Can I please talk to the customer?
Imagine that you want to buy a car but you’re not allowed to speak with car dealers. You can only speak with a dealer’s third-party intermediate, which doesn’t make or sell cars. The third party’s knowledge about cars is limited, and it doesn’t tell you what company the car is coming from.
On the other side of the potential transaction, the dealership receives limited information from the third party about what you, the car buyer, want. The third party tells the company that the customer wants a red car with automatic transmission, six cylinders, and a sunroof. But what about other features? Fuel efficiency? Safety record? Performance? Two- or four-door? Quality rankings as compared to other car companies? None of this information is on the order requisition that the third party sent. And the company is not allowed to discuss this with the buyer directly, or else the third party will never give them a car order again.
Sounds crazy, right? But isn’t this exactly how the majority of MSP programs operate? There is a better way to buy a car, and there is a better way to procure talent.
I know of a self-managed MSP that has tremendous success. The secret? The company has a large program with over $100 million in spend, but a small vendor list of preferred suppliers (no more than five per labor category) and the company allows suppliers to contact the hiring manager.
The MSP still provides tremendous value. The program tracks suppliers’ performance, provides suppliers with feedback, handles compliance, advises on co-employment issues, provides consolidated billing, and administers the third-party VMS system. And when it comes to recruiting on a job order, the program lets the staffing vendors communicate. The result is high supplier engagement and high internal program satisfaction.
There are three main reasons why companies allow MSPs to limit communications with hiring managers, and sometimes advocate it.
- The company feels that the program won’t be vendor neutral if they allow contact.
- The company’s supply base is too large, and it’s concerned that managers will be contacted by too many vendors, and the managers will complain.
- Company leadership believes that it gets better pricing because it thinks that a vendor doesn’t have to invest account management resources if the MSP distributes all job orders and manages the entire process.
But there are many drawbacks to setting up walls between suppliers and managers. Here are just five examples.
- The practice results in less-detailed job descriptions and a whisper-down-the-lane approach to feedback — both of which lengthen time to fill.
- Companies will have less pressure to rationalize their supply base.
- The lack of communication creates an unengaged supply base that will put best resources elsewhere.
- If the MSP also supplies, this creates a concern among the supple base that the playing field isn’t level.
- The system results in the company having a strong relationship with its MSP provider but a very weak relationship with its supply base.
So before you limit the interaction between managers and suppliers, take the time to weigh your reasons for doing so against the many potential drawbacks. This will help ensure the success of the MSP program.
Now, can someone explain why I can’t fit my kid’s car seat in my new car?
Mike Gamble is Vice President of Life Sciences Talent Solutions at Yoh.