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These Are the 3 Biggest Trends in Workforce Innovation

Keeping up with the changing world requires constant innovation — and this includes hiring. Evolving technology, the shifting generational makeup of the workforce, and a candidate-centric market[...]

February 18, 2020

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MSPs Partner With Staffing Firms For Stellar Results

The importance of a lean, consolidated supply base

MSPs often have the unenviable task of getting splintered groups within an enterprise to function in concert toward the realization of mutual aims. In short, herding cats. It’s what they do every day as the single point-of-contact between hiring managers, supplier partners and contingent talent. They are the interlocutors, the mediators, the messengers and the police. MSPs monitor rules and policies, enforcing compliance from hiring managers and staffing suppliers. MSPs facilitate the end-to-end contingent labor process from requisitioning to payment. And perhaps most importantly, MSPs manage and optimize the supply chain.

Staffing suppliers play a vital role in the ultimate success of a contingent labor solution. With the talented resources they’ve vetted, selected and nurtured, staffing suppliers are the lifeblood of any thriving MSP/VMS program. Those MSPs dedicated to building mutually rewarding partnerships with suppliers inevitably find themselves basking in praise for superior levels of customer satisfaction, cost savings, quality and service.

The rational approach

Without a rationalized and consolidated vendor management process, suppliers don’t become integrated parts of the overall implementation and program maturity strategy. This can lead to inflated costs, a wide variance in markups, inefficient use of resources, bloated or insufficient numbers of vendors, and inconsistent performance. The value of supplier consolidation comes in the form of cost avoidance, sourcing standardization, compliance, improved visibility, enhanced reporting, and substantial reductions in rogue spend. A leaner, higher performing supplier population:

  • Allows for the creation of vendor groups by specialization
  • Reduces administrative costs and time
  • Reduces overall operating costs through more effective spend monitoring
  • Enables standardized rate card controls across the supply base
  • Establishes universal terms, conditions and policies that can easily be enforced by the MSP

However, challenges with supplier rationalization can arise when the focus centers purely on the number of vendors. In situations like these, the natural tendency is to find the smallest group of suppliers that claim to staff the widest volume of categories. And the unfortunate result is dilution. Think of the old saying, “Jack of all trades, master of none.” These suppliers may be competent in filling many skills, yet aren’t exceptional in any particular one. A better approach is to create a right-sized pool of suppliers that specialize in specific job categories, regions and industries. And once an optimized supplier group has been developed -- one based on performance and capabilities -- forming long-term relationships with these staffing partners ensures prolonged success.

Long-term contracts

As most MSPs know, and hope to achieve, long-term contracts can yield tremendous benefits for their clients and their own organizations. When agreements of short duration come into play, the MSP has barely completed implementation and the initial round of cost savings before the client prepares to bid the services again. Longer term arrangements drive up the value of the program, smooth demands, facilitate innovation through continuous improvement initiatives, and allow room for better forecasting and ongoing fulfillment.

And MSPs can reap the same rewards by treating their suppliers as business partners for the long haul. Establishing long-term agreements with the top suppliers in your pool can produce stellar results for existing and new engagements.

The benefits of long-term supplier partnerships

Specialists trump generalists

For whatever reason, warehouse stores sell a lot of paintings in their home decorating aisles. However, if you’re an avid and serious art collector, you’re going to attend auctions at houses such as Christie’s or Sotheby’s rather than visit IKEA or Costco. Staffing partners who specialize in particular skill sets and job categories excel at placing the right candidates in those roles. Having honed their skills and cultivated their talent pools, they’ve mastered service delivery in core areas. And to some extent, this helps them standardize around a predictable set of services -- a process that becomes more efficient and repeatable over time. Generalists, who attempt to offer a broad array of workers, may not have the same level of competence that springs from the precision, learning experiences and repetition that specialists have developed. Instead, they may attempt to push nominally matched candidates into positions that require more than marginal fits.

