CWS 3.0: August 15, 2012

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Buyer Mistakes: The No-Contact MSP Program

The world of contingent workforce management has been rapidly evolving. And the emergence of managed service programs and vendor management systems further hastened the change of pace. Buyers were able to leverage massive spend across multiple vendors and effectively negotiate unified contracts for hundreds of job categories. Some vendors developed strategies to take advantage of the coming technology wave and prospered. Others worked to circumvent these programs, creating untold headaches for CW managers trying to increase adoption and growth in their programs. Having lived through this process myself, I can tell you it was easy to decide to restrict vendor contact to the VMS technology and the MSP provider.

It made sense at the time, but that was then. While restricting access did give us the control we needed at the time, it came with a downside. The relationship element was removed from the equation, leaving suppliers essentially to fly blind while filling requisitions. Worker quality suffered and sometimes hard-won relationships suffered. The providers hated it; the hiring managers often didn’t understand it. But the procurement department was for it.

However, the no-access rule has become difficult to maintain as these programs continue to evolve. Program managers saw that the MSP often can never entirely replace the role of the hiring manager in describing exactly what was desired. Neither could the VMS technology fully capture the job requirements and replace that contact that allowed conversations and clarifications.

In the end, programs that completely eliminate the valuable one-on-one relationship between hiring manager and supplier anecdotally have poorer quality and compliance. It goes without saying that every situation is different and in some cases such a policy may make sense, but many buyers do not consider the ramifications of such a policy. It is that dogmatic commitment to a problematic policy that I am taking to task.

Last week, I wrote about the importance of partnerships between buyers and staffing suppliers. Partnership means both parties are acting in a manner that ensures everyone can be successful, and it is the contingent workforce program manager’s job to set the stage for that. While every circumstance is different and there truly is no “best practice” that applies equally to every company, no-contact policies have no place in an evolved contingent workforce program and make having those partnerships impossible.

I’m not saying that suppliers should have unfettered access to hiring managers. But they should be allowed to have controlled access with appropriate guidelines and rules. Perhaps that would be in the form of quarterly supplier visits or “get to know a hiring manager” webinars. In some programs, the hiring manager holds a conference call with multiple suppliers to discuss a requisition. There are many ways to make the solution work. All it takes is a little trust, creativity and just a little conversation.

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Brightwing

George Opitz 08/30/2012 03:36 pm

The age old adage “you get what you pay for” holds truer than ever for the direction of MSP/VMS systems and our industry. I attended the SIA Executive Forum this past March; the underlying angst about servicing large MSP/VMS accounts was unbelievable. There were a number of breakout session about changing business models and strategies to avoid being caught up in the diminishing return most quality staffing or recruiting teams get from their servicing these types of accounts.
The bottom line is that we in the staffing and recruiting industry are doing it to ourselves. Real recruiting, value driven solutions that deliver critical quality talent in a timely uncomplicated manner that helps the end user (the hiring manager) get their jobs done is the core of what any good recruiter should be delivering. The fallacy befuddling our industry around most current MSP/VMS systems is that they sell and emphasize; cost reduction and systems control as opposed to compliance, cost management and quality control that could be delivered with the technologies they introduce.
The typical MSP scenario can also greatly damage an organization’s employee brand. With little or no feedback; and constant submittals to a variety of positions within an organization, talent will eventually feel commoditized. That message and feeling eventually makes it into the market place. The reality of the typical MSP managed “staffing” systems is that over time they almost always are a drain on the caliber of talent and, therefore, the future potential of any organization.
Talent drives innovation and success in any top-performing organization. Leading organizations understand that when they are discovering and acquiring talent, it’s an investment in their future and a statement about their potential.
Finding the type of talent that can help propel a company forward requires a people-centric process -- one that allows a vendor to use their experience and insight to find the best candidate for the job. I’ve yet to find an MSP that drives a people-centered process.
Why as an industry do we continue to support this direction? Eventually (actually the capability exists now) companies can do it all through technology without any personal interface with the a recruiter or candidate if they want to drive the “cost” low enough. But is that a good investment?
I believe we all need to go back to delivering real engaged recruiting solutions to a market that is desperate for quality, skilled and aligned talent and let those that choose the discount fix to fend for themselves.


ATR International

Jerry Brenholz 08/20/2012 06:17 pm

Great article Bryan! A good business relationship requires open, honest, two-way communication and companies that develop true partnerships with suppliers will always be more successful. I also appreciate and agree with many of the other posts, particularly the comments by Peter about technology enhancing not eliminating communication, and those by Matt on the importance of contact when working in professional and technical areas. Consider too that the consequences of these no-contact programs go beyond the delivery and quality of current work. The SOW space and the desire of Procurement and HR departments alike to control that spend and bring those workers under the VMS/MSP umbrella has been a hot topic for a while. I think one of the advantages hiring managers find in the SOW is that it allows for the contact they need to correctly find the quality professionals who can fill their positions. It is absolutely possible to unite the advantages VMS and MSP provide in terms of streamlining processes and controlling costs, while also providing the amount of contact needed and desired by actual hiring managers and their suppliers. Until companies demand programs that are designed this way, I'm convinced it will be difficult, if not impossible, to ever really bring the SOWs into the fold.


