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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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The Infrastructure of Thriving MSP Programs: Building Bridges, Not Walls

So many amazing speakers at last month’s VMSA Live shared insights that continue to resonate with us. And if there was one unifying theme that bubbled to the surface, it was the emphasis on relationships. Not surprisingly, LinkedIn declared 2016 the year to focus on strengthening industry alliances -- with clients, MSP program managers and staffing partners. “This year’s report,” LinkedIn wrote at the close of 2015, “shows a common denominator between the rising trends: relationships.”

Talent management is no longer a process; it’s transforming into a workforce experience -- a series of ongoing, enterprise-wide relationships and interactions that begin at the first day of work and build with every conversation, project, task and assignment. The impact of personalization, interaction and real engagement can’t be underestimated. For that reason, the bond forged between hiring managers, MSPs and their staffing partners will become more essential than ever. The relationships they nurture will set the course for 2016 and beyond.

MSP Programs Are More Essential Than Ever

The workforce of 2015 became more nuanced, seeing new classifications of contingent talent. Hiring managers and HR leaders struggled to effectively oversee all the different types of complementary workers in their blended teams while maintaining compliance, productivity and profitability. With these shifts and complexities, more companies began relying on MSPs to optimize disparate categories of talent and, at the same time, unify the workforce, supplier base and recruiting process.

In 2016, MSPs will become more pivotal, taking on larger strategic roles and moving toward total talent management. However, even with a streamlined contingent labor program enabled by automation, success can only be achieved when all the participants operate in concert. And that means concentrating on clear communications, understanding our partners’ needs and setting goals we can attain together as a team.

The Gaps That Clients, MSPs and Staffing Suppliers Must Bridge

The presentation given at VMSA Live 2016 by vTech Solutions, a leading IT Managed Services Provider, did an exemplary job of illustrating how crucial relationships and shared responsibilities are to the success of an MSP program. More importantly, vTech took the time to point out where gaps arise.

The biggest challenges expressed by hiring managers

  • Engaging and retaining talent
  • Ensuring those workers are skilled and of high quality
  • Maintaining compliance with actual program processes in addition to labor regulations and employment classification
  • Reducing onboarding time without sacrificing acculturation and knowledge transfer

MSPs faced hurdles in these areas:

  • Gaining adoption and support for the program from corporate stakeholders
  • Preventing hiring managers and suppliers from circumventing processes
  • Receiving approval to rationalize the existing supplier base
  • Culling meaningful feedback about candidates submitted and interviewed
  • Better engaging suppliers to work on difficult requisitions

Suppliers, according to vTech, also had their share of legitimate concerns:

  • Struggling to comply with unrealistic contract terms
  • Realizing healthy margins
  • Getting clear job descriptions and position requirements to work with
  • Filling requisitions that are frequently reopened

Working Together Toward Mutual Wins

By understanding the obstacles that each player faces in the program, we can empower ourselves to collaborate and bridge those gaps. Here are a few strategies, based on vTech’s research, that can help us refresh relationships with our partners and move the program in a more productive -- and mutually beneficial -- direction.

Engaging and Retaining Quality Talent. Suppliers can help MSPs and hiring managers by taking a proactive stance on recruiting. Backfilling positions and developing virtual benches of talent who can be deployed immediately is critical, though it requires creativity and effort.

  • Collaborate with MSP and client managers to leverage the employment brand and attract the best matched candidates.
  • Consider candidate experience and satisfaction surveys for continuous improvement.
  • Conduct collaborative forecasting using people (MSPs and hiring managers) as well as people analytics (present in VMS, ERP or other HR systems).
  • Use data to anticipate gaps and gather market rate intelligence.
  • When high performing workers are coming off assignments, present them with opportunities at the client program, if applicable. These candidates are already screened and vetted.
  • Competitive pay and incentives matter. As vTech suggests, “Though cost saving is one of the top priorities of the client, raising pay of a well performing and dedicated consultant by a dollar or two after he or she has worked one or two years on a project might go a long way towards motivating the consultant.”

Maintaining Compliance. Although hosting ongoing training seminars and educational sessions for suppliers may be time-consuming, they are essential to ensuring that everyone remains abreast of regulations, rules and compliance standards. A creative way to supplement this training is to develop an online library of updated materials, so suppliers can stay informed in a more on-demand environment. The VMS can also serve as an excellent communications tool, as vTech points out: “Extensive use of technology for tracking and notification related to compliance can help significantly.”