Let’s face it, if you need an RIA portability specialist to support large e-commerce or data visualization applications, you want a staffing partner adept at placing professionals with expertise in existing plug-in technologies, web development and a fundamental grasp of HTML5 -- not a blogger with a moderate understanding of Flash.

Speed of delivery and attention to service

When services are specialized, they also attain a level of standardization -- which shouldn’t be confused with generalization. Staffing suppliers that offer a standardized suite of focused services are in a position to respond faster.

When you engage a specialist, you’re receiving a far greater level of expertise, streamlined processes, in-depth understanding of your objectives and needs, and personalized attention. It’s precisely for this reason that parents seek out family pediatricians rather than visit walk-in clinics. The pediatrician possesses intimate knowledge of his young patients’ medical histories, behaviors, allergies, likes and dislikes, health needs, diets and activities. These specialized doctors also foster a sense of trust and familiarity with their selective patient group. If an emergency occurs, the pediatrician responds rapidly and can more efficiently diagnose the problem and the best treatment options.

In a generalized clinic, the child will see a doctor he or she has never met before. And these medical professionals will need to spend time asking a lot questions, trying to locate medical records, determining the causes of symptoms without historical insight, and finding the most expedient resolution so they can move on to the roomful of other patients waiting in the lobby.

In terms of staffing, a generalist must sometimes turn down requests or recommend them to another party. A generalist has more clients and more disparate work to juggle in terms of project management. And a harried generalist is more prone to making mistakes -- something that could ultimately cost a lot more to fix than paying the sometimes higher rates a specialist charges. In the end, there’s no guarantee of quality, speed or cost savings.

When MSPs secure specialized supplier partners in long-term contracts, they receive the complete assurance of stellar talent, with consistently superior metrics, at the most competitive rates.

Superior turnaround

Staffing partners whose practices cover specific categories and skills are not only faster to reach, they’re faster at addressing issues. As an example, XYZ Staffing has made its mark in the industry -- and your MSP program -- as the top provider of contingent legal professionals. The recruiters, sourcers and account managers are all trained to place and support legal talent. They understand every nuance of programs that require these workers, along with the needs of the talent and the expectations of MSPs. Not only that, they’ve focused their efforts on building a robust bench of active and passive candidates in those categories. If a staffing emergency occurs, such as an unexpected vacancy, this supplier has the resources and expertise to fill those positions rapidly and efficiently, with pre-qualified talent.

Stopping fires before they start

When an ongoing relationship has been established with a supplier, that partner becomes attuned to the program and the MSP’s needs, oftentimes before they arise. The best staffing suppliers constantly study data from the engagement through HR analytics -- in the VMS or other software -- to forecast requirements, identify trends and anticipate demands. During the relationship, they also gain a sense of peaks and valleys over time, and how hiring managers and MSPs react to them.

The result is a strategic mixture of perception and data-driven decision making. This level of foresight and familiarity empowers suppliers to stand in a state of readiness -- they can visualize where and when issues could arise, and then take preventative steps to quash them before they manifest.

So, for example, a supplier knows that every July seasonal help is needed for a new product roll out in a retail chain managed by the MSP. That staffing partner also knows which workers are due to come off assignment, how many workers are needed historically, how early the recruiting process should begin, the duration of onboarding, when to background screen and more. By the time the big day comes around, the talent are ready to work. The panic of the past is replaced by punctuality and preparedness.

In it for the long haul

When an MSP rationalizes and manages the supply base, it ensures continuity of service, centralization and compliance with established KPIs and SLAs. By forging long-term relationships with top suppliers, the MSP can also uncover and capitalize on cost savings opportunities, improved process efficiencies, unrivaled performance, faster turnarounds and more effective management of services spend.

For MSPs, a long-term contract with clients goes a long way to ensuring the success of both organizations. Engaging specialized, high-performing staffing suppliers with similar longevity -- as business partners, not merely vendors -- also strengthens the value of the program for the client, the MSP, the staffing firm and the talent.

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