Circumstances are definitely shifting to the positive in labor markets. Hiring in both traditional and contingent work are approaching pre-recession levels, as is the unemployment rate.

As such, the market supply-to-demand ratio is changing and the leverage buyers had over the past several years may be shifting toward neutral. In other words, staffing firms will soon start to have more economically favorable choices for where they place their top-quality talent. The IT staffing marketplace, in particular, is a solid example of this shift.

So what is the shape of your partnership with your staffing partners? One definition of partnership is an arrangement where the parties agree to cooperate to advance their mutual interests. Hence, how are the wants and needs of your key contingent workforce (CW) program stakeholders being met to support mutual interests? How can they be improved? Raising bill rates and margins is not the immediate answer; rather, consider revisiting the strategic role your providers play in the program or auditing the competitive nature of your CW program — make it easy for your providers to participate in your program.

The CW program management model has provided great optimization focus, managing hundreds of billions of dollars in CW spend while controlling and mitigating risks. This occurred during economic periods of buyer market leverage and the application of professional sourcing best practices with process enabling management technology innovations.  But how do CW programs operate in a more competitive talent market where staffing partners and CW talent have more choices on where to engage their skillset capabilities?

Clearly, the tracking of the theoretical supply/demand ratio needs to be understood in some practical sense.  Accessing up-to-date market data on skillset supply levels and rate movements will be increasingly important to execute competitive quality talent sourcing decisions. But tightening up the relationships with your key staffing partners across multiple components is quickly becoming an imperative.

Key staffing partners could start to stray to other market choices because of higher potential returns due to increased bill rates and/or margins. But smart optimization investments in enhanced partner engagement management can also serve as equally competitive drivers when staffing partners are making decisions on where to spend their resources and place their best talent.

For example, the quarterly business review process may make a big difference in the mind of your providers. It should never be used to shame them by focusing only on a staffing partner’s service deficits.  Its agenda should be expanded to focus regularly on how to enhance the CW program’s ease of doing business and drive change/program enhancements that are solely originated and focused on enhancing the staffing partner’s comparative experience with the CW program itself. One way to increase the “margin” experience of staffing partners is to cut the cost/hassle of doing business with the program and optimize their servicing efforts and results.