SI Review: January/February 2013

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Straight Talk From the Customer

The No-Touch Program

Why no direct hiring manager contact is beneficial for suppliers in an MSP program

By Daniel Khublall

At the CWS Summit in San Diego last September, I noticed a re-occurring theme in my direct dialogue with other program managers as well as suppliers: How do you manage your vendor list and do you allow manager/supplier contact?

As you’re reading this, I’m sure you’re thinking that allowing direct contact is the way to go. You may say you’ve worked in other programs that allow it. You may want to tell me about a specific, direct-contact situation where you were able to fill a position much faster than in a no-contact situation. You may assert that the MSPs don’t “get it” like you do, and that being forced to work through an MSP can cause some details of the sourcing process to get lost in translation. My take: You may be correct, but you’re missing some of the equation.

Maturity Matters

The key to understanding why a no-touch policy exists in a program is to understand how mature the program is and how well it’s managed. In a younger program, the supplier can help the program manager evolve the program over time and be a true strategic partner in the long term. Supporting the no-touch policy while it’s in place can be a means to a profitable end for you.

My career has taken me through three contingent worker programs at some of the largest financial firms since 2005. My current role oversees the overall contingent worker program and MSP relationship for my company. While the program is about 6 years old, it went through a re-launch in 2011, yielding a new supplier list and rate card.

Since the re-launch, we have enforced a no-touch policy, which has proven to be beneficial to getting my program to where it is today. I believe the no-touch rule helps suppliers that are on a program’s preferred supplier list. It helps to drive business to you and prevents leaks to non-preferred suppliers outside the program. In a properly managed program, the hiring managers understand the savings attached to using the program and forge a relationship with the MSP that fosters a comfort level with it as their liaison. The rule works both ways; it helps preserve your market share and also drives business to you that may have been lost to other suppliers. In the long term the supplier list will become a tight-knit group that is impenetrable for the most part. The no-touch rule helps lock down and lock out the competition in the long term.

To be fair, I’ve worked in very successful programs where there was open communication between the managers and suppliers. The difference is that these programs were much more mature and had fewer preferred suppliers on their list than my current program. There will always be nonpreferred supplier deals; that’s what a payroll company is for. The key is to minimize the nonpreferred deals and drive the volume to the preferred list. Again, a no-touch policy can help program managers as well as the MSP achieve that in the short term.

Demonstrate Value

As programs mature, program managers will undoubtedly figure out which suppliers are performing well and which are not. In my opinion if a supplier can consistently place people working through the MSP, then they are probably a good fit for the organization. If a supplier can’t work through an MSP and follow the rules, do I really want them working directly with my hiring managers on an ad-hoc basis? I don’t see those suppliers as “team players,” so when it comes time for cuts, they’ll be the first to go.

The no-touch rule drives consistency and compliance in a young or newly redesigned program. It helps the program manager to centralize the activity and get things in order. The suppliers who stick through it not only show they can be good partners, but also show that they can act in the best interest of the program and not just focus on their profit. Then, as the program matures, the rule can be re-evaluated.

So don’t dismiss the rule. It’s actually helping to drive more business to you in the long run. That is, if you can play by the rules in the short term and prove yourself to be a valuable long-term partner. Just ask the suppliers in my program.

Daniel Khublall, contingent worker program manager for TIAA-CREF.

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Dan Khublall 20/08/2014 1:19 pm

I agree with all the comments... it's about timing.

In my example above we had an immature/new program with a large population of suppliers. I was actively managing the MSP and ensuring that if we weren't allowing manager/supplier contact then the information was in fact flowing via the MSP and in a timely and efficient manner.

A few months after the article was posted...the same program had the supplier list reduced by over 50%, the MSP was under a new service delivery model and manager supplier contact was allowed.

I'm at a new program now doing the same thing and it's working.... so there is merit to a no touch program when used to accomplish specific goals as you head towards a well run and mature program.


Eagle Professional Resources Inc

Kevin Dee 01/03/2013 8:55 pm

You will excuse me if I disagree. A preferred supplier list by its nature reduces the impact of MANY suppliers calling hiring managers, to suggest a no-touch rule is needed is overkill. The cost of a no-touch rule is however highly counter productive. It is a false saving to suggest that clients be well served when their suppliers have to guess at what is really needed, receive minimum, or even no, feedback on candidates and are interfacing with often over worked and under trained representatives of the MSP. The MSP often brags about the savings to a client but it is impossible to understand the impact of slower hiring, less qualified candidates or the loss of great people because they lose interest in a process that treats them like a "product". The project timeline impacts, slower product to market or errors and disruptions are costs that are never accounted for in the pure numbers.
It would be my considered opinion. like most suppliers, that the best way I can serve my clients is to understand their issues, their business needs and the nuances of what they need and then working to find the right people at a reasonable price, rather than as many cheap resumes as fast as I can!
MSPs can bring order and value to their clients ... the no-touch rule is NOT something that brings value.


Solv

Brian Owens, Managing Partner 13/02/2013 2:44 pm

Having lived on all sides of the fence in different roles at different companies, as a Staffing/MSP, VMS provider and Staffing Provider, I think this is a classic example of, "it's only true if...". IF there is timely feedback on submittals from the MSP to the supplier, IF there are orientation meetings with the staffing firms that allow for clear understanding of the culture and intangibles, IF there are regular coaching sessions with the suppliers so they know where they may and may not be performing and why, then it can work very well.

My experience, in all worlds, is that if the above is not true, suppliers can easily lose interest in an account, move on to other clients, or worse yet, find a back door to the program. As a pioneer of both the VMS industry and early MSP programs, we understand the dynamic pretty well, and agree that these programs can be very powerful and effective, but only, "IF".


Gary Campbell 09/02/2013 10:09 am

Excellent piece and spot on. The key term here is maturity matters however if you can't get your customers to the point of no-touch then the program has limited opportunity to mature to an optimum level.


Total 4 comments