Metrics and measurement. For recruiters, these represent our well-intentioned attempt to remind our organizations of the value we add. We have best-in-class-ed, six-sigma-ed, metric-ed and measured every conceivable staffing-related behavior within an inch of its life. Curious what metrics are important? Want to know who’s measuring what? Search using any engine and you can watch the gods in our world debate quality of hire versus time to fill versus cost per hire, ad nauseam. Makes your chest swell with pride doesn’t it? Recruiting has come so far! We’ve got this thing down, don’t we? So, imagine my surprise when one little request for a contractor took me down a dark and lonely road, one on which no new information has apparently been gathered since about 1973. Water cooler conversation: Finance guy says, “Beth, I need a CPA in here tomorrow. Can you make a call for me and make that happen?” “Hmmm. Well, I don’t know. Which staffing firm do we use? Who is good?” I ask. “What do you mean who’s good? Aren’t they all the same?” (Silently: Oh no. Oh, no, no, no…you’re kidding me.) “Just call Nationwide Staffing Firm X,” he says. “They’re supposed to be good, and we’ve used them in the past.” “Really?” I say. “Great! Can you send me a copy of the contract, just so I can review it?” Long pause. “Contract? Where would I find it?” he asks. Perfect. There has to be a better way to do this, I think. This will be a snap. I’ll just log on to ERE or SHRM and check out how my peers are managing this huge spend. There must be gobs of metrics around this, considering the impact to the bottom line, and the increasing spend. This won’t take long at all. Guess what? Do the search yourself. Go ahead, I’ll wait. No “best in class,” no suggested measurements, no best practices, no current research on something as run of the mill as request for proposals for contractors. How can this be? No information on which companies do this well? Suggestions for the right measurement tools? What about measuring quality of contractor versus cost of contractor? Even further, who is the correct owner of this process? Finance, purchasing, or HR? The emperor has no clothes, my friends. We have neglected this very routine, very basic need of our business. Best I can stitch together, RFPs are the evil offspring of some sort of a bizarre arranged marriage between staffing, HR, finance and purchasing. The divorce isn’t going so well. While we fight over custody and point fingers when the child behaves badly, no one really wants to take responsibility for the performance or quality issues. The lack of nurturing given this little monster means no direction, no improvement in processes, and little regulation or scrutiny. What we’re left with is an out-of-control teenager, called contractor spend. We have given the keys to the Ferrari to the teenager, then sent it to boarding school, hoping it will leave us alone and not remind us what bad parenting skills we have. How bad are we? Here are a few general questions for establishing a baseline of just how bad it might be:
- What is your contractor spend?
- How many contractors do you have on site? How many do you have at your other locations, out of state? What agencies are they from?
- Is third-party vendor management really cost effective?
- How long has it been since your contracts were renegotiated?
- Who backend monitors billing to ensure it matches your contractual agreement?
- Are local folks or nationwide larger companies the way to go?
- Are your managers familiar with the 20 factor IRS test for determining the definition of an employee? Who owns the processes?
Just to get everyone on the same page, here’s how the dance goes. Call your purchasing and finance peers. The secrets are coming out the closet. If finance or purchasing negotiated your contracts, there’s a problem. They are not recruiters. These are widget folks. 1 + 1 = 2, always. But when 1 and 1 are people, whose quality matters as much as cost, then 1 and 1 don’t always add up to 2. And here’s a newsflash: Those sleek, good-looking sales folks, who bought you the expensive dinners and vodka tonics, are SALESPEOPLE. They have no control over the quality of your contractor. The placement is made baby, you’re last week’s news. Load the coffee cups into the trunk, we’re moving on! And you know what else? This is a small town. We all have the same people in our databases. No one has immediate access to hundreds of CPAs or C programmers. Online networks are filled with people who logged on once, never to return again. The “nationwide company” spiel is old, useless, and very 1982. This means they’re locked in to using their branch in another state near your other facility, regardless of their presence or reputation in that town. Any good recruiter has contacts in other states, and if they don’t, they can get them quickly if their hands aren’t tied by their “company policies.” So how do you go about getting a handle on this situation? Call your high usage staffing firms immediately. This is going to be an interview. And yes, of course, it’s behavioral. Don’t worry about being nice. Don’t be swayed by the expensive dinners or the good-looking sales folks. Don’t be dazzled that they flew in their regional guy or that they just brought you tickets for the next Steelers game. Around the table sits all the decision-makers. Finance has their questions, purchasing has their own. Here are few of yours, for starters:
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- How many contractors do you have working in this town right now?
- What is your turnover rate?
- How do you retain top talent, in terms of your contractors?
- How do you recruit minority talent?
- How do you measure quality of hire?
- How do you recruit your contractors?
- How have you handled contractors who demand pay increases?
- Do you provide insurance for your contractors?
- How do you recruit people who work as recruiters in your offices?
- Explain your organizational structure to us. Explain how your internal employees are compensated.
- Why would a contractor work for you rather than your competition?
- Who is your competition? What can you do better, as a company?
- What is your business strategy for next year?
- What is your placement rate with your sister offices in other towns?
- If your firm is selected, who will own the quality of hire for the entire company? (Insist on one person.)
- Give an example of handling a serious ER issue
- Have you ever said no to business? Why or why not?
- Tell us about the best example of partnering with a client that you have.
- Tell us about a time you dropped the ball.
- What is the background of your recruiters?
This is referred to as “thinning the herd.” Sweat rolls. The clearly sharp regional guy has no idea how his firm runs the business locally. Red power ties are loosened around necks as the questions drag on. (Who let her in here, anyway? Should’ve brought her a coffee cup…) As the recruiter at the table, it’s your job to point out that the quality and the cost of the contractor are equally important. All contractors, like all widgets, are not created equally. You’re bringing contractors into your business to help meet a deadline, beat a backlog, or for a variety of other reasons. Which of these firms really recruits the best contractors, and moreover, who is the best at convincing quality contractors to work for my company? How do I figure this out? I found myself asking these very questions. Then it hits me. Ask the contractors. Ask your line mangers for the names of their top-performing contractors. Schedule meetings with them, immediately. Ask them, they work for their specific firms. What is the word on the street about their competition? Who pays better? Is there any firm you would not work for? Would you leave your employer to go to another firm? The herd becomes even thinner. One of our most valued contractors educated me this way. Ah, the mind of a contractor! “It’s like this, Beth; I have a marketable skill and the firms are my mouthpiece. The way I see it, they sell me. I’ll work for the firm that can get me the best assignments in the best companies and that can increase my skill level, and thus my marketability.” Well said. Why didn’t I think of that? What I’ve learned: Staffing firms can be your friend. They can help your company achieve goals and deadlines, and improve quality of life for your workforce by lightening the workload. Find the right partners and the dance works. Cost isn’t everything. Expect that last part to be a tough sell to your finance and purchasing brethren. Quality is, at the end of the day, the most valuable metric. Pay for quality, both of contractors and their mouthpieces. Sending out a “bid” for a job cheapens the dance. I don’t want the cheapest computer, and I certainly don’t want the cheapest contractor. Purchasing and finance work under the impression that bidding on jobs produces competition, which must be good, right? Right, but a good recruiter competes with themselves. Don’t expect that your partners in finance or purchasing know that walking-on-the-edge rush of placing the perfect candidate. Local firms get the rush because they’re recruiters. They own the business. They have skin in the quality game, just as you do. If they sell you a bad contractor, they know you won’t use them again. And they don’t have a corporation that will send them a pay check, regardless. Don’t undervalue that motivation. Plus, they don’t bring coffee cups! I don’t know about you, but I have plenty.