One of the initial goals of a contingent workforce program is to optimize its provider portfolio — taking a lengthy list and distilling it to a more manageable number, say to 20 providers from 100. After the benefits of such a move are fully realized in terms of partner responsiveness, risk management and program policy compliance, cost-effectiveness and service delivery quality, it’s time to take the next step. But if the optimal number of partners has already been reached, especially with tiered and niche players, what can be done?
One concept takes a page from some companies’ internal talent management policies: replacing some of the lowest performers each year with some energetic new players in the optimized, staffing partner portfolio, with the bottom performers identified by a fair, well-informed performance ranking evaluation process.
The fact is some staffing providers are not structured well to compete in an optimized CW program. Some simply are more successful in one-on-one retail staffing orientation versus a corporate account managed engagement. Both staffing provider delivery structures are perfectly viable in the marketplace, but not necessarily competitive in a professionally optimized CW program.
Results from Staffing Industry Analysts’ annual buyer survey indicate that such a strategy is gaining interest in the marketplace today. While the use of staffing provider consolidation/optimization has remained strong (see chart), the share of buyers trying out new staffing partners has grown each year since 2011. Clearly, infusing the program with new staffing providers presents an opportunity for those energetic staffing firms.
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Source: Staffing Industry Analysts’ Workforce Solutions Buyers Survey 2016
The ranking process. Via a scorecard, the CW program gives staffing partners visibility into their performance and how they rank against other suppliers, and offers competitive responses and areas for service performance improvements — especially if incentives and recognitions are available for leading periodic performances. These typically take place quarterly.
But some staffing partners/providers don’t improve their performance over time or just can’t compete with the higher-performers. And if that’s the case, those suppliers are taking a seat in the portfolio that could be put to better use. So, at some designated point in time — after a fair evaluation has been visibly communicated and openly discussed — cut the ties and create an opportunity to invite new staffing partners to join the program and take the optimized competition established to a higher level of talent staffing service performance.
The incentive method. There are also other ways to boost provider energy and performance besides contractual deselection. Such incentives may include staffing partner recognition programs (internal and external); directed exclusive requisitions (staffing partner tiering enhancements); added business opportunities/additional service lines; and service-level agreement incentive bonuses.
Keep the stars happy, too. Staffing partners already doing a good job or performing as agreed may not always warrant special or enhanced recognition. However, those that consistently demonstrate excellence that advances the overall program goals may warrant special recognition — and that recognition provides a further boost to your program: Staffing partners tend to provide a better Net Promoter Score to MSP programs that include at least some minimal incentive programs.
While it is important to have clear consequences and resolutions for non-performance, successful programs often include staffing partner rewards and incentives as well. A robust contingent workforce program is one where participating staffing partners are managed with not only the stick but the carrot as well. But when all is said and evaluated, the next level of partner service performance may be with a new staffing partner that has not yet been given the opportunity to compete within the optimized staffing partner portfolio. This might mean a current, noncompetitive staffing partner needs to part ways with the program and be successful elsewhere.