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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: Strategic Allies in Business Planning Success

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” -- Abraham Lincoln

On November 6, 1860, Abraham Lincoln was elected the 16th president of the United States. When he took office, the threats of secession in the Southern states were already brewing. A year later, he found himself facing a war. Lincoln’s victory was neither assured nor easily won. In many ways, it was the result of planning and teamwork. As we celebrate President’s Day, Lincoln’s achievements in promoting civil rights will likely emerge as the major topic of discussion in our industry. However, it’s equally worthwhile to acknowledge the example he set for the importance of involving key resources, even dissenting allies, in planning critical objectives.

Although January has passed, client leadership teams are still actively engaged in formulating business strategies that will drive their organizations to new successes in 2016. Too often, though, MSPs can get overlooked in the process. Yet, they are managing one of the most vital aspects of any client business -- talent. MSPs have valuable insights, essential data and keen perspectives that can undeniably benefit client managers in mapping out their financial goals for the year. By including MSPs in annual planning efforts, clients strengthen the might of their forces in this war for talent.

The Great Emancipator Was Also The Great Planner

Lincoln was a conscientious scholar, and he immediately set out to become a student of military tactics. Eventually, he evolved into a more masterful strategist than his generals or his opponent, Jefferson Davis, president of the Confederacy. Lincoln displayed an intuitive grasp of strategic insight and shrewd planning. Yet he also took great pains to establish rapport with his cabinet and even the men who had bested him in early political races. This led to the fabled “team of rivals,” which included appointments of the three candidates he defeated to secure his nomination.

What many people may forget is that amid the turmoil of conflict and the prospective fracturing of the Union, Lincoln continued to plan for the future prosperity of the nation. As one example, he signed the Pacific Railway Act, which committed the federal government to support a transcontinental railroad. The construction of the Union Pacific and the Central Pacific railways culminated in a new era of communication, commerce and connectivity.

Like President Lincoln, client hiring managers are facing a battle across several fronts. Hiring managers are desperately seeking top talent to fill in-demand positions, yet time seems to conspire against them. Their workloads have become more demanding, they’ve been stretched thinner by lean operations that attempt to curb overhead, and they have fewer people in key positions to perform the work, which is backing up and piling higher. With the dawn of each new year, these same hiring managers must confront a fresh batch of pressing corporate responsibilities, operational goals to attain, internal staff to manage, and increasing pressure to innovate and optimize processes. MSPS -- with their resources, expertise and information -- can become an untapped goldmine for stellar business planning outcomes.

MSPs Are Instrumental to Financial Management

The primary motivation for world-class MSPs is to deliver the right talent at the right price and at the right time. Making the program equitable for all parties involved -- the client, the suppliers, and the workers themselves -- is paramount to their success. Leading MSPs balance the need to deliver the best possible talent with fiscal responsibility. They accomplish those objectives using tools such as market rate and people analytics, labor economics reports, rate controls, supplier surveys, and pulling data across all clients through business intelligence systems.

During program implementation, experienced MSPs develop a custom cost-savings measurement plan with their clients. Together, they determine the data to be measured, the sample size, the reporting frequency and the format of the data. The process becomes a comprehensive cost savings analysis in which the MSP reviews pay and invoice rates, supplier markups, various tenure policies, and discounts. The MSP also identifies the risks and countermeasures associated with implementing the various cost savings opportunities.

When budgets are created and overseen at the enterprise level, they can sometimes omit the pivotal input and participation of department hiring managers. However, this input is essential to effective planning and forecasting. Together with MSPs, hiring managers can identify upcoming expenditures or savings opportunities that may have been missed by executives too far removed from the frontline. A lot of clients recognize the amazing soft cost savings supported by MSPs; yet there are plenty of direct savings to be achieved, as well:

  • Rate standardization (bill rates, market-based pay rates, markups)
  • Locally and nationally leveraged supplier discount opportunities
  • Evaluation of supplier agreements and program structures, with recommendations for improvements culled from lessons learned across a variety of client organizations and industries
  • The introduction of supplier competition and tiering
  • Benchmarking and rate analysis for positions and the market
  • Strategic management of workforce turnover and overtime

