Issue link: https://www.e-digitaleditions.com/i/149047
Contingent Labor would be talent attraction in highly competitive markets and labor categories. We've also had clients come to us asking for these services as they are forecasting labor demands for a new product launches and even guidance on talent markets for new site locations." MSP providers benchmark both average bill rates and supplier performance quality with a keen eye focused on talent excellence. Since many clients that leverage MSP operate worldwide in different markets, this perspective takes into account the differences in rates and supplier performance on a market-by-market/geography-by-geography basis. Inside Out When it comes to superior benchmarking, data depth, accuracy and quality are paramount. IMS Health's supplier metrics, for instance, comprise the entire engagement process. "I'll look at the entire work lifecycle—how many responses we were provided for a given position over a certain time period, how many candidates were short-listed, how many actually got to the interview stage, and how many were placed in the particular job and whether or not they stayed full-term to complete the assignment," Ure says. "Finally, we examine whether or not they received a positive review when the assignment ended. I examine this entire sequence whenever we evaluate our suppliers." Comparing average bill rates to similar sized firms also is critical. When Ure worked at Johnson & Johnson in a similar capacity, the company operated at the pure bill rate level, i.e., there was less concern about the markup charged by suppliers. "The way we do it here is to have a fixed markup with the supplier so I know what the profit margin will be—in other words, I know the math," he says. "So the focus is more on the pay rates, which ensures that we have rates at market or just slightly below market. That's why it's crucial for the MSP to pull market rates for the pay rates from a benchmarking standpoint. We want to be sure the rates are accurate." He adds, "It's really a mix of art and science." Erin Fortunato, vice president of managed services operations at Yoh Services LLC, a Philadelphia-based MSP provider, says the value of organizations like hers is its ability on a quarterly basis "to roll up all the results with regard to each supplier, then drill into their individual performance to determine which ones are consistently outperforming others." The ability for an MSP provider to cull this supplier information and disseminate it to the clients it serves is the "foundation of the benchmarking services we provide," she adds. "Benchmarking is only somewhat actionable; it's the deeper analytics we provide on the metrics that respond to client questions and assist them to change behaviors." —Elliot Owens, Volt Consulting Volt has a similar value proposition. "We have a substantial data warehouse that contains wide-ranging data on all our clients, and that's the number one source for our benchmarking information," Owens says. "We also collect data from the marketplace, but cannot tell you what that is, as it is our `secret sauce.' In either case, the important thing is to ensure information accuracy by cleansing the data before analyzing it." Guidant Group also taps internal and external data sources in its benchmarking process. "We feel that this the best approach as it provides a fair balance of data," notes Zarkadas. "Approximately 75 percent of the spend that we managed is managed through our proprietary VMS tool which allows us to provide deep analytics in and around our client's business environment. The third-party tools that we use allow for triangulation of the data that may not be available within our client programs as well as validation of the data that is available." Benchmarking alone does not drive better decision-making, the observers agreed. As Owens puts it, "Benchmarking is only somewhat actionable; it's the deeper analytics we provide on the metrics that respond to client questions and assist them to change behaviors." Sajdak from Hillshire Brands agrees: "Benchmarking ensures we are consistently provided the best available talent, helps assure we are achieving competitive prices and paying competitive wages with respect to our competitors, and, most importantly, are achieving industry-leading performance." Russ Banham can be reached at www.russbanham.com JULY/AUGUST 2013 | www.hrotoday.com [45]