Multivision Inc

Ajit Walker 08/20/2012 10:58 am

I unequivocally disagree with what has been said here. Time and again we have seen in our past lives the misuse of such open communication between Hiring Managers and Suppliers giving few the undue advantage of direct relationships. The very reason we evolved to a more ‘Vendor Neutral’ model was to curb unfair practices between Hiring Managers and Suppliers leading to Poor Quality, Slow/Lethargic Turnaround, Higher than Market Contractor Costs and worst of all Unreasonable profit Margins. I also remember the large Sales investments that suppliers were making in a Walk-the-Corridor or Direct Relationship model in order to penetrate and protect relationships (Yes, you know what I’m talking about…). As a current supplier on many MSP/VMS run programs bearing stringent SLA's, I have seen firsthand the immense benefits that customers are enjoying today starting with minimized Co-Employment Risks and better compliance to sourcing contract labor. I know for suppliers like me it can sometimes be a black-box as much it is for the hiring managers, but a strong/experienced MSP Vendor Management Office (VMO) finds numerous ways to effectively create a collaborative environment. For example a simple moderated conference call between the Hiring Manager and the supplier community can help better understand a job requisition. In a day and age where even core corporate functions are becoming more virtual with the adoption of a robust IT infrastructure, I don’t see what's the big Hue and Cry about wanting to get more "Face Time" with the customer. Face it folks, this is how Contingent Workforce Strategies are bound to evolve, so spend more time is strengthening your "Backend Delivery Engine" and less time brooding over its evolution like many large staffing firms that are no longer in business today (No, I’m not going to name them, everybody knows…). Kudos, to the ones that evolved, making it into a viable business model and not just plain science.


Supplemental Health Care

Robert Crowe 08/16/2012 09:52 am

Having seen the evolution of the MSP model first hand over the past 15 years, I’m excited to hear more dialog around collaboration between clients, the MSP provider, and the staffing providers. So often, a MSP provider serves as a barrier between the client and those actually providing the staff as a form of control that is counterproductive to program success. I endorse full transparency and open dialog where the MSP provider is really charged with helping both the client and the staffing provider benefit from a centralized program model. However, I have to concur with Harsha’s earlier comments that quite often an organization may implement a MSP to actually remove their managers from having dialog directly with staffing providers in attempt to ensure compliance to their internal staffing strategy. All too often I’ve seen staffing organizations turn a conversation about a single requisition into “skill marketing” an available talent for a non-approved requisition or convincing a manager to make concessions to bill rates, credentials, or other established program processes. Essentially, every MSP should be customized to each individual client’s program strategy and culture. Some programs may have more open communication than others while the best MSP providers will see their role as one to facilitate improved transparency and open dialog between the client and the staffing providers (albeit most likely in a tightly controlled environment).


Link2consult

Peter McCree 08/16/2012 08:03 am

Brian, I agree with you. I have always believed that the VMS technology being used should enhance communication between all parties involved, not eliminate it. Vendor management should be a collaborative process. I have found that hiring managers and their suppliers are much more in tune with each other if they have a structured communication channel. A major problem is that most VMS systems in use today were not designed as collaborative applications. In some cases, this leaves the phone and email as the vehicles for Hiring manager/Supplier communication. There are a few VMS systems that are built for collaboration. HM/Supplier communication can be controlled, structured and documented within the tool. Hopefully the market is moving in this direction.


Yoh

Rivera Matt 08/15/2012 02:42 pm

Totally agree - especially in professional and technical areas. MSPs that provide good service, transparency and an efficient program shouldn't have a need to limit supplier contact. The partnerships with suppliers in an MSP program can make a big difference in how customers and specifically customer hiring managers interact and accept the program. At the end of the day they want to know and feel you are doing the right things to fill their jobs with top candidates. Facilitating an environment where the suppliers can do their job the best is critical to the success and value of an MSP. The MSP and customer should both be bought into this concept from the beginning and understand the risks and rewards. In my experience, any fear in this area is quickly put to rest with good communication between the customer and the MSP, and good reporting.


Delphi-US, LLC

Greg Demos 08/15/2012 01:59 pm

Well said Bryan. Managing Services and Managing Vendors should always be a balance of compliance, protected interests, and beneficial collaboration. Adding quality of service on top of this mandates that the trust, creativity, and a little conversation you mention is available for your client and your supplier. If a program manager or internal champion fears the reprecussion of mis-alligned vendor/manager interaction then they are working with the wrong suppliers and representing the wrong client. It is the program manager's responsibility to educate their client and suppliers alike of the do's and dont's so that the interaction is in line with program goals. Advocating a no-contact environment is sure to foster poor quality and rogue behavior.


ettain group

Jon Olin 08/15/2012 01:53 pm

Well said Bryan...especially the line - "Partnership means both parties are acting in a manner that ensures everyone can be successful, and it is the contingent workforce program manager’s job to set the stage for that." Staffing companies may be a necessary evil for our clients to find the best available talent, but if properly positioned and utilized staffing companies can add a lot of value to an organization.