CWS 3.0: August 29, 2012

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Supplier Mistake No 2: Skirting Program Rules

In my previous column, I discussed how no-contact policies have come to be more of a hindrance to contingent workforce program success. To say the least, many of us in the industry have an opinion on this. Those who said they were against it were uniform in their perspective that preventing suppliers from interfacing with managers contributed to many a failed program. On the other hand, a number of buyers still believe that granting providers direct contact with hiring managers will eventually result in chaos. Why is there this disconnect?

To be blunt, staffing companies that complain about the no contact MSPs or the rise of vendor management or the horror that is vendor-neutral MSPs have only themselves to blame. But many suppliers persist. I have actually been to workshops at some of our conferences and other events where staffing firms strategize about how to go around programs to contact hiring managers directly, and that’s what I consider a Big Supplier Mistake No. 2. While such a strategy may yield some short-term benefit in the form of an odd requisition here or there, I can guarantee you it will not lead to long-term success. What these suppliers may fail to remember, or even consider, is that the world of contingent workforce management is relatively small. We all speak, and connect on networks like LinkedIn and conferences like our upcoming CWS summit. If you are a difficult provider, trust me, it will get out.  What you don’t want to get is a reputation that affect your long-term viability.

Staffing firms often fail to appreciate how challenging it is to manage a category of spend as complex as contingent labor. Combine multiple vendors, hundreds of hiring managers, and numerous locations across multiple geographies with limited ability to track who is in the building, working on-site, or even banned from entering the premises and you get the picture. The invoice counts alone across hundreds of contingent workers could reach into thousands per week.

I’m not advocating contingent workforce managers allow their programs to go back to the days of unfettered access, when staffing salespeople were allowed to walk the halls bearing donuts, developing direct relationships and agreements with hiring managers and placing candidates without even a contract or executing contracts on their own. But I do ask that both sides consider the other’s position in today’s tough times.

It’s very difficult to develop business in the current economy. And many companies struggle with how to penetrate prospects in such a competitive environment.  But I think a more constructive way to evaluate your approach to prospective clients is to ask one simple question: Am I making life easier for this potential customer or more difficult? Often, an honest answer may surprise you. The job of the program manager is incredibly difficult. And anyone, any provider who can make my life easier and play by the rules is one that I’m going to look to when the need arises. It might not be today, tomorrow or even this year, but one thing is certain: it’s those companies that reach out and play by the rules that get the first look.

I write about partnership and I believe in it as a core value for any program or initiative that I’m involved in and/or running.  And while I wrote in a previous column about firing a buyer, and a buyer firing a supplier if there is no partnership, I think you also need to be honest with what type of vendor you want to be. If you’re going to play in today’s contingent workforce management arena you’re going to need to learn to play by the rules.

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David 08/30/2012 03:42 am

thx, great blog. @Greg, great comment, totally agree. your summary of drivers in a managed programme are spot on I believe

thx both
D


Delphi-US, LLC

Greg Demos 08/29/2012 02:04 pm

I have long been an advocate of well built/well run managed services. I believe in the marketplace, enjoy playing by the rules (when they are driven by results and partnership), and consistenly succeed in this framework. As a leading supplier in several world-class MSP/VMS programs, I seek programs where the rules are reasonable, the business terms marketable and incenting, and where my services can be differentiated by results (not doughnuts). I will also tell you that some program rules are contrary to the spirit of enterprise and this is dangerous. Business cycles come and go, good partnerships should last. Unfortunately, many programs were built in a cycle that exploited suppliers; and these programs (you know who you are), must change.

I feel it comes down to the driver of these program rules. If the driver is purely cost containment - yikes, not good, this is not just a supplier problem, it is a business problem. If the driver is about eradicating unacceptable supplier behavior - surrounding these suppliers with program rules is not going to help, its time to dump the supplier.
I maintain that the driver should be results - #1)strong talent, 2)marketable rates, and 3)efficient processes with, you said it, a partnership - that is Trust in buyer/supplier relations.

If the rules/business terms are prohibitive to healthy service provision then the program will ultimately fail.


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