The goal of contingent labor procurement is to obtain the best people available at the best wage. This newsletter is the second in a three-part series on how to achieve this:
An Advans white paper, http://www.advansit.com/docs/Staffing_Managed_Service_Providers.pdf details exactly how MSP’s and Outsource Staffing Vendors drive up costs and provide poor candidates.
Outsourcing vendors utilize consultants that receive a salary on a W-2. Unless those consultants are billing a customer, the vendor is losing money. Frequently, an outsourcing vendor will place unqualified consultants from their bench with a customer to avoid a loss, i.e., a practice known as “Warehousing.”
By the time the customer realizes the consultant is unqualified, the customer has been billed for several weeks. During that time, the outsourcing vendor will try to place that consultant elsewhere. The consultant then hops from one customer to another, billing a few weeks at a time, until a suitable position comes along. The Outsourcing Vendor’s customers end up paying for nothing in the meantime.
Eliminate Warehousing by having your own Preferred Vendors that subcontract consultants. The Preferred Vendor simply sources the best qualified candidates without fear of suffering a financial loss.
Customers need only a few Best Practices when employing subcontracting Preferred Vendors:
The end result is that the customer gets the best qualified candidates at the best available cost.
The next newsletter in the series will focus on how to leverage technology to manage subcontractors and maximize contingent labor results.