Measuring Performance of Workforce Supplier Networks

Supplier performance management is one of the most important practices employed by workforce managers pursuing continuous improvement within their services supply chain. What follows is a brief overview of effective methods for rating workforce talent supplier performance. We’ll also cover how to capture and interpret metrics indicating success and failure.

Effective Managed Service Providers (MSP) for workforce management habitually produce ratings of all the staffing suppliers they engage. These ratings are a critically important indicator MSPs use to measure success or failure.  The cumulative supplier base rating (the average of all suppliers’ ratings) is often considered an accurate indicator of the success or failure of the MSP Program itself. So, it is important that these ratings are properly performed and interpreted.

Suppliers can be rated in numerous ways. For example, Market Share ratings examine the percentages of spend over a given period of time. These buckets of spend can be broken down to rate suppliers within a program. However, it becomes more challenging to fairly rate suppliers on market share alone when a program manages several different support capabilities within multiple rate levels. Performance ratings may better be performed overall, across an entire business enterprise. A supplier optimized for success across multiple clients is a valuable partner and represents a more all-encompassing means of rating the workforce supply base.

Rating suppliers by placements and headcount is another strategy. The value of this rating emphasizes the ultimate goal: making placements and helping qualified candidates find purposeful employment regardless of bill rates.

Workforce Supplier Scorecards

These are a best practice for any and all rating strategies. A good workforce supplier scorecard incorporates the above measurements and more into supplier rating analyses. Scorecards generally include three or four main categories: Cost, Quality, Responsiveness and Speed.

Cost Metrics

Cost metrics are useful for measuring billing or rate compliance and may include Market Share percentage of the program.

Quality Metrics

It is crucial to rate the quality that each supplier is bringing to the program. This can mean candidate quality (i.e. is this a valuable supplier that can source and submit what the customer is looking for?) Quality can be measured in a number of areas such as the submit-to-interview ratios, volume of interview no-shows, interview-to-offer ratios, submit-to-hire ratios and percentage of starts. Worker quality is another useful quality metric for determining which suppliers are best at putting quality candidates on assignment. Some examples of worker quality measurements include, performance terminations in first 30 days, performance termination ratios, average evaluation scores and first-month completion rates.

Supplier Responsiveness

Measuring supplier responsivenes will help with participation rating. These metrics require examination of response rates and response volumes. Although a supplier may provide quality candidates and attractive prices, if they are only filling 15% of the total requisitions they’re issued, this can still represent a performance issue and the spend they’d receive might be better allocated to a supplier with solid cost and quality who responds at a much higher rate.

Speed

These metrics focus on how quickly a supplier responds to the customer’s needs with quality candidates. The relevant metrics to gauge the speed of a supplier can include time to first submittal and first day submittal ratios.

Whatever means and methods a program may employ, the bottom line is that MSPs live and die by supplier performance, making the measurement thereof incredibly important.