As procurement professionals (the hat, remember), we all know that relationships are crucial in ongoing supplier management. However, with companies seeking additional savings (aka, blood from a stone), leveraged spend is a solid strategy in many spend categories.
Long gone are the days when individuals could buy one-off goods or services from the sales rep who gives out really cool mugs and tickets to a hometown sports venue. Unless that rep is bringing a quality product or service at the right time and price with the mug and tickets.
Due to the nature of the services provided in staffing, putting objectivity around a very subjective commodity can be a challenge. While this is the business of people, and suppliers are not producing and delivering widgets, there are measurable performance standards that can be applied in ongoing supplier management.
Remember, selecting the right supplier ultimately impacts your bottom line. The resources you source from your supplier will play a crucial role in completing a project you are managing, or in augmenting your staff during a crucial time. Are you willing to take the risk?
I have found that the utilization of a cross-functional project team defined and managed by key stakeholders drives organizational buy-in. A cross-functional team will facilitate some level of ownership in the selection process across all lines of business.
Maintaining team momentum throughout the RFP (request for proposal) process will increase program compliance. As a result, you will experience increased visibility to spend, additional leveraged volume, and decreased overall cost.
Tommy Boy says it best: "Guy puts a fancy guarantee on a box 'cause he wants you to feel all warm and toasty inside."
But is the product inside the box a quality product just because the box says so? Is a staffing supplier going to provide you quality resources just because they guarantee it with their services?
In many cases, selection of a staffing supplier goes back to the guarantee on the box reference. It is easy to put best practices on paper. It is not as easy, in the business of people, to deliver.
When you are developing your down-select process, here are some considerations to discuss with your team.
Some quickly measured down-select criteria:
Contractual language: Due to the legal risks associated with this spend category, agreement to terms and conditions as released in the RFP Master Agreement is required.
Price: Do you want to manage a mark-up model or a not-to-exceed rate card?
Capability: Does the supplier have capability to cover all disciplines you will be sourcing across all lines of business? This allows additional leveraged spend with one supplier for more aggressive pricing.
Some detailed questions to ask about a supplier's services:
What sourcing processes are utilized by the supplier to source potential candidates?
Does the recruiting model utilized by the supplier promote both local and centralized recruiting?
What is the level of experience in the recruiting organization? Are the recruiters working the desk junior, mid-level, or senior?
How many existing contractors does the supplier have on billing by discipline? This can be listed by overall category (IT, engineering, scientific) or by specific skill (IT Java developer, process engineer, chemist).
How are the recruiters aligned -- by location, discipline, or client?
How is the account management structure going to look in support of your organization?
How does the supplier manage existing contractors?
What are the back office processes? On-boarding? Payroll/time sheets? Invoicing?
Prior to receiving this type of information from your suppliers, you should develop a matrix and determine the most crucial components (as determined by your cross-functional team), so you can attain a score for each supplier.
I hope I've provoked some interest in your organization's current buying habits and supply base. While I have only skimmed the surface, I think a thorough evaluation will result in increased quality and decreased costs. You can leverage your staffing suppliers to assist you in so many aspects of human capital management.
I've changed hats, and I'll leave you to decide if I'm a fashionista, a former procurement specialist, or a salesperson.
I don't put a guarantee on a box, and I STILL have no idea if I wear the right shoes half the time. I CAN answer your questions and assist you in your quest for better contingent labor spend management with clarity and confidence.
So, as Tommy Boy says, " ... for now, for your customer's sake, for your daughter's sake, ya might wanna think about buying a product from me."