Are you paying too much for your temporary help? If your organization is working with a wide array of staffing partners, the answer is likely yes.
At many companies, an inconsistent, patchwork approach to hiring contingent workers has evolved over time. While such a system may provide a high degree of flexibility and autonomy from department to department, it also comes at a price in terms of cost and efficiency. Procurement professionals and hiring managers would be well-served to consider other staffing solutions that offer greater consistency and efficiency when hiring contingency staff.
An end-to-end solution
Indeed, a more cost-effective and efficient approach could be to work with a “master vendor” that partners with your team to develop a comprehensive strategy to meet contingent staffing needs. While the move requires buy-in from different parts of the organization, a master vendor typically delivers the best return on investment while also creating more consistency across the organization, reducing risk, and freeing up more time to for managers to focus on strategic business goals.
“The master vendor acts as the comprehensive workforce manager and business partner,” says Nichole Spaight,Vice President, Sales, North Central Division at Adecco. “They handle all aspects of hiring, screening, testing, performance management issues, providing productivity metrics, supplier management and working with the client to bring in and retain the right talent. It is an end-to-end solution.”
Gaining in popularity
The master vendor approach is seeing a resurgence as organizations recognize the organizational and financial benefits. A recent survey by Staffing Industry Analysts found that the use of master suppliers as primary supplier management model increase significantly in recent years among organizations that spend in the less than $100 million range. Also, in 2013, 33% of firms with contingency-worker programs of less than $20 million used master vendors as their primary means to secure temp workers, up from 12% in 2009.
A master vendor program can be customized to meet a client’s specific needs. For instance, a master vendor agreement can include a technology component that can add efficiency and automation to the hiring process. However, a technology component can also add to the overall cost of the program — and some workplaces may benefit more from a traditional hiring process as opposed to relying too heavily on a technical solution.
When executed effectively, a master vendor program can create substantial savings. For example, Adecco recently helped deliver $3 million in annual savings to a $16 billion health care and consumer goods conglomerate with 150 U.S. locations. The savings were largely fueled by a focused bill rate and disciplined overtime management.
Find a champion, be a hero
The key to master vendor success, says Spaight, is to do the necessary research into the current state of contingent hiring in your organization, and calculate the associated costs. Then develop a business case for change and establish a plan for communicating with all parties that will be affected.
“For a master vendor relationship to be successful you need a champion,” Spaight says. “It needs to be driven by senior leadership. You can’t have rogue departments that are not on board — that will end up driving up costs and undermining the program.”
Depending on the size of the organization and the complexity and scale of the effort, implementation can take from 30 to 120 days. While the transition includes considerable change, people quickly begin to see the many benefits of the approach.
“Overwhelmingly you find that people feel like they are getting hours and hours back because they are not coordinating, educating and managing multiple staffing vendors,” Spaight says. “Typically, if it is done right, this makes the procurement department a hero in the organization.”