By: Sheila Porcelli, National Sales Director at HireGenics, Inc.
Many factors and decision points are involved when an organization decides to implement an Indirect Workforce Management Program (“Program”). Although various definitions of a Program exist, it is generally understood to mean a formalized process for acquisition of contingent labor utilizing a dedicated team of talent acquisition or procurement specialists supported by a vendor management technology platform and a defined supplier network.
To develop a successful Program, an organization needs to be thorough. The following are 7 critical tasks:
1. Assign a strong and experienced procurement professional to oversee implementation and launch.
2. Secure executive sponsorship.
3. Identify all of the potential internal stakeholders and bring them into the process.
4. Design a communication plan which describes, in clear terms, the benefits of the Program and the internal process changes the Program will require.
5. Select participating or preferred suppliers and inform them that change is coming. The organization must not waiver in its resolve.
6. Choose an appropriate technology solution and potentially a Managed Service Provider (in the alternative, the Program can be managed internally).
7. Determine participating business units, and set a schedule to engage and include those units in the Program over time.
The decision to implement a Program will face headwinds from those who lack experience with a successful Program, or who have adverse interests. Hence the need for open lines of communication supported by facts.
The benefits of a successful Program are indeed compelling, including contingent workforce supplier rate normalization, hard and soft cost savings, increased visibility into spend and trends, and increased control and understanding over a significant component of the labor population. In fact, in some larger organizations it is not uncommon for more than 30% of the total workforce population to be comprised of contingent labor.
However, maintaining the benefits of a Program over time can be challenging. For example, it is not uncommon for many of the original stakeholders to move on to other responsibilities or even leave the organization, taking program knowledge and enthusiasm with them. Further, original suppliers may begin to fail to deliver as expected yet stay on the preferred supplier list; engagement managers may lose focus and use alternative sourcing methods outside the confines of the program or may self-source workers who are not managed properly; or remote locations or other divisions/departments that were originally scheduled to join the program are never actually engaged. In many of these cases, it is easy to blame a Managed Services Provider or find fault in an outdated or underutilized Vendor Management tool. However, the truth is that through proper planning and vigilance the customer can prevent the downslide.
After nearly 15 years working specifically in this industry with staffing suppliers, Managed Service Providers, and Vendor Management Solutions, here are 7 key recommendations for maintaining a successful, long-term Program:
1. Develop clear goals and establish agreed upon benchmarks for the program with the MSP, the staffing suppliers and stakeholders. Do not focus on just costs savings, but impactful operational processes that will deliver the Program’s value proposition. For example, by tiering suppliers, they can be more responsive in their specialties and not squander their recruitment resources on assignments they cannot efficiently fill. Or, the customer can develop a schedule of surveying the user community to test the overall effectiveness of the program, not just when a requirement is fulfilled.
2. Check whether benchmarks are being achieved on a regular basis. Typical benchmarks include time to respond or time to fill requirements. But, other benchmarks later in the assignment life cycle may be more impactful. Metrics that measure factors such as achievement of on-time deliverables, the number of change orders applied to an assignment, or early/unexpected terminations may provide insight into a supplier’s quality process.
3. Do not solely rely on Quarterly Business Reviews as a sole source of feedback for the Program. QBRs are a good measure of success, but not the only measure. Make sure that at least one QBR per year is an on-site event where high-level stakeholders and key vendors interact, such as the MSP and the Executive sponsor.
4. Monitor the roll out schedule (if applicable) and question delays and postponements. Dig into specifics. This could be an indicator that something is amiss and the Program is not as strong as it should be, or a vendor is not as qualified or efficient as they initially purported to be when they were trying to win the business.
5. Continue to be flexible. Too often there are blanket pronouncements that adversely affect your ability to attract good talent. Engage other partners as necessary to be sure the engagement managers have access to a critical talent pool. For example, the use of qualified independent contractors in a well-organized supplier strategy can make a significant difference in how the Program is perceived, the effectiveness of resources, and flexibility.
6. Use third party payroll services and agent of record/independent contractor compliance services. These services can be an integral part of any Program. One-off and small suppliers can be consolidated under a single service, freeing the Program staff to focus on critical staffing needs elsewhere. Consolidation can result in lower costs, contract consistency, and risk mitigation.
7. Don’t stop learning and think outside the box. For example, customers may want to utilize the experience of third party specialists to help normalize rates for self-identified independent contractors.
Legal Disclaimer – The contents of this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.