The Upsides to Upgrading Supplier Management

New technologies are often greeted with a touch of hysteria. When the telephone first arrived, people feared it might “attract evil spirits…”. With trains, people feared humans could not travel at such high speeds without melting away.

In the staffing industry, extreme caution — rather than evil spirits or high speed — is often what delays technology adoption. We see it here at iLabor, as we work with global staffing firms and human capital organizations to introduce secondary supplier management best practices and technologies. What do staffing firms fear they will lose if they streamline and automate their manual supplier management processes? Control and established relationships. Won’t automation hurt the relationships I’ve built with my suppliers? If I don’t write the requisition, how will my supplier understand what I need?

While resistance to change is a human condition, it can also be a roadblock for business growth. As the competition for talent continues to grow, staffing firms can no longer scrape by with inefficient or insufficient talent supply chains. Third-party suppliers are now an essential talent source for staffing businesses both large and small, specialized and general. How a staffing firm manages those suppliers has a material effect on business success. In supplier management today, there is a price you pay for staying with low-tech approaches and big benefits for advancing your program. Let’s look at both.

The High Cost of Low Tech

Even manual, fragmented supplier management processes leverage some technology — telephones, computers, spreadsheets, etc. While using the resources and tools you already have is always a good conservation practice, low-tech approaches to communicating with and managing suppliers will cost you in several ways, such as:

  • Limited Communication and Reach. Using phone calls and emails is a tedious and time-consuming way to broadcast job requisitions to secondary talent suppliers. It’s hard to reach all the right vendors and many nooks and crannies will go unsearched. As a result many skilled candidates will be left for others to identify.
  • Lack of Program Insight. Without tools that record, measure and analyze vendor performance, how can you determine vendor or vendor management success or failure?
  • Terminal Vendor Issues. Without a means for rapidly sharing vendor issues and/or failings, poor vendor performance can have a longer and more painful impact on a staffing business.

Benefits of Advanced Supplier Management Technology
Taking best practices from global supply chain management and technologies, aggregated and automated supplier management offers staffing firms a different path and a host of new benefits, which include:

  • Highly Structured Business Process. Fractured business processes duplicate time, effort and money. With secondary supplier management technology, staffing firms gain a repeatable, optimized supplier engagement process that eliminates tedious manual work, saving costs, increasing speed and efficiency and winning internal teams more time to focus on placement and client service excellence.
  • Job Order Consistency. With automated and streamlined supplier management, job orders are standardized. All secondary suppliers receive the same detailed information at the same time, increasing the quality and speed of search results. Job order consistency also levels the playing field, giving staffing firms the chance to fairly evaluate supplier performance in order to identify those that are delivering and eliminate those that are not.
  • Click-of-a-Button Speed. Search speed is a huge advantage in today’s highly competitive market for skilled professionals and workers. With the automation of supplier management, information gets to suppliers quickly and staffing firms get candidates faster. Time once dedicated to sending out job requisitions or contacting suppliers can be re-allotted to focus on placement, onboarding and relationship building.
  • Centralized Vendor List. With a centralized vendor list that is continuously updated based on real-time supplier performance, a staffing firm is sure to engage only top-tier suppliers that deliver strong candidates.
  • Analytics & Measurement. The very same metrics clients use to measure their staffing firms performance can be applied to suppliers through supplier management systems. With time-stamped precision, staffing firms can now ensure their secondary suppliers are meeting the high standards they are held to when it comes to any performance measure, such as:
    • Time-to-fill
    • Submittal ratios
    • Coverage metrics
    • Interview-to-offer
  • Healthy Supplier Competition. Because they give suppliers access to their performance results and the ability to compare it to other vendors, supplier management systems create a healthy competitive environment. Suppliers strive to get better candidates faster in order to win more business and the staffing firm benefits as sourcing activity increases, accelerates and improves.

Trade Up on Technology and Relationships
As technology frequently teaches us, change is often for the better, even when it has us worried at the start. It is true that leveraging secondary supplier management technology will alter relationships with suppliers. Intensive direct contact with suppliers will go. However, higher quality, higher speed communications and performance metrics will replace it. As placements accelerate and improve, relationships with top suppliers will improve as will client and candidate satisfaction.

For staffing businesses, relationships (with clients, with candidates, with vendors) will always matter. When a technology like secondary supplier management is able to bolster the ever-important relationship-building capabilities of staffing firms, you know you are on to something good. You’ve found innovation that cannot be ignored.

Steve Gage

Steve Gage
Steve Gage is CIO of iLabor, a technology platform helping companies streamline their engagement and management of secondary staffing suppliers.

Steve Gage

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