One of the key benefits of a workforce management program, whether you leverage a technology like VMS or you outsource this function to an MSP to manage suppliers, is the visibility and controls put in place to measure supplier performance. In either model, the supplier scorecard is one of the essential pieces of any program’s supplier management infrastructure. Scorecards are certainly not a new development in this field. However, as the nature and composition of the contemporary workforce continues to evolve, there are some thoughts to keep at the forefront, to ensure scorecards are properly designed, deployed and utilized to their fullest potential.
It is commonly agreed that a supplier performance scorecard should include parameters for measuring such things as:
- Service level agreements (SLAs) as enunciated in the RFP for such measures as submissions per job, cost-per-head, source-per-hire, conversions, etc.
- Compliance with business processes and regulatory dictums
- Pricing and markup
- Response times to challenges/issues
- Purchase orders/invoice submission
- Benefits offered to contractors
- Proper use of online systems/processes
- Any other Key Performance Indicators (KPIs) as may be relevant to the program
Yet SLAs and KPIs are not the end all, be all to measuring performance. Attention must be paid to specifics to guard against over reliance on these performance metrics that, left unaddressed, may lead to skewed perceptions of supplier performance. The SIA’s Bryan Peña recently warned workforce management professionals of the dangers inherent in leaning too heavily on scorecards without examining the underlying drivers of what is being measured. Peña writes, “When building a scorecard, many program managers make the mistake of holding suppliers accountable to elements beyond their control.”
For example, one of the most standard metrics captured in a supplier scorecard measures the number of days between the times a job requisition is conveyed to a supplier and the time an acceptable candidate accepts the position or “time-to-fill”. A supplier can submit resumes within hours. Yet, if hiring managers are slow to review candidates, perform interviews and ultimately hire, time-to-fill may be pushed out beyond acceptable tolerances through no fault of the supplier. Yet, the scorecard does not capture this distinction. Best practices dictate that time-to-submit should be the metric to include on a scorecard. Measuring the time between the requisition and the submittal of resumes is a far more fair and appropriate measure of a supplier’s responsiveness.
Other supplier performance metrics commonly captured by scorecards include temp-to-hire conversions as a gauge of candidate quality and cost-per-hire. These are also metrics where, if left unexamined, the supplier may be penalized for actions beyond their control. Candidates sourced as part of a temp-to-hire program may be qualified yet exhibit spotty attendance records or lackluster productivity and may not be selected for a full time position. This determination has nothing to do with a supplier’s ability to deliver qualified candidates. Yet the unexamined data beneath the score on the scorecard may unwittingly punish a capable supplier. Cost-per-hire factors are often influenced by wide differences in rates for the same job role across disparate locations. Again, the supplier is potentially penalized by a scorecard that does not differentiate between a role in a major metro area and the same role in a rural locale.
The bottom line is that supplier performance scorecards will remain critically important tools in the successful application of workforce management programs. But it is imperative for each program to examine the underlying drivers of performance when devising or updating their scorecard features. A small investment of time with an experienced workforce management provider to properly develop and deploy scorecards can have an outsized impact on their efficacy over the long run.