Why It’s High Time for Supplier Enablement in Staffing

ThinkstockPhotos-994736132015 was a strong year for job growth. According to the Bureau of Labor Statistics, total U.S. employment rose by 2.45 million jobs, as unemployment fell from 5.7% in January to 5.0% in December. With this January’s unemployment rate falling to 4.9% — and holding steady in February, 2016 is on track to be another year marked by low supply and high demand for skilled talent. For staffing firms, this means that competition for talent is not abating and the search for a substantial competitive edge is on.

The good news for enterprising firms is that they don’t have to look much further than their very own talent acquisition partners (secondary suppliers) to gain a sharper, stronger competitive edge. Secondary supplier enablement offers staffing firms the opportunity to automate, accelerate, expand, improve and even monetize talent sourcing from third-party providers. With the many benefits of supplier enablement, why do the vast majority of staffing businesses remain committed to indiscriminate supplier engagement? It is a fear of losing valuable, personal relationships in addition to the limited insight they have into the advantages gained from a tech-enabled supplier base.

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Relationships Plus Technology: The Essential Combination
For years, staffing has been proudly categorized as a relationship-based industry. The skills of individuals, such as well-connected recruiters and proactive account managers, can have a strong impact on results. Over time, technology has diminished the large impact of relationships as recruiting, account management and automation tools streamline staffing information and process flows.

Time for traditional staffing relationship building (on-site visits, in-person interviews, drop-ins, etc.) is declining, while highly efficient mobile and social talent sourcing and acquisition are on the rise. Amid the most challenging competitive landscape the industry has known, long lunches and office visits can become obstacles instead of opportunities. Can staffing firms fully embrace technology and still maintain the relationships clients and candidates depend on for career and workforce support? They can. In fact, the most effective way for firms to leverage today’s myriad of talent sourcing technologies and resources is through SaaS-based supplier management with a partner that understands the value of strong relationships in staffing. Good supplier management strengthens relationships by bringing staffing firms closer to the right talent faster, which fosters satisfied clients, loyal candidates and vendors who are eager to deliver talent.

Secondary Suppliers Are Big Business for Staffing
Almost all staffing firms today rely on the support of secondary suppliers to augment sourcing and recruiting. With thousands of places online to post resumes, search jobs, network and train, these secondary sourcing experts play a critical role in rapidly finding skilled candidates. According to iLabor data and market experience, most professional staffing companies leverage more than 20% of their revenue through secondary suppliers

Despite dependence on these third-party firms, the majority of staffing companies manage suppliers in the same manner, using a hands-off approach. Most recruiters, recruiting managers and even hiring managers, tap into the secondary supplier of their choice when needs arise and in an arbitrary manner. There are no established methods, such as preferred partners, performance measures, tracking tools or reporting systems.The suppliers rarely, if ever, receive performance feedback, which leaves zero incentive for them to improve or change their processes. This is a costly oversight because loyal, informed and enabled secondary suppliers are exactly what staffing firms today need to remain competitive.

Five Advantages of Supplier Enablement
Supplier enablement, the process of digitally integrating third-party vendors into the staffing supply chain, represents a giant leap forward in the staffing delivery pipeline and offers five significant advantages:

  1. The Ability to Identify & Increase Excellence – Through supplier enablement, staffing firms can track supplier performance, including the quality of submittals, time to submit/fill and placements by skill and region. Staffing firms win because they are able to identify the best suppliers and cultivate those relationships to increase placement quality and speed. The low performers are excluded from the supply chain and high performers receive more work.
  2. Greater Loyalty through Performance Feedback– Suppliers also gain an advantage because they receive continuous real-time insight into the skill and candidate requirements of their staffing partners as well as feedback on their performance (placements versus non-placements). Secondary suppliers are generally willing to dedicate their recruitment horsepower to staffing firms that offer privileged partner access and direct performance feedback.
  3. Increased Compliance & Reduced Costs – With spending tracked through a supplier enablement solution, staffing firms can control careless supplier usage and spending. In addition, various degrees of permission and access can be granted (e.g.by supplier and/or recruiter)to better streamline relationships with sub-contractors.
  4. A Vendor Funded Solution-The secondary supplier management solution can leverage a vendor-funded model, reducing supply chain spending and the cost of acquiring talent.
  5. The Speed of Automation– Automating the information flow between staffing firms and suppliers accelerates talent sourcing, engagement and acquisition, providing staffing firms with another competitive advantage.

A Matter of Choice: Enable or Fall Behind
Knowledge and speed-to-market are vital to staffing success. Poorly informed suppliers are ineffective partners. To receive the most benefit from suppliers and their prowess at searching the vast marketplace of candidate resumes and contacts, staffing firms must make an important decision. Engage and foster reliable, proven third-party partners or take your chances with untested, unregulated suppliers whose contributions may aid or hinder the bottom line.In a market where talent is scarce and competition high, the choice is to either move forward steadfast or risk being left far behind.

MORE: Trends staffing firms should know about the contingent workforce

Jodi Hon

Jodi Hon
Jodi Hon is president of MDT Holdings and iLabor. She can be reached at jhon (at) mdtholdingsllc (dot) com.

Jodi Hon

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