Contingent labor programs that treat suppliers as untrustworthy enemies ultimately fail. Where suppliers are engaged as a valuable extension of the program, ALL the good things can happen.
We’ve all seen them — old school, “no hiring manager contact” contingent labor programs. Suppliers scramble to upload candidates into a vendor management system (VMS) job order to hit an arbitrary speed-to-submittal metric, crossing their fingers that their awesome candidate matches their best guess about what the hiring manager actually wants and needs (by the way, managers don’t always know what they want and need, so they might be guessing too). And listen, we understand the original intent. These ‘no touch’ programs were designed back in the day to promote vendor neutrality. For those of you who are new, vendor neutrality is supposed to mean a level playing field for all suppliers but has somehow been hijacked to mean nobody can talk to anybody. There was supposed to be the added benefit of protecting hiring managers from an onslaught of suppliers, wandering the halls, disrupting hiring managers, and schlepping their wares (cue the scary music). But here is the problem: they rarely work. And for niche or highly-skilled roles, they work even less. The worst part is that there are unintended consequences that could be costing you.
“Vendor neutrality is supposed to mean a level playing field for all suppliers but has somehow been hijacked to mean nobody can talk to anybody.”
Roles these days are increasingly complex. Managers require a recruiter who speaks their language, asks good questions, consults with them, and then quickly adjusts candidate submittals based on evolving needs (so, like customer service?). In a blind, no-touch program, this isn’t allowed to happen, and hiring managers become frustrated. They find alternative ways to engage talent, and they work around the program. The category spend is smaller, suppliers stop putting their best recruiters on programs, MSPs miss out on revenue, the customer opens themselves to potential compliance risk…and a zombie apocalypse ensues (okay, maybe not, but stick with us for a moment; we’re on a roll).
So here’s the deal: when your program is designed to include some level of hiring manager contact — you will win. Your best suppliers will engage and help drive volume through the category. If you are an MSP, your program revenue grows, your fees increase, your customer is happy, and they keep you. If you are a client sponsor, you mitigate risk and realize cost savings for your organization. Either way, you save the day from the staffing version of a zombie apocalypse. Everyone wins.
This is probably making total sense so far, but you may be asking if we can prove it? Yes (and thank you for asking)!
As the largest creative and marketing staffing firm in the world, we are currently in 157 programs through 24 MSP channel partners globally. We measure 22 key metrics, including hiring manager engagement. That’s a lot of data.
You might assume that our programs are bigger the more hiring manager contact we have, and you are right! In fact, our average revenue in a program with unrestricted hiring manager contact is 14 times larger than our no-touch programs. “Okay, well, that’s great for you, Aquent, but how does that help anyone else?” you say (again, thank you for asking). So, forget about how much bigger the program is for us. What’s most compelling is the increase in order volume in those programs — orders that go to all the suppliers. Take a look:
Hiring manager engagement, by the numbers
- 15% of our programs still fall into this no-touch type. Last year we saw less than one order per month in these programs. Guess what happens when a staffing firm gets one order per month? You got it — that program doesn’t get our best recruiters. And because we can’t predict volume or role type, they also don’t get our best talent. The hiring manager loses, the MSP looks bad (again with the zombies).
- 73% of our programs have modified contact. The order volume more than triples with even minimal hiring manager engagement. In 2020, during a pandemic, this equated to 25 additional orders in our category, $2.9M in incremental category revenue, and $74,000 in additional MSP fees. That’s per program. Multiplied by dozens and dozens of programs (okay, Aquent, you are onto something here). But wait, there’s more…
- 12% of our programs have unrestricted contact. These are still vendor-neutral programs with submittals going through the VMS tool, mind you. But in these programs, the order volume is EIGHT TIMES that of a no-touch program. We’re not even going to do that math for you, but trust us — it’s a lot.
In programs where we have unrestricted hiring manager contact the order volume is eight times greater than a no touch program
“I am shocked and amazed, you guys are so smart. But now what do I do?” you say (aww, now we’re just blushing)…Well, we are going to tell you.
How to save the day.
Ask yourself this simple question: Do we believe there are workers being engaged outside of the contingent labor program?
- If the answer is NO — congratulations! You are in an exceptionally small group. (Or possibly in a state of denial, we aren’t here to judge.)
- If the answer is YES — read on (hint, the answer is probably yes. Trust us).
Learn more. Engage your best suppliers in meaningful dialogue. They probably know a lot about your program. At Aquent, we have very sophisticated ways of predicting spend opportunities in our space. (And we aren’t even that fancy.)
Try it. Open your program to some level of hiring manager engagement. You can set goals and ground rules, and you can even start small. But don’t miss out. In one recent example at Aquent, we were able to triple the size of the creative category in 18 months (feel free to reread that if you like, it will still say TRIPLE).
There you have it. You’ve let go of the past, and your contingent labor program can now thrive and grow. All that’s left is for you to revel in the fame and glory that you will receive for being modern, smart, and forward-thinking. And you really deserve it — after all, you DID just save the day!
This is the first part in a series on disrupting relationships with suppliers in contingent labor programs.