heart into building something authentic, something rooted in partnership, transparency, and measurable impact, it is deeply rewarding to see it recognized. Koncert IT Solutions was featured in Staffing Industry Analysts’ 2025 MSP Global Landscape and Differentiators Report, a showcase highlighting the world’s most forward-thinking Managed Service Providers. To be ranked among leading MSPs […]
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