Ensuring Supplier Engagement | DCR Workforce Blog

Ensuring Supplier Engagement

A staffing supplier’s role is very different from that of a supplier of goods.

In an earlier role, I worked for a staffing company that specialized in technical recruiting.  I sat within earshot of more than a dozen recruiters who spent every day from 8 AM to 7 PM calling IT specialists and engineers to determine their availability and interest in open positions. Inevitably, there would be one client that everyone dreaded supporting – the guy who wanted the most sought after talent at a rock bottom price.  The recruiter was faced with attempting to convince a candidate who had a choice of opportunities that he/she should take a job at below market rates.  Since recruiters are compensated on “fills”, they were certainly not motivated to spend hours working on one difficult req when they could invest that time in sourcing contract workers for two or three other positions in the same amount of time.

The situation was even more complex than that.  The Account Execs in that company were under pressure to bring in new clients, but ultimately were compensated on gross margin generated.  What this means is that if a client is paying a mark-up that leaves a slim profit margin, the Account Exec will see less in his paycheck.  In these cases, I often heard the sales managers tell their teams, “Just get the contract.  We can always choose to not fill the reqs.”

At this point, you’re thinking “I’m glad my supplier doesn’t do that.”  Well, think again.  The above example is of one of the most highly regarded staffing agencies in the industry, and the practices described are common in the industry.

The moral of this story is NOT that you must pay exorbitant rates to ensure good service.  So what is our message?

We have investigated some successful relationships and come up with the following wisdom on how successful staffing clients keep the romance alive in the relationship.

  • Pay market-based rates.  Rates vary by skill and location.  Evaluate rates at least twice annually, and focus in more frequently on hard to fill positions.  If you are using an MSP, have them do the research for you, and insist on multiple sources of data so that you can verify its accuracy.
  • Build a relationship that is based on mutual trust and understanding. Help each supplier gain complete insight into your goals and challenges and seek their inputs on the best possible ways to achieve your growth plans.  Keep in mind that, as suppliers build long-term relationships with you, their increased understanding of your business and worker preferences will result in better candidates and increased operational efficiency.
  • Brief your suppliers on upcoming projects, busy periods or other factors that create spikes in demand or quick turnaround times for filling positions.  Discuss the needed skills.   Your suppliers want to plan ahead for fulfilling them, building a talent pool of pre-qualified workers..
  • Get the supplier to focus on the results which you seek most, whether it is quality, shortened time to fill, reduction in turnover, improved cultural fit or building a strong talent pipeline using networking, social media, and alumni re-hires or campus recruitments.
  • Establish processes which allow the speedy processing of a supplier’s submissions – whether of candidates or invoices – cutting the lag time to the minimum possible levels.
  • Consider rewarding suppliers for higher performance or lower rates.  Give them first access to job orders, better rates, or other effective incentives.
  • Don’t rely on a single supplier to meet all of your needs.  Suppliers tend to be really good at sourcing a particular skill or finding resources in a particular location, but are not as strong across all locations or skill sets.  By introducing competition for the suppliers, you will see more candidates, better talent, in a shorter amount of time.
  • If you don’t have the ability or desire to manage a larger number of suppliers, consider a managed services program.  The MSP will take full responsibility for supplier management.

Genuine engagement and access to opportunities are critical to the success of a relationship with a supplier. Companies may enjoy receiving all those ‘best supplier’ awards, but the ultimate reward would always prove to be the forging of a win-win relationship which ensures the success of both the client and the supplier.

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.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.