Gain Visibility into your Contract Labor Program
Transparency is a hot topic today. Without seeing “under the covers” of how you are managing contingent labor, your business can be hard-pressed to know how to optimize your labor investment. Are you ready to move toward better visibility? Consider the below objectives.
- Snapshot data that provides insight. You need to know that you have the right partners providing the right people at the right time for the right rate. You need to see evidence that reveals how vendors are performing and know whether your contingent labor program as a whole is efficient. A consistent, single system of record can provide data that can be measured and reported, driving new insights.
- Rooting out inefficient spending and reducing rate disparity. When you are facing challenging markets and competing for talent, you can’t afford to make decisions blindly. To leverage buying power, you need insight into vendor contracts’ details and the data to compare performance among vendors:
- Do your billings make sense for your business model?
- Do you have rate structures that align with how your business operates?
- Are you leveraging the right pricing strategies based on how and why you engage third-party labor while maintaining healthy engagement from your supplier base?
- Scalability that fosters engagement. Implementing any solution must drive consistent engagement on the part of your stakeholders – Hiring Managers and Suppliers alike. Otherwise, the value of the investment will never be optimized. However, many companies focus their efforts during implementation and configurations solely on the current state, without thinking a step ahead to how the platform will accommodate merger and acquisition activity, reorganization, international expansion, or other major system investments. If the initial solution is not structured with the ability to flex and scale, users won’t engage as desired, and the maverick spending and headcount that results can diminish cost savings strategies, visibility, and compliance.
- Support DE&I goals. Businesses focused on Diversity, Equity and Inclusion are pushing for better ways to ensure fairness. Organizations must maintain impartiality towards job candidates from varying backgrounds and be able to demonstrate a commitment to DE&I principles across the Can you see DE&I data throughout the recruitment process and beyond?
Steve Dern, Executive Vice President, Evaluent, understands the pain points of lack of visibility. For two decades, Steve has managed the strategies, technologies, processes, and vendor solutions for large contract labor programs.
“Contract labor can be complicated, especially for decentralized programs. Multiple vendors and technologies, and inconsistent processes tend to add a cloak of obscurity around spending and performance.” Dern said, “Gaining visibility into processes and utilization can be extremely eye-opening. We talk to many companies that want to optimize their workforce but aren’t sure where to start. We help empower them to see opportunities for improvement.”
Achieving Labor Transparency-What are the Steps?
- Understand your current state. “Self-awareness is the first step to enlightenment.” The Zen-like statement holds true for managing your internal and external workforce. It is vital now more than ever in today’s challenging talent economy. You must be able to answer the following questions:
- Why do we use contingent labor? Is it for short-term gap needs, engaging subject matter expertise, or as a recruiting channel for direct hire needs?
- Which processes work today, and which do not?
- What causes hiring managers to “go around” established protocols?
- Can we easily obtain data and statistics around our program from a single system of record?
- What values are priorities for the organization, and can you measure their impact today?
- Find the right resources to lead the process and program. Most organizations have HR talent that understands the traditional employee-employer model, but they aren’t experts in contingent labor matters. If you don’t already have someone with deep experience in staffing or contingent labor management spanning multiple accounts and/or offerings, find somebody to lead the effort. This could be a staff member or a third-party provider. Either way, the experience of standing up contingent workforce solutions—including not only what has worked but also what has failed—will help you analyze the current state and define solution strategies.
- Engage departmental stakeholders and users within your Governance team. The person leading the effort should have the expertise to build out a workforce program, but they can’t do it alone. Engage your heavy users, IT and accounting SMEs, HR, and Indirect Procurement staff. They can bring subject matter expertise that will be required as part of a VMS/MSP solution and help guide the sourcing process and, eventually program design.
- Source to solve your problems, not implement your model. Let’s face it – if your model was good enough, chances are you wouldn’t be looking to outsource to a third party. Allow potential bidders to offer models, solutions, and innovations that demonstrate relief of specific organizational pain. This will allow for a delivery program that drives utilization into a consistent system and process flow that becomes scalable and allows for performance management and visibility.
It begins with a System of Record
The process of gaining visibility begins with establishing a consistent system of record, preferably one to which all stakeholders have certain levels of access. This is where a Vendor Management System (VMS) delivers compelling value, as it serves not only as an automation tool for requirements, candidate submittals, assignment management, time and expenses, and invoicing but because it captures the critical data points that can be delivered in reporting, both for your organization, and the suppliers themselves!
There are two paths you may choose in your selection process. You can look to your MSP provider to bring a VMS solution, or you can select each party through a separate sourcing process. It can be important to know if your MSP has prior experience with the VMS. Forcing the marriage of two does provide you with a “separation of church and state” that allows for independent contract control. That’s something to consider when addressing the possibility of the relationship not working out as planned.
A key success factor to a contingent workforce program is establishing and documenting key contractual terms that can be tracked and enforced through consistent contracts among your supply base.
You want to level the playing field, so make sure the contracts are held by you and on your paper. Terms should include not only pricing and payment terms but onboarding requirements, insurance, and company policy documents. Make sure the documents that should be reviewed and executed by contingent workers as part of their onboarding process are labeled for contingent workers, not employees.
The Power of a Managed Solution: Insight
A managed solution provides the ability to measure the data; it empowers your team to obtain the data needed and intelligently course correct – and you will have to course correct as the program evolves. Identifying what information your hiring managers, sponsors, and suppliers will deem important and actionable is a crucial part of the implementation process. This can include:
- Sourcing performance (time to submit, time to fill, placement percentage, etc.)
- Worker turnover
- Spend and headcount utilization
- Supplier performance
How to know if you’ve got the right partner
Ask yourself these questions as you evaluate potential partners:
- Do they have experience in the contingent workforce space with various clients?
- Do they offer a predefined solution model, or is it truly customized to the client’s needs?
- Do they offer a consultative approach to the discovery process that leads to program design?
- Is there an alignment of corporate values?
- Don’t worry about the experience with companies in your own industry! Focus on if they have delivered successful results with companies who have similar pain and challenges, regardless of industry sector.
Equiliem (www.equiliem.com) believes in empowering success. It’s our job to cultivate relationships that connect people and employers in a way that is inclusive, intelligent, and allows both to thrive.
Across the U.S., leading companies in healthcare, government, light industrial manufacturing, professional services, and energy rely on us for their workforce solutions. Our recruiting and HR services include contract and direct hire staffing, Payrolling/EOR, Independent Contractor Compliance, and Managed Services.
Since 1995, we’ve helped shape our industry. Today, we continue to research, ask questions, and continuously enhance the candidate journey and client experience.