MSPs Promote Visibility

The ability to make informed decisions based upon reliable real-world data is vital to the success of annual business planning. MSPs mandate the program across the enterprise and ensure that all contingent work is being captured in a VMS. This gives clients visibility into all aspects of the program: the overhead, the costs, demand planning and forecasting. The reporting capabilities of the VMS deliver intelligence and analytics that allow MSPs to drill down into market dynamics and then provide that insight to hiring managers. Examples include:

  • Spend by job category
  • Spend by a given location, division or department
  • Job category level breakdown of spend by supplier
  • Job category level breakdown of spend by business unit (sector, division, unique bill codes)
  • Diversity spend by supplier
  • Requisition fill times
  • Requisition trends that include peaks, valleys, spikes and seasonal demands
  • Market rate analytics to determine whether margins or pay rates are maintaining bill rates at the acceptable industry range for specific titles, locations, managers, business units or staffing partners

The datasets MSPs collect provide hiring managers with a treasure trove of information that can be used to forecast demands, usage and financial considerations for near-term and long-term planning. Through this approach, MSPs collaborate with client hiring managers to ascertain the right number of people being requested, which prevents frivolous or rogue spending -- an instrumental component in creating a meaningful and achievable plan.

MSPs Examine Market Opportunities

Budget and resource planning require a level of transparency that extends beyond the organization. It’s just as crucial to understand the external factors of the market. MSPs use a variety of methods to compiling market rate intelligence:

  • Existing data captured in the client’s current HRIS, ERP, VMS, or other database system
  • Data mining through internal databases and outside sources for specific labor statistics, cost data, and market dynamics
  • Staffing partner data specific to requested job titles and work locations

MSPs combine these data sources to create matrices with recommended rate strategies, and then determine the best rate card to support the hiring manager’s business goals. They review rates regularly to ensure that changes in market demand and statutory costs are captured. By nature of the program design and contractual agreements, MSPs can enforce adherence to these rate card controls across the supplier base.

In a larger corporate context, MSPs properly manage purchase orders (POs) to make it easier for accounting professionals to determine accrual financing needs. Increased accuracy in this area mitigates the need for clients to borrow as much money to cover short-term cash flow needs, thereby reducing finance charges.

MSPs Augment Retention

Even in outsourced contingent labor programs, retention is paramount to the success of the engagement. MSPs and their staffing partners excel at placing the best matched talent to the role, which contains costs and significantly speeds up time to productivity. There remains, however, a learning curve for new talent as they ramp up. And despite the temporary nature of complementary workers, the program’s ultimate success depends on them completing their assignments.

Through engaging and comprehensive onboarding programs, MSPs and their staffing partners substantially reduce the risk of attrition; it’s a fundamental part of their job. They have cultivated and mastered their onboarding experiences across clients, creating repeatable, continuously improving and transferable practices that enhance acculturation and retention for every organization. With a more certain and stabilized indicator of worker longevity, client hiring managers have the advantage of developing strategic plans that are less likely to encounter unexpected disruptions or gaps.

MSPs Are Genuine Business Partners, Not Just Outsourced Business Support

MSPs relieve busy hiring managers of countless administrative tasks. They facilitate requisition distribution and supplier correspondence, shortlist candidates that best match job requirements, schedule interviews, negotiate rates and handle the complete onboarding process. The positive impacts of these efforts include the timely fulfillment of exceptional talent, assistance with personnel issues, program performance monitoring, robust reporting and analytics, reduced attrition rates and more.

Yet the potential value they bring to the wider client organization should never be discounted. MSPs have access to a wealth of past experiences, data, market intelligence and business planning acumen that can strengthen the annual outcomes for client hiring managers. And by strengthening their relationships with MSPs, even when opinions or approaches differ, hiring managers can create an unstoppable cabinet of generals to secure their future victories.

As Abraham Lincoln observed before the Illinois State Capitol in 1858, when accepting the Republican nomination as senator, “A house divided against itself cannot stand.”

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