As a procurement professional, you have a lot of things on your plate. With limited time and resources available, priorities dictate that you not micro-manage your staffing suppliers. Voila! Contracting with a Managed Service Program (MSP) provider tasks someone else with the responsibilities of sourcing, hiring and managing your contingent labor workforce. On the other hand, when procured contingent labor within your organization is constantly missing the mark, who is responsible?
Getting to the bottom of your staffing supply chain can be a complicated process. On the surface, you may often find yourself asking, “Why are our staffing supplier fill rates so low?“ or “Why is it taking so long to fill a particular position?”
Many organizations opt to partner with a Managed Services Program (MSP) provider to better understand their staffing supplier relationships; including why a particular supplier isn’t maintaining or meeting a top quality performance. In a MSP, the provider is responsible for managing the staffing supplier’s day-to-day activities, working with them on continuous operational improvement, and determining where to focus the program; specifically, to discover where the greatest cost savings lie within the existing supply chain.
But, the only way the MSP provider can successfully accomplish all of the above is by maintaining an active, engaged, and therefore, happy supply chain. That’s where the experience and expertise of the MSP provider can really leveraged, versus self-managing your contingent workforce program.
Tips to Improve Talent Supply Chain Management
To help you operate like a super-efficient MSP provider, we’ve provided you with four key considerations for managing and optimizing your staffing supplier chain.
Balance the Number of Suppliers
A good MSP will strategically select the right number of staffing suppliers to create the perfect balance; where less is often more. In many instances, there is no need to have a “long tail” of suppliers diluting your spend and leverage.
For example, if your annual spend is $20M in the IT labor category and you have 10 suppliers, there is a fair opportunity for suppliers to compete for $2M or more market share. In the same example, if you have 50 suppliers, the market share drops to $400K, but in reality, what you probably end up with is a handful of suppliers with $2M+ market share and 40+ suppliers with annual revenue less than $100K (the long tail.) In the second example, you have more suppliers but significantly less engagement and supplier investment in your program.
The goal of successful contingent labor program should be to determine the right number of suppliers that facilitate a competitive procurement process. At the same time, it should meet candidate quality requirements in as short a cycle time as possible.
Recruiter Feedback is Critical
Ask any recruiter who works as a supplier in an MSP program what their number one pet peeve is and they would most likely say, “We need more feedback on our candidate submissions.” They would shout it from the rooftop if it would make a difference.
That’s because recruiters who are submitting candidates into the “black hole” are likely to become fatigued. While it’s almost impossible to provide feedback on every single submission, it’s important that your MSP provider acts as a consultant. They should provide real marketplace data to your managers at the point of request and stress the importance of feedback. When feedback is received, the recruiter is more engaged and is likely to direct the right talent with the next submission.
If a manager understands the reality of talent competition for a specific skill, they are much more likely to partner with the MSP (and the MSP with the supply chain) and provide feedback. If your MSP focuses on that partnership, the enthusiasm and quality of the submissions will increase. This will bring in better talent and faster fill rates across the board.
Streamline Supplier Responsibilities
You are paying staffing suppliers to perform one core function: fulfillment. You want to be sure you minimize supplier activity outside of this core function. Things such as the collection of account receivables, self-reporting on metrics, and forms and processes required outside of the Vendor Management System (VMS) can all take focus away.
Minimize these non-core activities by leveraging your MSP provider to do the heavy lifting. An MSP can incorporate those best practices as soon as they hit the ground running. By running your suppliers, they can use the continuous flow of data to suggest operational improvements that will save you time and money, in the long run.
A Happy Supplier = A Successful Program
How do you measure your current supply chain for their engagement level and satisfaction? One of the perks of incorporating a Managed Services Program to run your supplier program is having someone solely focused on maintaining that relationship.
To do so, the provider will run regular “voice of the supplier” surveys, keep the suppliers focused by incorporating and updating scorecards on their metrics, and schedule regular meetings to continuously keep the lines of communication open. Your MSP provider should be as transparent as your suppliers. The better they understand your needs, the better they will be at satisfying them.
As frustrated as you may be with your supply chain, you must remember that your suppliers could be just as frustrated. By not creating the proper lines of communications and setting clear expectations, it’s easy to fall into the trap of not properly engaging your suppliers. When supplier performance starts to slip, you or your MSP provider needs to set aside the time to get to the bottom of the problem. By aligning everyone with your most current needs you can assure your contingent labor program is moving in the right direction.