Workforce solutions should be about cost and value
Many companies with existing workforce solutions, such as a managed staffing program, wonder whether the solution is cost effective. However, when evaluating your workforce solutions, make sure you think about cost and value.
Cost is usually the number one reason most companies choose to adopt a managed staffing program. The goal, in many cases, is to control or restrict rates, thus saving money compared to rates paid in the past. It seems simple, but one of the reasons there’s still confusion about savings is that reducing rates (generally in the first year of a program) can actually diminish savings or allow costs to creep back in.
For those looking for continued cost savings after the first year, here are some questions to ask:
- Are there still exceptions to the use of your program? Departments can add costs if they don’t use the managed staffing program and use independent contractors or continue to rely on consultants.
- Are you doing the work for your MSP? Some companies maintain the costs for internal positions and departments that keep an eye on the managed staffing provider (MSP). While it might seem necessary, a well-run program shouldn’t need a watchdog.
- Are you using the data from your reports? In our experience, most companies ask for volumes of reports in an RFP, but typically use only one or two. Make sure you have the reporting you need. More importantly, make sure you are acting on the information in the report.
- Are you still using too many vendors? It takes time and effort to manage multiple vendors, even through an MSP. Volume discounts or performance incentives can also be lost when spend is spread too thin.
For many companies, especially those with mature programs, the question should not be about cost as much as it should be about value. While you certainly want to continue to manage costs, today the emphasis is on finding and keeping the best talent available, and a workforce solution should first and foremost provide you with quality talent. That’s the true value of a managed staffing program.
Here are some questions to ask to evaluate the value you get from your workforce solution:
- Are MSP hires of the quality and level your hiring managers expect? Having the right talent to complete projects on time saves you money. It also gives the hiring managers confidence and makes their jobs easier.
- Do contract employees complete their assignments? When a hire has to be replaced, your hiring managers will spend time and effort to interview new candidates and get them up to speed, which is like doubling your recruiting costs for that position.
- Do your hiring managers spend less time on sourcing? One of the hidden costs of an MSP is the time hiring managers spend on the sourcing process. While some managers insist on being involved, others simply spend too much time talking to and screening unqualified candidates.
- Are candidates available when you need them? This is probably the most important. If you have to wait, projects can be delayed and your company might not be able to capitalize on growth opportunities. Also, no matter how much you save with low rates, if you can’t get the people you need, those hard savings are ultimately offset by higher soft costs (such as the ones mentioned above).
Value is about creating a workforce that is flexible, responsive, and easy to handle. A workforce solution should save money and continually provide value, which ultimately means that it provides the right talent when you need it.