SI Review: September 2012

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Straight Talk From the Customer

Abide by the Contract

Adhering to the rules can be a win for all

By Nicole Boycourt

As part of the human resources staffing team at Dominion, I am responsible for oversight of our managed service provider contract. We implemented an MSP model for contractor acquisition in 2010 and use our provider’s vendor management system.

We have a collaborative partnership with our MSP, and enjoy benefits such as total supplier management, centralized reporting, simplified invoicing, payroll services integration and consistent mark-ups. The suppliers enjoy many of these same benefits: having a single point of contact within the company, simplified invoicing, and consistent contract terms. In order for my company and suppliers to fully benefit from this model, it’s vitally important that every supplier adhere to the rules. Here I discuss some of the most critical rules.

Maintain neutrality. Our MSP is charged with maintaining a supplier neutral program. Each requisition is essentially a mini-bid, open to the suppliers in our program, where the manager chooses the best talent for the best price. Suppliers should have equal access on a level playing field, so they are not allowed to send résumés directly to hiring managers. Maintaining a supplier-neutral program helps us find the best talent and allows suppliers to be rewarded with more placements when they source the best talent.

Adhere to job reqs. Contractors provide necessary skills to supplement our existing workforce. Suppliers are valuable business partners providing a much-needed resource. When receiving a job order, suppliers should carefully read the requirements for the position. We only want to receive résumés for candidates with the required skills, who are also willing to perform the job. For example, candidates should be willing to do the job with the required schedule, working conditions, location, pay rate, etc. This is the supplier’s opportunity to show us their best, so they need to make sure they’ve done their homework.

Be available. We look for suppliers who can support the needs of our business. Whether it’s staffing for outages, storm restoration work or regular operations, we need suppliers who are available to the MSP. We regularly call on suppliers for help with work that requires immediate response since our business operates 24x7, every day of the year, and in all weather conditions. Because contractors are employed by suppliers, we expect suppliers to handle human resources issues as well. Our company managers don’t handle performance management or questions around pay for contractors: we expect contractors to call their employers with these questions.

Bill rate schedule. In our program, we have defined pay ranges for job titles. These have been established as reasonable pay ranges to both attract talent and maintain budgets. Because contractors working at our company could conceivably be offered employment, we do consider internal equity when establishing pay and bill rates for contractor ranges. We try to avoid disappointing contractors converting to full time employment and having to take a significant pay cut. At the same time, we realize that there is a delicate balance, since contractors are not always full time employees of a company receiving benefits and may expect higher hourly rates in return.

We use pay rate plus mark-up as our bill rate calculation. These are the mark ups we are willing to pay within our budgets, and allow for reasonable profit to the suppliers. We understand that some suppliers have a corporate standard for minimum mark-up, but that may exceed what we are willing to pay. Suppliers unwilling to provide labor at the specified mark-ups should not participate in the program.

Each supplier has a contract with the MSP. These contracts have been written to fully comply with the contract between the company and the MSP. The provisions outlined are there for a reason — they address risk management, fees and discounts, work processes, the VMS and other company requirements. We request that all suppliers follow the MSP contract if they want to participate in our program.

In closing, we value the relationships with our MSP provider and its suppliers. If our suppliers play by the rules, Dominion, the MSP and the individual suppliers will benefit.

Nicole Boycourt is a senior human resources specialist at Dominion (www.dom.com), a producer and transporter of energy.

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