SI Review: May 2013

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Expert’s Corner

The New Reality

How suppliers can be effective in this environment

By Bryan Peña

Staffing is a people-centered business. Not only is the “product” people, but in the past, success hinged on a staffing supplier’s ability to build relationships and establish a rapport. Sales success was based on numbers and even moderately competent suppliers could realize success by making sure sales activity was maintained — number of calls made, number of face-to-face meetings. And recruiters’ path to success was similarly based on hitting quantifiable goals — number of résumés submitted, number of placements made.

For decades, this worked. Then came the rise of contingent workforce management and managed service programs. The efficiencies and the controls required by MSPs have dramatically changed the way staffing firms work and many providers are still trying to figure out how to navigate the new waters. To succeed in today’s market, staffing firms need to decide if they are willing to provide services into these programs and in so doing, deal with the new reality that comes along with such a decision.

Different Strokes

A company’s success is usually measured by its rate of growth. There are many perfectly competent staffing firms that provide great service and selectively take on new business where they can be assured of a high level of success. That said, the avenue for growth that most companies pursue is to take on ever larger accounts with ever larger companies. There is nothing wrong with this approach, but those that pursue it need to be prepared to deal with the new reality of working with the MSP.

Succeeding with MSPs often requires the creation of a separate business line. This means that providers need to build a new delivery mechanism based on speed and lower cost. Higher cost recruiter commissions need to be replaced with lower cost salaried recruiters — most often entry level — to manage the business and be evaluated on performance-based KPIs instead of other “soft metrics” like appointments or sales calls made.

The Other Client

Don’t forget that the MSP provider is your client. The MSP provider is ultimately accountable for successful delivery, and it should be your objective to help it achieve those goals. How do you do that? The best way is to learn as much as you can about the provider. Who are its other clients? Why did the customer select it in the first place and on what basis is it evaluated? Specifically, and most important, you should do your best to learn what KPIs it is accountable for. Treat the MSP office as you would a strategic customer because it is.

One of the core benefits of working with an MSP is that the provider offers a window into a larger client base where they can bring successful providers to other clients. By taking an interest in what makes the MSP successful and actively committing yourself to help it you can ensure that at a minimum you will stand out as an ideal potential supplier to be presented to other clients.

There is always a bad apple in every bunch and MSP providers are no different. There are good ones that take an interest in the success and health of the staffing firms in the program and others that do not actively support the supplier base. Still others focus on cost savings or implement pure no-contact programs, which translates to reduced margins and internal morale challenges for the staffing firms in the program. With MSPs of the latter type, sometimes staffing firms should make the difficult choice not to participate and say goodbye to significant business. More often, however, the client will direct the MSP provider to work with its strategic staffing providers.

VMS and MSP management strategies are not going anywhere regardless of how many of you wish for the contrary. While making the necessary changes in your operational and sales approaches can make success more likely, you still need to deliver a quality service. That may be more difficult at times but it remains the best way to ensure long-term success.

Bryan Peña is vice president of contingent workforce strategies and research. bpena@staffingindustry.com

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