By Leslie Stevens-Huffman
Just a few years ago, companies set out to procure quality contingents by submitting open requisitions to a vast pool of anonymous suppliers and asking managers to cull through a bountiful slate of candidates before making a selection. But after evaluating the results of that process, companies are trimming vendor lists and boosting supplier accountability in an effort to procure top-notch workers. And even though third-party program administrators aren't going away, companies are reinitiating direct communication with staffing partners, so the message about quality doesn't get lost in the shuffle.
"Initially, companies gravitated toward vendor-neutral sourcing and third-party administration because it was a new concept, and they saw it as a way to procure top-quality contingents at the lowest price," acknowledges Jennifer Beck, senior vice president with Guidant Group. "But after reviewing several years' data, it's clear that consolidating vendors is the best way to drive quality and efficiencies, especially in today's environment."
New trends often emerge after a shift in the economic landscape. This time, companies are changing course to meet a burgeoning demand for high-quality contingents as they grapple with shrinking resources in the post-recession era.
Trend: Consolidating Vendors
After undergoing significant downsizing, line managers simply don't have time to sift through résumés and interview multiple candidates to find a qualified contingent. So strategic-minded program managers like Schindler Elevator's Andrew Plotkin reviewed performance data and concluded that the best workers were being supplied by a handful of staffing firms.
After identifying the top performers in each category, Plotkin joined many of his counterparts in narrowing his list of suppliers and giving agencies the authority and responsibility for selecting qualified contingents and paring down the number of contenders.
"Like many companies, we needed to do more with less," Plotkin explains. "We just finished a massive RFP, which asked the vendors to identify their areas of expertise while considering our specialized needs and environment. Our goal was to narrow our base of suppliers in each category and obtain customized, robust service."
It turns out that casting a wide net increased the volume of candidates, but not necessarily the quality, because many firms lacked the expertise or intimate knowledge of a company's environment to make precise matches.
The analysis also highlighted the need for agencies to assume greater responsibility for sourcing and selection to ease the burden on overtaxed line managers and stem the rise of indirect procurement costs.
Reaching out to multiple vendors also increased the cycle time for procuring contingents, according to Beck, which in some cases created a backlog of requisitions and spurred companies to re-evaluate their processes after the troubling situation caught the attention of company executives.
"Hiring managers are starting to become less concerned about vendor loyalty, because they just need quality contingents," Beck says, "while executives are concerned about the flexibility and scalability of the entire contingent workforce program, so the company can capitalize on the economic recovery."
Trend: Rewarding Suppliers
Although many companies are asking their staffing providers to prioritize contingent quality, Tom Sauer from International Paper is driving home the point by including performance standards in contracts and SLAs and "putting funds at stake."
Sauer, who is the manager of integrated disability management, awards additional business to staffing firms that satisfy the company's standards for timely order fulfillment, assignment completion and contingent performance, while laggards must rebate a percentage of revenue.
But the most original idea belongs to Plotkin, who wanted to motivate and inspire suppliers, so he took a survey to uncover their hot buttons.
"We wanted to do more than penalize poor performers -- we wanted to motivate vendors to prioritize quality by targeting our incentives," Plotkin says. "So we offered them a number of options and let them have a say in determining their reward."
Given the tight credit market and limited financing options, 85 percent of Schindler Elevator's staffing partners selected faster invoice payment over other financial incentives for meeting a pre-defined set of quality benchmarks. They also agreed to pay financial penalties or forego billing for failing to comply with basics like performing reference checks or providing qualified contingents.
Trend: Reinstituting Direct Communication and Strategic Alliances
Instead of relinquishing communication and staffing firm oversight to intermediaries, companies are reviewing data, nurturing relationships and allowing agency account managers to join the company team in order to achieve their 2011 quality initiatives.
"We have a governance process in place that calls for monthly reviews of key performance indicators," Sauer notes. "But I have a professional relationship with the account managers, and they are responsible for developing an action plan if we encounter quality issues. We conduct bi-weekly calls with all parties until things get corrected."
An open door also helps staffing firms understand a company's unique requirements and create customized sourcing, selection and onboarding processes that enhance contingent quality yet require less time and involvement from line managers. In reviewing performance data, companies found that firms that had direct access to line managers and received consistent feedback were more likely to use customized assessments, behavioral interviews or unique orientations that yielded high-quality contingents, but the process was most effective when it involved a limited number of people.
In fact, line managers are so focused on driving efficiencies and quality by streamlining the communications process that many are opting to work with recruiters who have the expertise and inventory to place temp, temp-to-hire and direct-hire candidates within a specific discipline.
Finally, the emerging trend that may have the greatest long-term impact on contingent quality is the evolution of comprehensive workforce planning. The collaborative process enables staffing firms to anticipate future needs, recruit workers proactively and entice the best and the brightest by offering them competitive pay, challenging assignments or even a possible career. Given businesses' growing dependence on flexible workers and external staffing resources, companies that plan ahead are more likely to attain their quality goals as the labor market tightens.
"The workforce planning process is quality driven, but it's also strategic because it allows companies to align qualified contingent labor with the needs of the business," Beck says.
Leslie Stevens-Huffman is a freelance writer in Southern California who has 20 years' experience in the staffing industry. She can be reached at email@example.com.