Who Plays a Part in Building Elite Contingent Labor Programs?

In today’s marketplace many companies employ a contingent labor program to interact with their staffing suppliers. No longer are hiring managers creating the rules or providing direction to their staffing suppliers. Now staffing suppliers are being directed by an entirely new organization that is often being pulled or directed by several other organizations within the client company — procurement, human resources, MSP and/or VMS providers, hiring managers (to some degree), and other staffing suppliers — each on their own trying to influence the rules, rates, terms, and overall contingent labor program’s goals.

Instead of creating a program that is designed to make it easier for hiring managers to get the best talent, many client programs have been influenced by individuals or groups that have nothing to do with staffing. In many case these individuals don’t know what it takes to attract and retain employees, nor do they understand the skill sets/roles of the positions being filled. These individuals, mainly in procurement, are there to save the client money — whether it is buying paperclips, office chairs, or senior-level talent/labor. They are paid and often bonused on the annual cost savings for the client company — not how good the quality of the talent is or how long projects are running over due or even how many contractors have quit their job. The hiring managers are.

Human Resoources. To some degree, human resource groups have always been involved in contingent labor. They, unlike others, understand the difficulty of attracting and retaining top talent. However, HR isn’t there to support or assist staffing partners; they are there to ensure that the program’s compliance goals are matched. Today, human resources will hold staffing companies accountable to proper onboarding, sales policies, paperwork, and required documentation.

VMS/MSP. MSP and VMS partners are the newest wrinkle in contingent labor decision-making. They sell directly to the idea of “cost savings” and “process control” — both very important in a contingent labor program. When it comes to developing an elite contingent labor program, MSPs and VMSs are influencing clients more and more. And though they actually are funded by the staffing suppliers working through them, they advise the buyer on how to save money in the program. Some MSPs are starting to understand that if their staffing suppliers can’t be successful, the programs will fail — with or without annual cost savings. However, MSPs will over-sell cost savings and process to the procurement and HR groups. And in fact, a lot of hiring managers are against MSP/VMSs and sometimes are the biggest hurdle for MSPs in winning the business.

Staffing Suppliers. Last, any contingent labor program that doesn’t include staffing supplier partners in their decision making process is making the wrong decision. (Keep in mind that an MSP or VMS is NOT a staffing company.) Without knowing how a staffing supplier can be successful in your program, you can’t expect any suppliers to want to work on it. In fact, gaining insight from national, regional, AND local staffing suppliers would add even more benefit to your program as national companies sometimes lack local knowledge and can be somewhat out of touch with market conditions. We would also recommend leveraging suppliers that provide different skill sets because (despite what procurement might say) there is a difference between professional staffing services and non-professional services.

An elite contingent labor program would still seek advice and insight from HR and procurement and even MSP/VMS partners; however, I would argue that the cornerstones to any successful contingent labor program are the staffing suppliers and the hiring managers — without them, there is no program! Before you make changes to your existing program or before you sign that new MSA/staffing contract, get insight from all of the parties affected, but more important, make sure that the people affected by the program (hiring managers and suppliers) can be successful.

 

Jon Olin

Jon Olin
Jon Olin is partner and owner of Ettain Group. He can be reached at jolin (at) ettaingroup (dot) com.

Jon Olin

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