For those of you just starting down the path of managed staffing or using more contingent labor, if you are only thinking about saving money, you might end up missing something: quality.
Since the end of last year, there seems to be more interest in managed staffing programs in general and most surveys show an increase in the use of contingent labor. A Yoh workforce trends survey earlier this year showed that 81 percent of executives surveyed said they expect their labor needs to stay the same or increase.
While this is good news, not only for staffing firms but the economy in general, I still feel a lot of this activity is related to an underlying desire to save on labor costs.
Talent is an Investment
What I am proposing is a different way of thinking about contingent labor. Or at least another perspective to consider.
Talent, even on a temporary basis, can have affect your business. And like most things, you generally get what you pay for. So when you think about your contingent labor program, especially if you have or are considering a managed staffing program, consider quality along with cost.
Today’s temporaries could be tomorrow’s employees. And there are still costs for recruiting those workers, even through a staffing company. While you may get a low rate, you may not get the quality. And think about how much more valuable that temporary resource would be if you could hire him/her directly without having to expend any more recruiting costs.
Tips and Suggestions
I know what you’re saying: “Yes, but we do need to save money.” OK, you do need to make sure the rates you pay are competitive, but there’s value in getting a better worker. Here are a few suggestions:
- Balance the need to save with your talent needs. In competitive areas you need to pay more. Don’t let a low unemployment rate fool you. There are some areas where you can be competitive with rates and lower your costs. But don’t expect to do that across all areas, geographies and industries. Be informed and find a good balance.
- Lean on your MSP or suppliers, but don’t beat them up. Any good staffing partner should be able to advise you on rates and trends, especially an MSP partner. If your only conversation with them is about markups or bill rates, you don’t have a partnership, you have a dictatorship. Pick good partners that will work with you and can justify the rates they charge. Remember, quality talent saves you money too – they finish projects, fit your culture and are good candidates for direct employees.
- Get executive buy-in and understanding. It all starts with the executive level. If they don’t understand the value of the managed staffing program and only hear “it saves us money,” that’s all they will expect. Make sure they know the value and understand that a managed program will change over time. First-year savings are usually higher than any other year, but true value often comes later with an efficient program, less burden on hiring managers and higher quality candidates.
Your future is callingThinking only of costs can be short-sighted. With contingent labor making up as much as 25 percent of a company’s workforce, there’s a lot of value (and savings) to be gained from a well-managed, quality-based, contingent labor program – now and in the future.
