Many companies make the mistake of setting the supplier relationship up to be adversarial. But at the end of the day, companies need their open spots filled quickly with a great candidate at the right price.

The staffing supplier is your conduit to this.

A highly competitive market for talent means getting the attention of your suppliers is increasingly critical. Engaging them as partners in your talent acquisition approach is key and will benefit both parties.

A good relationship leads to a stronger marketing effort from recruiters to candidates. A recruiter may be supporting multiple clients; when there are several opportunities on the table for a candidate, the recruiter will steer them toward those where they have the best partnerships and the best engagement, explains Chris Paden, director of contingent workforce strategies and research for Staffing Industry Analysts. They want to know their candidate will not be put in a “black hole,” will fit in with the company’s culture and will find the work exciting.

Supply Rationalization, Fee Structure Review

Paden suggests supply pool rationalization, improving communication and examining your fee structures to build strong partnerships. Get your suppliers’ attention by keeping fewer providers in your base — and then give them more opportunity to create volume discounts at the back-end.

“Figure out what the right number of suppliers is for your organization as opposed to keeping a revolving door,” Paden explains. This involves examining suppliers’ past performance and future capabilities.

Redesigning fee structures is another consideration. Some enterprise buyers leverage fees for things such as early payment and tenure, but the reality is a supplier figures out where all those fees are and builds them into their margins.

“Think about a more thoughtful partnership model,” Paden advises. Offer to be a partner and provide the opportunity to grow their scale across your organization if they meet certain criteria and cross certain thresholds, which will be easier for them to do if spend is distributed to have higher volumes across fewer suppliers.

‘Three-Legged Race’

Communication is the biggest component to building a strong partnership. “Suppliers want feedback,” Paden says. “They want to know how they are doing.” Be transparent and straightforward about expectations and use metrics to help create a roadmap to end goals.

Make sure you have consistent processes for both your suppliers and those managing your programs so everyone involved knows the process steps and timelines. Get clear, detailed requirements for job requests and create opportunities for suppliers to engage directly with the hiring manager or ask questions about the position.

Your supplier needs to know everything it can about that environment and that customer, explains SSI’s Mark Farbman, VP of sales at SSI, which provides IT, engineering and professional staffing. It goes back to the tightening of the labor market. “We need to be an advocate for that company.” That means knowing the company culture and what makes it a good place to work, the “bells and whistles,” so they can sell the client company to the candidate.

Southwest Airlines’ program is internally run, with direct relationships with the suppliers. “When we set this up, I always tried to forge a relationship between the staffing suppliers and my team that was running the program with the visual thought of a three-legged race,” says Greg Muccio, director of talent acquisition at Southwest. It was incumbent on the two groups to try and work together in order to win.

In order to ensure it has the best recruiters on its account, Southwest touts its culture and the work environment as well as the transaction transparency and the timely feedback it provides recruiters to help them improve. Southwest holds face-to-face meetings with all its suppliers and creates a “level playing field” by ensuring all involved get the same message by effectively communicating.

“I strongly encourage both teams to spend time with each other,” Muccio says. “We were very open and proactive about having our vendors come out and showing them around, making sure they had a really good understanding of the environment and the culture and those kinds of things that are important to us so that they get that part right, but also so that they can sell it appropriately to the candidate.”

Supplier Forum

Paden has “mixed feelings” about performance reviews. While the quarterly business review, or QBR, makes sense for programs that have a large numbers of suppliers, the conversation should spill far beyond that for programs with only a few suppliers.

“The QBR has become more of a formality in my mind,” Paden says. “The real value of a QBR is sharing roadmaps, sharing upcoming hiring needs, sharing things that are happening within the business that impact hiring.” He suggests creating more of a “supplier community forum” on a quarterly basis. This allows suppliers to better filter their candidates and advise them on a client’s environment, culture and projects. The more you can bring them into the conversation as opposed to just making it about a scorecard on their performance, the better.

It’s time to transform the performance management review into a more strategic component of overall partner management, says Stephen Clancy, SIA’s senior director, contingent workforce strategies, knowledge and research. The key is to create a more valuable dialog that enables both parties to focus on quality improvement of the business and future opportunities to build a more capable and highly valued CW program.

But regardless of how you get feedback, all stakeholders need to be truthful to improve a program, says Dawn McCartney, VP of SIA’s CWS Council. Providing the forum to encourage forthrightness will take some work, but is necessary, and worth it.

You ‘Get What You Give’

You “get what you give” when working with suppliers, says Muccio. So, to create that win-win scenario, be as transparent as possible and set them up for success. Then you and they will be beneficiaries.