CWS 3.0: September 21, 2011 - Vol. 3.25


Peek Under the Hood: Why Talent Matters

I’ve spent my entire career helping companies build go-to-market strategies. For the most part, the programs we’ve built have worked out well for my employers as well as my customers.

When we build those programs, the initial phase often includes interviewing a number of program owners in the target market, including current and former customers, prospects and firms that aren’t in the sales pipeline. A key question we ask is the biggest reason a decision-maker or influencer chose — or didn’t choose — the company we’re representing.

In the case of the vendor management systems and managed services firms we’ve represented, the answer to that question has changed significantly over the last few years. A few years ago, the reason was “access to talent that impacts our business.” Now, we’re told the decision was to  “eliminate cost” or “save us money” or even “to reduce all expenses.” Now, I understand the realities of the market. The global economy has either double-dipped or flatlined. And aside from Australia and China, few markets are hiring strongly across-the-board. So the need to keep costs in line is understandable. But the sea change that has put talent at or near the bottom of reasons to outsource or choose a provider makes little sense to me.

A weak economy is not an excuse for failing to ensure that your company continues to build a talent pipeline from your contingent workforce program — especially considering that most companies say up to 25 percent of their employees are recruited from the ranks of their staffing suppliers. At worst, it’s malpractice. At best, it’s a long-term misadventure.

Building a bifurcated program strategy of cost management and high-impact talent acquisition is not impossible. It’s realistic. And quite achievable.

This strategy starts with developing program objectives that are focused on market realities as well as the needs of your business. An example could look like this:

  • Reduce talent acquisition costs by 10 percent across all skill verticals
  • Streamline supply chain activity by ensuring that only suppliers with a greater than 25 percent fill rate remain in the program each year
  • Create a requirement that all suppliers must have an unregretted turnover rate of  less than 10 percent

Now, “unregretted” is a weasel word for consultants that are terminated for lack of performance. But the meaning of the objective is very straightforward: only suppliers that deliver great talent will be in the program. And if those suppliers fail to deliver great talent along with cost savings, there’s no reason to keep them around.

The key to this approach is understanding that quality talent acquisition and cost management can be delivered concurrently. I’ve seen many examples of how companies that are in a cost-reduction mode maintain their focus on building a talent pipeline from their contingent workforce program. They’ve done this primarily because they understand that if they stop building a pipeline of talent, they’ll be far behind when demand picks up. And that’s a recovery that runs out of steam.

Jim Lanzalotto runs Scanlon.Louis, a strategy and marketing outsourcing firm that helps companies grow. He can be reached at or 610.212.5411.You can also follow him at


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