At the heart of every contingent workforce program is a sourcing model framework, the structure that defines critical elements on how the program is organized, governed and performs.
But as your program and the marketplace evolve, you should revisit your framework to ensure it still aligns well and closely supports your program’s goals and objectives. If not, how can it be changed to bring it back into alignment with the program’s mission and goals?
This sourcing model framework review would be a good time to assess whether some new elements need to be considered as well.
So what does a framework look like?
Framework 101. A sourcing model is the method by which a company identifies, selects, receives and pays for contingent workers and related services. Companies may employ more than one sourcing model within a contingent workforce program. The sourcing model framework describes critical choices for sourcing model strategies and components.
Some of the high-level definitions, and the nature of the landscape are changing, calling for new talent sourcing models and competitive approaches. In revisiting your framework, you will need to break down the elements and attributes of your program. For the purposes of this article, I will focus on one common sourcing model: the managed service program.
The most common managed service program models and their primary focus services are:
- Master supplier –recruiting services
- Vendor-neutral, competitive bidding MSP – supply-chain management services
- Hybrid programs –recruiting services and supply chain management services
Sourcing Model Attributes
Now, when designing or revisiting the managed service program model, these strategic attributes need to be considered, along with their related elements (see image):
- Rate elasticity – how rates vary per requisition/order
- Competitiveness – number of suppliers and the distribution of requisitions/orders
- Vendor integration – degree to which external resources are used to administer the program
If we take a closer at each of these strategic sourcing model framework elements, we find different approaches on how to implement each one depending on the CW engagement application used. And different approaches can actually occur within the same CW program across all three strategic sourcing model framework elements. However, rate elasticity, competitiveness and vendor integration are just three model attributes you should be considering as you evaluate your CW program sourcing model framework.
Rate elasticity describes the degree to which CW demand affects rate/billing methodology and can range from the most fixed to most open and can include the following examples:
- Fixed rates per job title
- Pay ranges plus markup
- Max bill rates
- Open bill rates
Competitiveness describes the degree to which staffing partners are invited to bid against each other with respect to submission time, candidate quality and price. SIA research has shown that the most common model chosen was staffing partner primaries, which allow for some competition among staffing partners while still allowing buyers to achieve discounts through large spending volumes.
Options on this axis, from least to most competitive, include:
- Sole source (master vendor)
- Primaries
- Structured tiers
- Vendor-neutral bidding
Vendor integration is the degree of external resource integration with your CW program management. Options from least integrated to most integrated include:
- Internal resources
- Off-site process admin support
- On-site process admin support
- Total program outsource (as programs employ external tools such as a VMS — they expand toward total program outsource).
Contingent Worker Type
You should also consider the impact on the sourcing model application based on the type of contingent worker being engaged: traditional staffing partner talent, independent contractor and/or maybe even SOW project/services talent. And what about the talent-sourcing channel being leveraged to secure the CW talent needed in the CW engagement? This could range from, again, traditional staff partner sourcing channel to direct sourcing and/or an on-demand staffing platform.
Regardless of your needs and your framework, in the ever-changing CW marketplace, it is important to stay on top of the innovative tools available to you to optimize your program.