How to Become a Preferred Partner to Contingent Staffing Suppliers
Contingent staff and flexible workforces are becoming increasingly important assets for companies intended to compete based on agility and adaptability. According to Forbes, in many sectors, such as the tech industry, it's not uncommon for contingent workers to comprise 40-50% of an organization's workforce.
As such, it's more important than ever for organizations to build strong and lasting relationships with contingent staffing suppliers.
Building strong partnerships such as this can take time, but it may also require internal changes. In this article, we'll explore how a company can become a brand of choice for contingent labor.
The Advantages of Becoming a Preferred Partner
Becoming a preferred partner for contingent staffing suppliers can yield a myriad of benefits that go beyond simply having access to a larger pool of talent.
Access to Top Talent
Firstly, as a preferred partner, you have the privilege of first access to top talent. Staffing suppliers often reserve the most skilled and experienced workers for their preferred partners. Thus, your organization can ensure it is always working with the best in the business.
Cost Efficiency
Secondly, preferred partners often enjoy financial benefits. By establishing a strong partnership with a contingent staffing supplier, you can potentially negotiate more favorable terms, leading to cost savings. This could come in the form of reduced rates for staff augmentation, or better terms for transitioning from staff augmentation to Statements of Work (SOWs).
Streamlined Communication
Finally, being a preferred partner means streamlined communication and quicker processes. The administrative overhead of dealing with staffing is greatly reduced when there is a strong, ongoing relationship between the company and the staffing supplier.
However, these advantages can only be maximized if businesses approach the partnership with a balanced perspective. They must strive to build a mutually beneficial relationship, rather than exploiting the partnership for extreme cost-cutting measures.
This involves understanding the supplier's perspective, valuing their contribution, and ensuring that your partnerships are indeed preferred on both sides.
Understanding the Supplier Perspective
Suppliers are seeking more than just a business transaction; they are looking for a partnership built on mutual respect, trust, and shared objectives.
From the supplier's viewpoint, transparency is a key requirement. They appreciate client companies that communicate their needs and expectations clearly, enabling suppliers to provide better service and meet the company's requirements effectively.
Suppliers also value predictable and timely payments. Uncertainties in payment schedules can disrupt their cash flow management and, therefore, their ability to provide quality services.
Additionally, a sense of mutual growth and development is crucial. Suppliers are more inclined to partner with companies that view them as strategic contributors, present growth opportunities, and offer the potential to expand their business within the client organization.
Contingent Workers Have Changed, Too
It's also worthwhile for companies to consider the experiences of individual contingent staff members as well. Inevitably, these experiences reflect on the company, so a negative or unfair experience could hamper efforts to find contingent workers in the future.
The aforementioned Forbes article also notes that the role of contingent workers has drastically changed. Specifically, "Contingent workers are no longer just "backfill” resources, tapped to fill in for an absent employee or augment staff in a spike of business activity. Organizations are now routinely reaching into contingent worker pools to meet ongoing operating requirements for labor, skills, and know-how (be it for transportation and warehouse work or professional nursing, technology, and business expertise)."
Furthermore, sought-after talent is now pursuing independence through contingent work and freelancing. In some cases, companies must maintain strong relationships with their contingent staffing partners and freelancers simply to access this talent, and these individuals and organizations understand their value.
Avoiding the Pitfalls of Excessive Cost-Cutting
While building partnerships with contingent staffing firms, companies must be wary of the pitfalls associated with excessive cost-cutting.
Eroding Trust and Quality
The first risk is eroding the trust and quality of the partnership. If a company pushes too hard for lower rates and cost savings, staffing suppliers may feel undervalued and become less motivated to prioritize their needs. This could result in a decline in the quality of service, including the caliber of talent provided.
Short-term Savings, Long-term Costs
Secondly, companies must consider the impact of cost-cutting measures on long-term costs. Short-term savings achieved through drastic rate reductions may lead to increased expenses in the future. For instance, transitioning staff augmentations to Statements of Work (SOWs) without careful planning can result in higher costs in the long run.
Damage to Brand Reputation
Excessive cost-cutting can also damage a company's reputation. If word spreads in the industry that a company is not a fair partner, this could discourage top talent and other suppliers from wanting to work with the company, adversely impacting its ability to attract the best resources.
To avoid these pitfalls, companies must strike a balance. Cost efficiency is undoubtedly important, but it should not come at the expense of mutual respect, transparency, and the quality of the partnership.
Only by building a relationship of mutual benefit can companies truly maximize the advantages of becoming a preferred partner to contingent staffing suppliers.
The Implications of Incorrectly Transitioned Staff Augmentations
Finally, organizations must pay close attention to how contingent staff are trained and transitioned into their roles. A poorly transitioned contingent staff can certainly lead to inefficiencies and undue costs. However, it could also damage the partnership between the company and its staffing firm.
Here are a few potential issues that could arise:
- Reduced Productivity: Improperly transitioned contingent staff may lack understanding of their role and responsibilities, leading to decreased productivity and inefficiency in operations.
- Increased Training Costs: If contingent staff are not transitioned correctly initially, they may require additional training or onboarding, leading to increased costs.
- Decreased Morale and Engagement: Contingent staff who feel neglected or underprepared may experience decreased morale, leading to lower engagement and potentially higher turnover rates.
- Strained Relationships with Staffing Firms: If contingent staff are not transitioned properly, it may reflect poorly on the company and strain the relationship with the staffing firm that provided the staff.
- Potential Legal Risks: If contingent staff are incorrectly classified or not given the correct rights and benefits, the company could face potential legal risks or fines.
- Damage to Brand Reputation: Poorly transitioned contingent staff can lead to negative experiences and perceptions, which can harm the company's reputation among potential workers and partners.
These challenges can be avoided relatively easily with a properly supported contingent staff procurement program.
Build Better Partnerships with Contingent Staff
In conclusion, the strategic role of contingent staffing in organizations necessitates building strong partnerships based on mutual respect, transparency, and shared growth. Avoiding excessive cost-cutting, ensuring the proper transition of contingent staff, and maintaining a balanced approach are key to leveraging the advantages offered by these partnerships.
By doing so, companies can unlock the full potential of the contingent workforce, fostering a flexible, resilient, and future-ready organization.
To learn more, don’t miss ProcureCon Contingent Staffing 2024. It’s happening from April 3rd to April 5th at the JW Marriott LA LIVE in Los Angeles, California.