Why Clients Should NOT Source Their Own Contract Talent
There are 3 compelling reasons why clients should NOT source their own contract resources, Price, Governance and Risk:
“Competition is always a good thing. It forces us to do our best. A monopoly renders people complacent and satisfied with mediocrity.” Nancy Pearcey
· At first it seems counter intuitive, but if you think about it, the competitive process will almost always give you the best price.
· Our experience at Eagle would demonstrate that “client sourced” contract resources cost 10% more, on average, than contractors sourced in a competitive process. Don’t take our word for it, do a little investigation yourself!
· Experts offering “shop in your own database” options sell their clients on the concept of saving agency fees. Don’t get blind-sided. What matters is what you actually pay all-in, not what you pay the agency
· A hiring manager who identifies a contractor to do some work has a vested interest in their success … that can create governance issues.
· Will they be subjective that they are choosing the best person for the job?
· Will they be willing to make tough decisions as quickly as an agency sourced contractor who is not performing?
· Will they negotiate the best rate or just pay what the contractor asks? (Part of the reason for the price differential.)
· In Canada the CRA are very interested in contractor relationships. If you sourced the person and pay them then are they your employee?
· Do all of your hiring managers truly understand the risks associated with contractor mis-classification?
· Do your processes fully protect your company?
“Data beats emotions.” Sean Rad
If those “compelling reasons” were not enough, then consider this
The staffing industry is a $13 Billion industry in Canada designed to find talent for their client in a hyper-competitive market.
- Do you want to recreate that capability within your organisation, or should you focus on your core capabilities?
- Will your internal sourcing be as competitive as companies designed solely for that purpose?
- What is the cost of your internal recruiting organisation?
- Do you measure that cost against “saved agency fees” or against “reduced contractor spend”?