In the world of external hiring, finding the right professional is just one side of the story. Equally important is the way that professional is hired. Because behind every hourly rate, there is a chain of parties – from suppliers to brokers – all playing a role in the arrangement. And it is in this chain that a risk lies: margin stacking.
Margin stacking occurs when multiple links in the chain each add their margin to the rate of a professional. The result? The final costs for the client increase, while the professional ends up with less. This is not only inefficient but also undesirable from the perspective of legality and transparency.
What is chain transparency?
Chain transparency means that all parties involved in the hiring chain provide insight into their role, rate structure, and margins. It is a way to gain control over the cost structure, manage risks, and ensure fair remuneration. Transparency ensures that every euro spent truly adds value.
A transparent chain begins with limiting the number of links. Ideally, there are a maximum of three parties involved: the client, the intermediary (or MSP), and the supplier or freelancer. Each additional link increases the risk of ambiguity, delay, and extra costs.
How do you ensure chain transparency?
An effective approach consists of three elements:
- Insight into the chain structure
Each supplier and freelancer provides a chain statement in which the role, rate structure, and margins per link are recorded. This document is signed by all parties involved and included in the hiring dossier. This creates a complete and verifiable overview of the chain. - Transparent communication
Recruitment consultants conduct an intake for each request in which rate bands are aligned. During the pre-selection, the proposed rate is assessed against the agreed frameworks and the market. In the event of discrepancies, a substantiated discussion follows with the supplier or freelancer, supported by current benchmark data. - Monitoring and reporting
Through dashboards and reports, the chain is continuously monitored. Deviations are identified and discussed with the client. This keeps the chain not only transparent but also agile and focused on improvement.
The benefits of a transparent supply chain
A transparent supply chain brings multiple benefits: professionals are rewarded fairly and in line with the market, without unnecessary intermediary margins. Procurement always complies with the applicable laws and regulations. Suppliers and professionals know exactly where they stand, fostering trust and making them feel taken seriously. At the same time, clients retain control over their expenses and can make informed decisions.
From compliance to culture
Supply chain transparency is more than a compliance tool. It is a way of working that contributes to a healthy, sustainable labour market. By being open about rates and roles, a culture of trust and collaboration is created. And that is exactly what's needed in a market where talent is scarce and the pressure on legitimacy is increasing. Supply chain transparency makes a difference in external talent management. It prevents margin stacking, strengthens relationships, and guarantees the lawful and fair use of professionals. A transparent supply chain is the silent force behind successful procurement.
See also
How to become a preferred client in a competitive labour market
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