‘Cool Hand Luke’, a blockbuster motion picture, was released in 1967 – well before many of our blog followers were born. Lines from the movie are often quoted, and this is one of the most memorable.
This line occurred to me as I was catching up on the Staffing Stream blogs published by Staffing Industry Analysts. This week, a blog was posted regarding disconnects between buyer preferences (buyers list worker quality as their top priority) and staffing agency marketing messages (cost savings, risk reduction). In March, on the heels of the Executive Forum, Staffing Stream published a blog identifying the seven things that suppliers would like buyers to know. Surprisingly, six of the seven can be paraphrased as “stop pressuring us to do things that negatively impact candidate quality!”
Is it possible that the staffing agencies focus their marketing on cost reduction, reduced risks, responsiveness, and related factors because that’s what is emphasized in the Requests for Proposal (RFP) documents that they receive? Is this the natural outcome of a structure in which Procurement – primarily measured on reducing costs while minimizing risk – drives the supplier selection process, but Human Resources works with the suppliers on a daily basis, fielding the complaints from line managers who are dissatisfied with the quality of candidates.
Business relationships can only work when all parties achieve their objectives. This means, the suppliers must make a profit while the buyers must avoid paying excessive rates. But financial success is only one factor to be considered. As the MSP and VMS provider for many clients, we have found that effective, continuous communication is required if all parties are to achieve their goals.
For the buyer, communication should begin before the RFP creation process starts. If the end goal is to achieve enterprise-wide visibility and control, then you have to start with representatives from all of the groups within your enterprise that will be affected. Expression of issues and concerns should be encouraged. If they don’t surface now, they will creep up on you later, resulting in low rates of user participation, or programs that meet all of the established Service Level Agreement metrics yet fail to meet your original objective. Agree on no more than three contingent workforce goals to be achieved in the first year, and build the RFP around them. Proposals that attempt to address every possible aspect of contingent staffing result in long, tedious responses. The review team will quickly figure out that responses to many questions do not impact your selection. Save those for the short listed vendors.
When the RFP is issued, provide as much detail regarding your current and planned use of contingent workers as possible. Without knowing the number of anticipated workers for each required skill, or the locations where the work will be conducted, suppliers are forced to err on the side of caution – usually resulting in higher costs.
If you anticipate an upcoming hiring surge for any reason, let the suppliers know so that they can build a talent pool. Develop detailed job descriptions that accurately portray the type of person you are looking for in terms of skills, experience, and work style. And, when reviewing candidates, provide feedback so that the suppliers can seek ‘best fit’ individuals.
Communication is a two-way street. Suppliers need to provide feedback to buyers regarding challenges in filling a position. Is the skill not available in that area? Is the role priced inappropriately? Many suppliers will simply choose to not submit candidates for low margin, hard to fill positions.
Many companies do not have the internal bandwidth to devote to the level of communication needed to create a high performing contingent workforce supply base. Managed Services Providers (MSP), deploying innovative vendor management systems (VMS), can fill that void. The best VMS tools will maintain a library of effective job descriptions, simplify the requisition creation and distribution processes, offer market-based rates for each position, offer alternative ways to source workers for hard to fill positions, evaluate candidates for “skill and will”, facilitate online chats with suppliers to discuss requisitions, and deliver feedback to suppliers on each candidate that is presented. In a well-managed program, the MSP and the VMS vendor will start by ensuring that all client stakeholders have a voice in the program design, critical issues have been surfaced and addressed, and that everyone is on the same page in terms of program expectations and operations. The MSP team will act as the buyer’s agent in building an effective supply base, reinforce the client’s program goals, monitor the quality of workers and suppliers, and act as a liaison between the suppliers and buyers to ensure continuous two-way communication.
Periodically assess whether your program is not delivering the expected value. Include the perspectives of Human Resources, Procurement, Line Managers, IT, and Finance. Solicit input from your best and poorest suppliers. Identify areas of potential concern, and then begin the process to determine the root causes and potential solutions. Failures to communicate can be costly, but can be overcome.
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