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Practical Aspects of Consumption and Specification Management

May 31, 2013

We have all heard of this procurement best practice called Consumption and Specification Management (CSM). CSM is all about ‘right setting’ all details within the scope of buying goods or services to drive value for the organization.  The objective is to increase efficiencies and achieve significant cost savings without impacting the quality of a buy. When CSM is applied to the purchase of talent, the focus is on getting the right person or right skills and attributes at market competitive rates.

In the staffing scenario, a company can adopt specific, significant goals like insuring market competitive rates, creating specific/targeted job descriptions, hiring productive workers that deliver, compliance to policy, and effectively managing contracts.

I was speaking to a procurement manager, who pioneered an early CSM program. She explained to me the practical aspects of the way she and her team implemented the CSM program for hiring temporary workers.

The team first put together years of workforce data and looked at various aspects like the number of workers brought in by each of the suppliers, contract worker tenure, the amount of overtime paid, and unplanned attrition rates. As in most initiatives, they quickly discovered how difficult it was to gather and verify contingent worker data.  They then developed a business case for each of company function or department, identifying ways in which their experience could be improved without impacting the quality of candidates or speed with which the workers were being hired.

Among other things, this was achieved by undertaking the following efforts:

  • Creating job descriptions s for each skill and job, and asking the suppliers for a quicker turn-around time
  • Setting expectations and Service Level Agreements (SLAs) to drive efficiencies
  • Setting measures and required reports at regular intervals to track performance
  • Establishing company-wide policies and processes for drug and background checks
  • Defining requirements for effective onboarding and off-boarding
  • Ensuring that rate cards were based on local market conditions for each skill. It was important to pay market rates so the worker was incented to complete the term of the assignment.
  • Negotiating fully transparent, mark-up based bill rates
  •  Identifying and adjusting “out of threshold” pay rates for incumbent contract workers
  • Involving hiring managers in skill set evaluation Ensuring that suppliers communicate the organization’s culture to new hires and fully explain expectations of their assignment
  • Training hiring managers on co-employment risk – discussing the practical aspects
  • Conducted satisfaction surveys and tailored program to regions
  • Implemented the VMS, loading the requirements for various skill sets

Once established, the program was recognized as a model program by the organization which replicated it for its Europe location and found it working equally well!


Disclaimer:
The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.

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