Preventing Suppliers From Bypassing the MSP. There are still staffing suppliers out there who attempt to bypass MSP program managers for a variety of reasons. Some believe they’ll get a better deal on margins by negotiating directly with hiring managers. Others may not feel a real sense of partnership with the MSP; they seek out client managers as advocates. A no-touch program has historically presented its share of challenges, yet it can be a boon to staffing partners. One of the most effective ways to establish meaningful yet controlled access to hiring managers is through recurring supplier forums and client business reviews.

  • Design the forum to be a communications event with the purpose of conveying clear messages about business strategies, procurement needs, future directions, continuous improvement recommendations, innovations, goal attainment and more.
  • Clearly define the client’s layered strategies: program drivers, visions, future missions and forecasts.
  • As the MSP, impart your perspectives on the partnerships – how all teams can unite and work toward common ends.
  • Review lessons learned, define ongoing prerequisites for success, discuss trends and share best practices.
  • Develop a mutually agreed upon roadmap for strategic management processes.
  • Have key client representatives and stakeholders present to share their perspectives and take feedback.

In addition to supplier forums, MSPs can continue to develop bidirectional communication channels through semi-monthly or monthly status calls, bi-annual satisfaction surveys and onsite client mixers each year.

Supplier Rationalization. A completely vendor neutral approach creates the same dilution and oversaturation that inspired the need for rationalization. Vendor neutrality emphasizes performance, levels the playing field for suppliers and makes a great deal of sense in the first iteration of the MSP program -- all the players are learning one another’s capabilities and strengths. As the program matures, however, the MSP has had time to track performance and identify standout suppliers. Creating preferred distribution lists and priority tiers across categories (e.g., Professional, Technical, Engineering, Industrial, et al.), with a secondary tier for additional support, will ensure an optimized and cost-efficient program. More importantly, a tiered structure provides incentives for staffing partners to perform at their peak levels.

Getting Solid Feedback. “This burning question was raised by a supplier during another session at VMSA Live Florida,” vTech explains. “A leading MSP has recently launched a mobile app where an HM [hiring manager] has to select a rating for a particular candidate – basically a feedback at HM’s fingertips. This might not be sufficient feedback but is definitely a welcome start.” For MSPs, tracking the hiring manager’s performance in providing feedback is essential. Continuous improvement is core to an evolving MSP program. Without relevant and regular input about candidates from hiring managers, MSPs have no definitive way to measure performance and drive up the quality of submittals.

Agreeable Contract Terms for Suppliers. It too often happens that top performing yet niche suppliers end up eliminated from programs because of unrealistic contract terms or requirements. By negotiating with suppliers, rather than bargaining, MSPs can achieve better results. As vTech writes, “Make the pie bigger for a WIN-WIN scenario by adding variables and parameters for negotiation, which might just allow ways to work on some concerning terms and reach agreeable terms for both supplier and MSP/Client.”

Frank discussions with the entire supply base allow the MSP to see the obstacles from their staffing partners’ perspectives. For example, if over half the supplier population expresses concerns with a specific clause in the agreement, it’s likely unrealistic. Unlike “take it or leave it bargaining,” negotiating is an interactive process -- one that facilitates openness to change and amendments that benefit the program as a whole. Some MSPs have dedicated contract specialists to support and inform their staffing partners. This is a tremendously effective solution.

Supplier Pricing. Just as competitive wages help attract the best candidates, vTech says, supplier margins also matter: “If there is not enough margin for the supplier, there is less incentive for them to focus on quality. If the client wants to pay the lowest market rate for a consultant, how can he get the best consultant in the market?”

Most staffing supplier are compensated on the fills they achieve. Spending hours to toil away on difficult requisitions that require persuading candidates to work below market rates naturally leads to recruiters sourcing talent for other positions in the same amount of time. Regular data collection, analysis, auditing and reporting can help determine what margins are truly competitive for the suppliers with the best talent.

Relationships Define Success

MSPs Build Walls Not Bridges

When all’s said and done, transforming the engagement from a vendor-client alliance to a rich partnership will ensure the success of the MSP program for years to come. As vTech concludes, “Have an open, transparent brainstorming session between Clients, MSPs and Suppliers with their hats exchanged to share and learn about each other’s challenges and concerns.” There’s an old expression that to truly understand a person, we must walk a mile in his or her shoes. In programs where MSPs, hiring managers and staffing partners are willing to take that journey, untold rewards wait at the end of the road.

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