The retirement of large numbers of baby boomers and the emergence of new technologies has created a big void in the talent sphere. With MSPs under constant pressure to deliver quality talent at competitive rates in a shorter submission time, breakthrough results can only come from innovative suppliers who are ready to move with the times.
Suppliers – A CW Program’s Best Friend and Worst Enemy
Many of the metrics that determine the success of any MSP program depend directly on the performance of their supplier base. According to a survey by Staffing Industry Analysts, these are some of the metrics that determine the success of a contingent workforce program.
Source – Staffing Industry Analysts
MSP managers must ensure that the suppliers in their base are continuously improving the above metrics. While a network of reliable suppliers assures access to top talent, mediocre or ineffective suppliers can pose a big threat to the success of a contingent workforce programs. The big question is how can MSPs steer away from the average supplier, and what all factors should they take into consideration when evaluating new suppliers.
The Traditional Supplier Evaluation Process
Most companies ask suppliers to engage in a RFI/RFP process to understand their technical acumen and pricing competitiveness. This process helps them ascertain a supplier’s capabilities with regard to the various metrics. This is generally followed by a one-on-one call and the formulating the terms of agreement before the final on-boarding takes place.
While the responses provided by every supplier indicate their level of competency, MSPs should also consider some other factors to ensure that only the best suppliers make it to the final stage of evaluation.
Differentiators that MSPs Should Consider When Evaluating a Supplier
1. Product Demo: Before you make the final call make sure you ask them for a product demo of their proprietary tools to get an insight into their technological expertise. It could be products for sourcing excellence, screening effectiveness or onboarding framework. This will give you an idea of their level of technical competency.
2. R&D Setup and Investment in Innovation: With the talent setup becoming more competitive by the day, only suppliers who are willing to go beyond the traditional sourcing and screening mechanisms will stay effective. Ask what investment they have made towards research and development, how many innovations have created within the last 5 years. What processes do they have in place for niche skills and remote location hiring?
3. Future Readiness: How can the supplier help you attain your vision for the future. Many times, we select the supplier just on the basis of the program’s pricing, geographical, and talent requirements. But it’s equally important to take the scalability quotient into the picture. What plans does the supplier have to meet the talent crunch in the future, how can he contribute towards a much better-optimized workforce, how can he ensure significant cost savings, what plans does he have to retain top performers.
4. Technical Review: This is an important consideration for execution. How will the integration with the supplier’s platforms be handled? What is the security and confidentiality check assured by the supplier? What is the mechanism followed in case of data breach or virus outbreak?
Clarity and Articulation: The Key to Evaluating a Supplier
It is important for MSPs to articulate their requirements well to the staffing suppliers and that needs robust planning on their part. Depending on the complexity of the CW program, MSPs should conduct a full gap analysis and ask themselves these questions:
– How is the program structured?
– Current supplier numbers and performance
– What should the program include in the future to ensure scalability?
– Is supplier rationalization on the cards?
– What kind of functionality would be required in the VMS?
– Geographical and niche skills considerations
Only when the MSP is clear about these points will it be able to request more concise information from the suppliers. Remember information tailored to your requirements always helps when it comes to choosing the right supplier.
Not just High Performers…But Future-ready Strategic Partners
In the current market situation, MSPs are not just looking for high performing suppliers with great KPI rankings, but suppliers who can also serve some kind of strategic purpose. They are looking for suppliers who can assess their needs, address scalability issues, and prepare a roadmap for future challenges.
How are the Top Suppliers Preparing for the Future?
These are just some of the qualities that the best suppliers in the business are incorporating into their recruiting methodology.
Data-Driven Recruiting: Nearly all major suppliers are using data-driven recruiting to complement their recruiting efforts. Using technologies and tools to analyze large pools of data, these suppliers are able to zero-in on the right trends that could help them hire better. For instance, this data could be used to zero in on the right sourcing channels for a particular skill set, find employees that match the organization’s culture, increase the quality of hire by tracking the qualified applicants per requisition and much more.
Workforce Consulting: The best in the business understand the importance of not just the present but also the future. That is why we see a surge in the hiring for analytics, data science, and technology professionals from all top suppliers. The focus is on building teams that can help you prepare for the future. Using tailored algorithms these teams can help your firm in predicting the skill requirements for the future, which jobs will be in high demand, which employees are most likely to leave, industry-insights and much more.
Market Intelligence: Is your supplier aware of the impact of emerging technologies on the IT and Banking sector, does he have tie-up with schools and universities for healthcare candidates, does he know about the impact of supply chain digitization on Logistics? On recruiting front is he aware of the use of AI and analytics in recruiting, is he still using age-old parsing algorithms for screening, does he use the right pay rates benchmarking tools to categorize salary structures. Only those suppliers who take the global trends in their stride and rely on the latest technology can provide you with the market intelligence you deserve.
New-age Sourcing Tools: In the coming years traditional sourcing channels like job boards and social media will definitely lose sheen. Is your supplier willing to go beyond the traditional? Is he investing in research and development? Does he have specialized teams for every skill-set? Some of the new technologies that are being used by the best suppliers are crowdsourcing platforms, AI-based recruitment marketplaces, ML algorithms-based screening, app-based referral programs, and much more.
Training Programs: A good supplier not only offers customized training programs for its consultants (career progression, certifications etc.) but also organizes training sessions for its recruiters on latest sourcing tech, communication skills, email etiquette, lead generation etc.
MSPs Don’t Need 20 Performing Suppliers….They Need 10 High-performing Suppliers
According to an analysis done by Beroe, organizations can lose anything between 25-50% of their acquired value (deferred costs, savings etc.) due to poor supplier management. Rather than having 20 suppliers who struggle to meet the client’s requirements under the stipulated time-frame, it’s always recommended to have 10 high performing suppliers.
A lean and high-performing supplier base not only allows for centralization of control and compliance with KPIs but also results in cost savings. The biggest advantage of having a lean supplier base is the ability to create separate supplier groups based on specialization and location, allowing a more focused and targeted approach. For these reasons, MSPs looking to add value to their supplier base should look beyond the hit rate, as there is more to supplier evaluation than meets the eye.
