SI Review: October 2011

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Straight Talk from the Customer

“The bitterness of poor quality remains long after the sweetness of a low price has been forgotten.” This quote, generally attributed to Ben Franklin, hung above a door at my uncle’s electrical business more than 30 years ago. The quote stayed with me as I began to experience its relevance over the years. In the world of contingent labor, nothing causes more pain for a client than living in this reality.

Ideally, a practical approach to acquiring new business would be to provide a realistic pricing proposal with a delivery model you can be successful with. Larger organizations are becoming more aware of what goes into costing out contingent workers. If you price yourself too high and are asked back to explain, have your spreadsheets ready. If you price yourself too low and the organization salivates over the potential windfall of cost savings, you had better have one lean and mean delivery model.

I have worked with very large programs, VOP, MSP, preferred vendors, and those with no formal structure at all. For the purposes of this column, I’ll assume that all things are equal and your staffing firm has just landed a client with just-right pricing and your team is very excited to get a chance to show its stuff. Let’s also assume the engagement is through an MSP or a preferred vendor list where there is some competition (as most things are these days). Here are a few things to consider as you formulate your agreement and strategy:

During negotiations. Engage your service and delivery team when negotiating the contract (not to mention the finance and legal folks). I have seen too often the results of a badly negotiated contract passed on to the service and delivery team that cannot be successfully carried out.

“One throat to choke.” Have a dedicated account representative. This person has to be outstanding and a great leader.

Understand the client. Make sure the team of recruiters fully understands the client’s business. For centralized recruiting models, carefully consider your strategy.

Compensation model. If your commission plan is based on traditional staffing models, the incentive to workthe orders on the fixed pricing client vs. open bidding client will likely be biased. Get creative!

Consider location. If you are concerned about cost, ease up on the brick-and-mortar and home base your dedicated team.

Procedures. Have standard operating procedures in place and be sure they are followed consistently. Also, assure there is a very clear understanding of the SLAs.

Personal contact. Get to know your primary contact. Use just that contact, unless you have been given permission or asked to contact others. If that contact is the MSP don’t deviate. Whatever you’re asked in terms of contact, make sure it is in line with compliant practices.

Understand labor law practices and workforce trends. Your client will depend on you for this.

Finally, assure you have the talent in place to support the engagement. I have experienced very talented individuals at the top level of a staffing organization only to deal with sub-par talent in the trenches after the ink has dried. Don’t let this happen to you!

If you follow these simple guidelines, chances are you will be successful regardless of the type of program you support

 I have been in the business a long time and have a good sense where a firm’s cutoff for success generally should be. When the pricing does not support the operations, quality suffers and the firm looks to trim the service and delivery model. That’s bad business and a risk not only to the existing engagement but to your credibility as a quality resource in the industry. If you have made the mistake and bid too low, work extra hard and deliver, then go back to the client and see if they would be willing to discuss an adjustment.

Alternatively, if you are fortunate enough to have landed the engagement with above-market pricing, there is an old saying, “make hay while the sun shines,” because it’s a matter of time before they will come for you.

Gary Campbell is the director of human resources at Johnson Health Center and a contingent workforce strategist and educator.

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Program Manager

Deann Richardson 10/26/2011 02:07 pm

Well written article, direct and to the point. Oftentimes the customer thinks they want the lowest price but when the rubber hits the road, and it will price falls by the wayside.

Thank you for your insightful article.


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