Arjun Dutt, Senior Business Intelligence Consultant, FieldglassPrint This Page
The methods for evaluating success in a contingent workforce program are endless. With seemingly never-ending options of tools, reports and data, it can be overwhelming to determine where to start and what exactly to measure.
Vendor Management System (VMS) is an application that acts as a mechanism for businesses to manage and procure both Contingent Labor and Statement of Work (SOW) projects. It provides further value by allowing visibility, analysis and evaluation of a flexible workforce. Highlighted below, learn how some Fieldglass customers took a non-traditional view of program metrics and were able to uncover new opportunities for efficiency, quality, cost savings and compliance.
Uncovering Program Efficiencies Creating program efficiency is a top three goal for nearly every organization. Many automatically place the onus of reducing cycle times on the Program Office (PMO), or more frequently, onto the supplier. These organizations often fail to investigate how they contribute to higher processing times. By taking a closer look at their distribution workflow, one multi-national corporation in the internet products and services industry was able to create substantial productivity efficiencies.
This organization’s program is set up for steps in the process to occur one after the other, with each step dependent on the previous.
To reduce cycle times without risking losing quality candidates, a parallel distribution workflow was implemented. Suppliers could start sourcing candidates against a requisition while financial approvals were still in process. Hiring managers could review the candidate pool and make a selection while the approval cycle was being completed. The new workflow was implemented quickly and about a year later, the customer reduced cycle times by three days. Multiplied across 1,000 hires that year, the productivity savings were tremendous.
Evaluating Quality Can Be Difficult, But Worth the Effort The most common measurement of quality is the comparison of positive attrition to negative attrition. But measuring only temp-to-hire conversions doesn’t allow a company to proactively address worker quality issues while they are still working.
A global financial institution recently discovered that negative attrition percentages for the program were increasing by three to four percent every month. In looking at the data, we discovered that the problem laid in the company’s rate cards; suppliers were not able to effectively find the right candidates because of restrictive pricing. As a result, this organization implemented a series of checkpoints throughout the process to monitor and improve candidate and worker quality, including these three major process changes:
Rate card flexibility for suppliers
Detailed qualifications for each job requisition
Periodic worker evaluation throughout lifecycle of the assignment
These three process changes led to higher percentages of on-time assignment completions and more temp-to-hire conversions. The company was also able to successfully improve positive attrition month over month while minimizing costs to the program.
Finding Cost Savings in All Corners of Your Program One metric that can be used to identify cost savings at a more granular level is hiring patterns within the buyer population. During a recent business review, we discovered the rate variance for the same job title and description was unusually large, even when accounting for location-based adjustments.
In response, this large telecommunications company implemented
Fieldglass’ Active Rate Guidance, which gives hiring managers access to real-time rate information that can be used to select a candidate. As a result, hiring managers:
No longer hired the same workers with widely varying rates at the same location
Gained visibility into what their peers were paying for the same skill sets and could better collaborate on best rates for workers
Could place contractors in more cost-effective regions, after seeing lower rates at other locations
Over time, the organization saw rate compression tighten significantly and was also able to negotiate better rate terms with vendors. Over the course of one year, the program anticipated an additional six percent in cost savings.
Using a Different Measuring Stick for Program Compliance
Program owners often do not put measurable metrics in place to ensure the program is meeting internal compliance standards. Yet ensuring processes are compliant to internal business requirements will often result in direct cost savings, efficiency gains and quality improvements.
One company in the travel industry recently discovered that within a particular labor category, spend under suppliers was off balance and favored some more than others. As bill rates and costs started to increase, the organization reviewed the suppliers and realized that hiring managers were pre-identifying candidates from specific suppliers, even though the company mandate was to competitively bid positions. The cost of these workers was simply not justifiable to the program.
The following rules were implemented:
Even if a hiring manager pre-identifies a candidate, the position must also be competitively bid to identify opportunities for savings.
When a requisition is sent to suppliers, the distribution must be vendor neutral and the pre-defined list of participating suppliers must receive all postings equally.
The organization set a threshold for the allowed number of pre-identified candidates and required an additional approval process to surpass it.
By forcing most positions to be competitively bid, the customer ensured compliance to its vendor neutrality policy. In addition, the company was also able to maintain its time-to-hire numbers and worker quality targets.
These organizations gained powerful insight into their flexible workforce by taking a unique view of metrics and analysis. A VMS can provide insight to any organization, but often times it’s the approach to using the tools that makes the real difference. To learn more about contingent labor and Vendor Management Systems, visit our
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