Back in the early 2000s when I worked at a staffing agency, we were encouraged to find corporate clients without a managed service provider (MSP) in place – and circumvent the MSP when it was in place. Management believed low-margin MSP programs would eventually fail to meet the clients’ need for hiring quality candidates. Then we would swoop in and nab the high-margin, low-competition business and happy days would be here again.
Clearly, that dream has evaporated. More than $100 billion in contingent worker spend flows through MSP programs, and the number is growing. Staffing Industry Analysts projected that by 2020, all Fortune 2000 companies will incorporate an MSP as a critical component of their contingent workforce management program. An increasing number of companies are beginning to understand that MSPs offer a compelling combination of cost savings, greater access to talent, transparency, and risk mitigation. Staffing companies that choose to avoid MSPs will find their potential for growth severely curtailed.
An effective MSP program can benefit all three parties involved – the corporate client, an MSP, and the vendor – allowing each to focus on their core competencies. However, having worked on both sides of the vendor/vendor manager relationship, I perceive that all too often one of three parties is not given sufficient regard. The United States has seen employment grow every month since October 2010 and the unemployment rate currently stands at 4.9% (2.5% for college educated adults) so the competition for talent is in full force. As a result, clients depend on their staffing suppliers to identify the most qualified candidates at a competitive rate. Despite this reality, I continue to encounter MSP’s or procurement professionals who convey a clear message thatvendor partners do not providevalue. Vendors are asked to accept low-margin, unresponsive MSP teams and unreasonable contract terms.
If you are the MSP, how do you keep your vendors committed and engaged? It’s not that complicated. In my experience, there are three keys to productive vendor partnerships:
Insist on Job Descriptions That Recruiters Can Use. Don’t accept a two line job description, or a description that is simply a laundry list of skills. Remember, vendors have to sell your client’s job to the candidate on the other end of the phone. What is the project? Why is the client undertaking the project? How does the team fit in with the company as a whole? And what attributes and experiences would help a candidate be successful, beyond the pure skills required?
Set Service Level Agreements (SLA’s)for Client Feedback. You have SLAs. Your vendors probably have SLAs. Why shouldn’t client hiring managers have SLAs? At PrideOne we set clear expectations for how quickly managers need to respond to resumes and provide feedback on interviews. Feedback is the oxygen of any contingent labor program – without it, vendor interest in recruiting for your requisitions will die.
Know You’re Not the Only Client. When dealing with your staffing vendors, remember: You are not their only client. Every day when a recruiter comes to work, he or she makes a decision about how to spend their most valuable resource: their time. You want your clientto be on that list. Therefore, show your appreciation for the staffing vendors by returning their phone calls and emails, soliciting their suggestions about difficult requisitions, providing as much feedback as possible, and being their advocate to the client (just as you are the client’s advocate to the vendors).
MSPs are not going away. But MSPs and staffing vendors can have mutually rewarding relationships if each side approaches the partnership with respect for the value provided by both sides.