key facts contingent workforceEach year I attend several staffing industry conferences. I tend to find that the best and most useful thing about conferences is the chance to catch up with clients and competitors, many of whom are also friends. That said, the learning, insight and advice available at the formal sessions can be excellent too and I often order MP3s so I don’t miss out entirely if I can’t attend a conference or particular session.

I wasn’t able to attend the recent Staffing Industry Analysts‘ Contingent Workforce Strategies Summit but I’ve been listening to the MP3s. As always, they had some excellent panelists from some of the largest, most successful companies, who were willing to share their experience in building and managing programs. I’m not going to give names or go into detail here; everything is available on the SIA website if you are interested in more. I just want to share some observations that I made listening to this SIA conference and other speakers throughout the past year.

You might think that the larger a company is the larger and more complex their contingent workforce program must be. You would be correct. You might also think that because of that size and complexity, the best solution is to outsource the MSP to the experts and build a stringent program with strict guidelines that employees are required to use. You would be wrong there. In listening to the SIA’s CWS sessions, I was reminded of something. While it might seem counter-intuitive, some of the largest companies, with substantial numbers of contingent workers, have MSP programs that are managed in house and are flexible in some surprising ways. What can we learn from them? Well…

1. Outsourcing the MSP is not always the best answer

As a rule of thumb, the larger your CW spend, the more likely you will save money by bringing your MSP in house. But there are other reasons mentioned as well, such as wanting ownership of supplier contracts and relationships. Culture is another factor cited; some companies decide is more in line with their corporate culture for program compliance to be driven by co-workers rather than a third-party.

2. Optional programs work
I’ve heard from more than one company with thousands of contingent workers that they do not require their hiring managers to use the MSP. While many companies find success in compelling participation, others have chosen to entice instead. These programs rely solely on their ability to deliver value as a motivator for participation.

3. Communication between hiring managers and suppliers is a good thing
The common perception might be that the larger your program, the more you should prevent contact for efficiency’s sake. Externally managed programs often position the MSP provider as a gatekeeper and some see this as a benefit. I don’t agree as I’ve written before (Communication the Best Practice) and I’m happy that I’ve heard more than once from very large programs that they at least allow, usually encourage or even demand that vendors work directly with hiring managers as well as within the guidelines of the program. Open communication is a staple of their program whether the MSP is in house or outsourced.

4. Pricing is not the most important factor
Whether it was a simple statement like “price is not one of the top factors in our decisions,” a comment that “you get what you pay for,” or a full-fledged declaration that “we work to develop strong relationships and provide an environment where our suppliers are happy and can succeed,” I have consistently heard from many that price is not a deal breaker. To be fair, one buyer explained that they make their decisions based on who is most qualified and then negotiate like heck to get the price down, and they can be tough negotiators!

5. Don’t be rigid and inflexible
Many of the largest programs seem to recognize that to be successful they must cater to different internal customers, and they adjust their program offerings and protocols to reflect these different needs. They also are challenging the idea of in-house or outsourced as opposing models and inventing hybrids where portions of their program are “in” and others are “out.”

If you are building a first time MSP, or just looking at how to improve your existing program, think about what you can learn from well run programs, big and small. Contingent workforce program management is entering a more mature stage of development – MSP and VMS are not the new buzz words of the industry. After 10 years of rapid growth, companies are more knowledgeable and savvy and have begun moving from one-size-fits all approaches toward models that are tailored to their individual needs. Whether it’s in-house or externally managed, businesses want programs that reflect their unique culture and work best for their internal customers while delivering time savings and cost management. By learning from others, your program can do that too.

Jerry Brenholz
President and CEO
ATR International


Leave a Reply

Your email address will not be published. Required fields are marked *