What Suppliers Must Know about Footloose Buyers | DCR Workforce Blog

What Suppliers Must Know about Footloose Buyers

Organizations today understand that a strong supply chain for procuring temporary workers allows them to focus on core business goals, confident that they will have the needed resources to get the job done.  So, it comes as a surprise to find that a recent survey by Staffing Industry Analysts indicates that 85% of buyers prefer to experiment with new suppliers.. This news is definitely not designed to please the old suppliers! But then, it is all about healthy competition, and instead of complaining or crying foul, let the suppliers step back and take a good look at what they are offering the buyers, and why a buyer would want to shop elsewhere.

Buyers have always wanted quality service offerings at the lowest possible prices.  The question is, what is meant by “quality service offerings”?  When it comes to using temporary labor, the answer to that question lies in a deeper understanding of who the buyer is.

In most companies, the task of building an effective supply chain for temp labor is a team effort.  The process is frequently driven by a Purchasing agent who primarily is measured on minimizing cost.  That’s a bit of an overstatement as they do worry about other issues but not really far off.  Human Resources has a seat at the table, as internal hiring managers look to HR to provide the personnel needed for key projects and initiatives.  Finance and Legal have a voice, as the company’s legal and financial interests must be protected.  If a company has outsourced responsibility for contingent workforce management to a Managed Services Provider (MSP), the MSP may in fact be the one selecting suppliers, negotiating terms and assessing supplier performance.

Since each representative of the team has differing priorities and a different notion of operational efficiency and effectiveness, the definition of “quality service offering” must evolve.

  • It is easy to promise the moon to someone, but the devil is in the delivery. A supplier, who has to look for specialized skills in a market where talent is scarce must be prepared to provide objective, market-driven evidence of location-specific supply and demand so that all parties have common, realistic expectations as to the time and cost of sourcing each skill type.
  • Buyers also want the suppliers to protect them from the risk of violating regulatory requirements.  The expected task list of suppliers goes beyond sourcing talent to qualifying, screening, properly onboarding, managing performance and offboarding.
  • Buyers also want to be protected from the suppliers themselves. Agencies must carry the proper insurance, and be licensed to conduct business in each market.  To avoid challenges of misclassification by the supplier, the buyer must see evidence that they supplier is simultaneously servicing other clients.
  • Buyers benefit from suppliers who put in the effort to understand their organizational culture and business goals so as to recruit candidates who truly meet their requirements.
  • Buyers expect suppliers to stand behind their work.  Stuff happens.  When an agency-supplied contract worker isn’t a good fit, the supplier must be prepared to rapidly provide a suitable replacement.  Some financial relief may also be appropriate.
  • Any buyer will tell you that “bait and switch” is high on their list of pet peeves.  They do not appreciate hidden costs, or candidate submissions whose target compensation exceeds the rate card.
  • Suppliers whose back-office processes are shoddy and ineffective could quickly lose buyer interest, even if their performance is reasonably satisfactory in all other respects.
  • Buyers want suppliers who have the financial strength to assure them of a long term relationship. The industry has already suffered through the pain of bankrupt suppliers who walk away without paying workers, and no buyer wants to repeat that experience.

No one can be perfect, and staffing firms and their buyers are definitely no exception to this rule. When suppliers misrepresent their own capabilities or buyers fail to adequately articulate their requirements and their performance objectives, or when both fail to establish an effective communication process or conflict resolution mechanism to build a harmonious and balanced working relationship; the relationship will break down half-way instead of growing from strength to strength.

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.