CWS 3.0: July 15, 2015

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Supplier selection: Buyers shift focus to worker quality over costs, risk

With steady economic growth conditions creating fierce competition for the best quality talent in the marketplace, it’s critical to have the right staffing partners in your program. Meanwhile, strategic maturity and priorities of contingent workforce (CW) program leaders are shifting to focus more on competitive talent resource management than just spend control and risk mitigation. So it is no wonder that recent research from Staffing Industry Analysts found worker quality was the overwhelmingly the number one selection criteria for choosing staffing partners.

We asked buyers of contingent labor to identify their single top staffing partner selection criterion as well as their top three criteria. The former is a measure of intensity with respect to such criteria, and the latter is a measure of breadth. Worker quality was the top consideration for 53% of survey respondents, and 78% selected it as one of their top three considerations.

 

This is remarkable given procurement dominates the staffing partner selection process. More than two thirds of buyers (69%) participating in this research said procurement from corporate/headquarters plays a lead role in selecting staffing partners with forty-nine percent of buyers reported that HR from corporate/headquarters take a lead role. One might expect procurement professionals to respond with a bias toward cost control and risk mitigation, but once these program characteristics have been managed, high-preforming procurement professionals are some of the best quality managers in business, whether it is securing materials, parts, BPO services or talent.

Service quality was the second most popular response among buyers, with 38% selecting it as one of their top three considerations. Speed and low cost were also popular selections criteria. But ultimately, there’s a significant gap between worker quality and all the other considered staffing partner selection criteria.

Measuring quality. This leads to the question of how one effectively and objectively measures talent quality comparatively among staffing partners. Most CW programs have solid, defined controls around spend and risk mitigation, but not so much on measuring and driving talent quality performance.

There are some well-established service-level agreements and key performance indicators that can help in measuring talent quality. They range from percentage of engagement managers who say they would rehire a contingent worker; to full-time conversion rate levels; to the percentage of screened candidates submitted to engagement managers that are ultimately onboarded/engaged.

Another perspective is seeking engagement managers’ satisfaction levels with the CW talent quality they have engaged. In most cases, if satisfaction levels with CW talent is measured at all, it is typically done at the end of an assignment. But better, more extensive examinations of talent quality methods measure over the lifecycle of the CW engagement. One way to do this is leveraging quick, short simple survey tools (e.g., Net Promoter Score methods) which will generate the data needed to measure CW talent quality levels, sources and trends.

As I noted in a previous Contingent Workforce Strategies 3.0 article, “Buyers’ market no more: Time to upgrade the partnership,” hiring in traditional as well as contingent work are approaching pre-recession levels; so is the unemployment rate. Hence, the competition for top-quality talent is going to be very intense for years to come. The question is, how does one set standards for your organization’s talent quality expectations and then execute, monitor and manage it? Communicating and incorporating these quality standards with staffing partners is going to be critical but will also be a competitive effort.

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