SI Review: October 2011

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Research Report: Managing Staffing Firms

Quality business reviews are the most common method staffing buyers use to manage suppliers of temporary workers, according to a survey of 217 large buyers of staffing services conducted by Staffing Industry Analysts, the publisher of this magazine.

Seventy-one percent of staffing buyers use quality business reviews — a generic term for a review of how well a staffing vendor is meeting a buyer’s needs in order to retain and renew the better suppliers.

Quality business reviews, also known as “QBRs,” are good marketing opportunities because buyers at large firms can use them in efforts to expand contingent worker programs at their facilities, says Bryan Peña, vice president, contingent workforce strategies and research, at Staffing Industry Analysts.

“These often become useful internal sales tools to show how the program is proceeding,” Peña says.

Buyers also have several other carrots and sticks they use when managing staffing firms. On the one hand, many companies return to staffing suppliers some of the cost savings they produce, while on the other, they may refuse onboarding privileges. However, carrots tend to be the more common tools.

The most common method following QBRs that buyers use to manage staffing firms is also a carrot — increasing vendor exposure to reqs. An example of this method might be a buyer giving a staffing firm exclusive access to new job openings for a limited period of time. The survey found that 52 percent of buyers use this method.

Another carrot, returning a portion of money the staffing firm saves the buyer — called “gainshare back to cost center” — is used by only 15 percent of buyers.

The “sticks,” or disincentives, include an accounts payable shutdown — staffing vendors are removed from the buyer’s accounts payable database until they cooperate. Thirty-three percent of buyers use this method.

Another stick is “no onboarding” — when an underperforming vendor is not allowed to use buyer facilities for interviews, screenings, etc. Twenty-seven percent of buyers cited this as a way they manage staffing suppliers.

Buyers may also use a stick on their own internal hiring managers who circumvent systems. Here, such hiring managers may be brought to the attention of the buyer’s contingent workforce manager through “lost savings reports” or “noncompliance reports.” Thirty percent of staffing buyers do this.

Procurement vs. HR

Survey results also found staffing buyers in procurement departments tended to use carrots more than sticks. Buyers in human resources departments were somewhat more likely to use sticks.

The survey also found that buyers higher up the corporate ladder tended to use more incentives — both positive and negative.

Craig Johnson is managing editor, staffing publications, at Staffing Industry Analysts. He can be reached at cjohnson@staffingindustry.com. For more information on staffing buyer research, contact memberservices@staffingindustry.com.

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