Part of what makes a Managed Staffing Provider program so successful are the suppliers responsible for sourcing talent into your organization. Think of suppliers as the veins pumping talent into the body of the organization. But when this relationship is managed exclusively by the Managed Service Provider, how do objectively evaluate talent supply chains?
Organizations have the option to either self-manage their contingent workforce (CW) program or outsource it to a Managed Service Provider, or MSP. For companies who chose to engage a MSP, the initial benefits of centralizing this robust hiring process typical serve two main purposes:
- HR will typically push for a MSP program when there is an exceedingly high number of or difficult-to-fill positions exclusively for contingent workers, a lack of resources to meet hiring demand or a combination of the two.
- Procurement is views the MSP as a means to control cost and supplier management.
Once the decision is made to bring on a MSP provider, it’s understood that they will be responsible for the total management of the CW program. From supplier management to talent supply to overall reporting of the program, the MSP acts as the central nervous system of the organization’s contingent workforce population.
Zeroing in on the supplier end, it’s who the MSP calls on that will ultimately be responsible for filling positions at your organization. In essence, you can argue that you’re not as good as your Managed Services Provider, but their supplier base.
Talent Supply Chain Management
As the VP of National Accounts for Yoh, an exclusive talent supply-based division, I see a new best practice emerging for organizations utilizing an MSP program or considering engaging in one. A vital question to ask the MSP provider is not about its track record sourcing and filling talent demands, but who on its preferred vendor list is filling the most positions. Understanding how to navigate what can be turbulant times is important in order to stay on top.
A Shift in Talent Supply & Demand
In the MSP and talent supplier relationship, there is a growing shift in governance. Previously operating in silos, today’s most successful MSP programs stem from a reciprocating line of communication.
As a national supplier of talent, Yoh provides top talent to both our own MSP programs as well as third-party MSP providers. While it may seem counterintuitive for one staffing agency to partner with another, the reality is, there are only so many good candidates out there. When both the supplier and the MSP provider are acting in the best interest of the client, it isn’t necessarily important as to where the candidate came from.
While we’d like to think this revelation was the act of good business, there are two words that can summarize the shift in the MSP and supplier relationship: Big Data. Suppliers are responsible for providing the MSP (and in turn, the client) with critical HR insights and analytics, such as fill ratio and submittal to hire. However, many suppliers are operating blind when it comes to benchmarking their performance over other suppliers. As a result, the weakest suppliers are slowly starting to dwindle off of the MSP account, and those who produce time-and-time again, are the last suppliers standing.
A New MSP Model
The MSP model used to look something like this. Multiple suppliers of varying sizes all competing to get their talent into the hands of the MSP. Based on a number of factors, including hire rate, feedback, and candidate qualifications, the MSP chooses the candidate best suited for the position.
While not common practice, we are starting to see a shift in the number of suppliers brought in by the MSP provider. With the advent of data-based metrics, suppliers are quickly realizing the margin of error for selecting the wrong candidate isn’t going unnoticed. Sophisticated suppliers are showing their value by reporting on an increased number of complex metrics. While time-to-fill and hire ratio are standard metrics, new indexes such as score card ratings, a unique rating based on candidate feedback, and job order prioritization are evolving into day-to-day conversation. As a result, the MSP supply management model is beginning to shrink.
Now, I’d be remiss if I didn’t mention vendor neutrality while we are on the topic of managed staffing solutions. The notion of vendor neutrality was once a hot topic. While many HR and procurement professionals have made peace with it, there are some critics that continue to argue this.
If the MSP is the program manager and a supplier, then why wouldn’t it unfairly weight its candidates to benefit its own bottom-line? While unethical, that philosophy might have held true in the past, but this new principle of evidence-based facts is sure to weed out poorly performing suppliers.
With more than 20 years of experience in sales and management, Sean Trimble serves as the Vice President of National Accounts. In this portfolio of strategic accounts, Yoh acts as a vendor through our clients’ Managed Service Programs. His diverse team of National Account Managers, specified Service Delivery Teams and a world class National Recruiting Network is dedicated to providing extraordinary customer care both to the Managed Staffing Programs and to Yoh consultants supporting contract labor needs and fulfillment projects.