Are managed services programs the solution to holiday hiring?
By Katie Kuehner-Hebert
The key to a successful managed service program (MSP) to staff the holidayrush: strategic planning. So say a number of MSP providers, who say that what many retail, light manufacturing, and warehouse distribution clients need most for their busiest season of the year is a plan of attack. MSPs can ensure the process is efficient and delivers enough transparency for the endeavor to pay off.
“You have to have the right data and knowledge to ensure you’re hiring not only the right people, but at the right price,” says Andrew Zarkadas, vice president, client solutions at Guidant Group in Atlanta. “You also have to have the operational efficiencies that are needed to hire and manage workers in an effective manner. If you don’t have systems and processes in place that are proven, things can go very wrong.”
A successful MSP provides suppliers full visibility into the open positions, as well as the requirements of the client, he says. For the program to work successfully it’s incumbent on providers to have strategic planning sessions with the client months before the hiring season to adequately analyze and forecast staffing needs.
“The retail world is getting ready to ramp up in September, so if we’re not sitting down with them in June, July, and August, we’re already behind,” Zarkadas says.
One of Guidant Group’s clients last year hired 680 temporary light industrial workers in 10 locations to help pack and ship gifts from mid-September to mid-January. Guidant Group’s solution hit several service level agreements (SLA): cost reduction, decrease in markup rates, and decreased time to fill. The proof is in the pudding: $770,000 in cost savings through comprehensive rate negotiation; 45 percent reduction in markup rates for the positions required; average response time from requisition received to candidate submitted was 24 hours; and the average time to fill ranged from one to three business days, including drug and background screening.
How did they do it?
“Through our strategic workforce planning efforts, we were able to prepare our supplier community, so there was a bench of trained contractors ready to go on day one of the assignment,” Zarkadas says. “We’ve also created a legacy program leveraging workers and suppliers year over year, eliminating the need to retrain.”
Anne Osty, vice president of sales and marketing at Staff Management | SMX in Chicago, says that MSPs need to be as nimble as their clients. A “vendor on premise” team has the ability to manage workforce fluctuations on a very granular level using the right
workforce management software and onsite staff. Regular communication with the pool of temporary workers will allow for the required headcount to be appropriately deployed on a shift-by-shift basis.
“This hands-on approach is critical in this sort of variable, high-volume environment where shift preference, full- and part-time scheduling, and volume fluctuation must be balanced with the need to get new associates started quickly to meet client orders and to ensure potential new associates aren’t lost to other employers,” Osty says.
One of Staff Management | SMX’s clients commonly scales up 100 new temporary associates a day during the holiday season, in addition to its temporary workforce of several thousand already in place.
But labor scheduling requirements can change as frequently as every hour based on the client’s order volume, weather, and new product releases. So a labor plan of 100 new contractors needed for the first shift on a Wednesday in one department can change to 100 new temps for the second shift on a Saturday working in a different department.
“The labor planning is very fluid. In addition to headcount changes within the facility, there may also be the need to shift volume to another facility, and we need to be prepared to support those headcount changes,” Osty says. “For instance, if a hurricane impacts the East Coast, our client may shift order volume to facilities in other parts of the country to ensure no service disruption.”
Staff Management | SMX has worked with this particular client for several years since the provider can adapt to the client’s changing needs, she says. Each year, the client’s temporary headcount requirements increase, so recruiters must tap into prospective new associate populations, while at the same time achieving high return rates from the previous year.
To achieve this, recruiters must deliver a high quality candidate experience, from the first impression made by recruitment ads, to the efficiency of the hiring process to the effectiveness of the on-boarding and training process.
“When you are starting as many as 700 or 800 new associates in one facility a day at peak, the way new associates are welcomed and oriented on their first day is critical, as are the incentives put in place to motivate the associates through the busy season,” Osty says.
Scott Fraleigh, vice president of managed services for SourceRight Solutions in Alpharetta, Ga., says that most buyers want end-to-end solutions, which include sourcing talent, on-boarding, and administration.
“While their needs are critical for that time of year, clients want to make sure pricing is appropriate for the market conditions—they want to pay the right price for the right talent at the right time,” Fraleigh says. “They also want transparency—they want us to do this seamlessly, without putting a lot of interruption in their core business.”
Fraleigh described the MSP process for one client that, while not a retailer planning for the holiday rush, has acute temporary staffing needs from late August to the end of December. SourceRight’s client had previously operated a telephone hotline for its employees internally during its open enrollment season for benefits. The hotline was a favorite among employees, so much so that volume of calls doubled. The client could no longer handle this load of work in-house. The company contracted with SourceRight to hire, on-board, and manage more than 800 temporary employees to operate the benefits enrollment hotline in four call center locations.
SourceRight then executed a request for proposal (RFP) process with its suppliers, for both full-and part-time positions for various levels of talent, ranging from entry-level customer service representatives to professionals able to describe the nuances of the company’s benefits program. In the end, six suppliers were selected to submit candidates into SourceRight’s VMS program. SourceRight coordinated the interview process to build a talent pipeline in a short hiring period. The client had the final approval of the candidate selection.
SourceRight then worked with its suppliers to complete the on-boarding process, including screening and background checks, plus four-week training sessions on the benefits program. SLAs for the program included time to hire, on-board and training success, adherence to established pay rates, turnover rate, maintenance of call volumes, and quality of administration.
“We were successful with all of our metrics, and as a result, the client has chosen us for next year,” Fraleigh says.
Karen Browne, president of Advantage xPO in Chicago, provider of consultative workforce management solutions and an operating company of Advantage Resourcing, recalled a client specializing in corporate relocation services who needed a contingent staffing program during its busiest time of the year, the summer.
“Our client needed an efficient recruiting strategy that enabled them to quickly add or subtract temporary workers when necessary, and to develop a system for retaining the top-performing temporary workers beyond the peak season,” Browne says.
After a comprehensive review and assessment of the company’s needs, Advantage xPO developed a robust recruitment plan to attract temporary workers with the right skills and attitudes. Advantage xPO also placed a manager onsite to handle orientation, on-boarding, and the ongoing interaction between the temporary workers and their hiring managers.
“This helped make the program more efficient, in addition to fostering a sense of community among the temporary workers,” Browne says. Advantage xPO also implemented its proprietary e-Timesheet tracking system and conducted regular performance feedback sessions with temporary workers and hiring managers.
The temporary workforce received high marks: a 99 percent performance score from their managers based on reliability, productivity, computer skills, quality of work, and initiative. The staffers themselves were quite happy as well: 80 percent expressed an interest in returning to the program the following year, and 96 percent said they’d refer the program to others.
The key to any successful MSP is adequately forecasting the appropriate analytics so that performance metrics meet the client’s end goals, Browne says. Part of that forecasting is determining how many candidates need to be prescreened to meet minimum qualifications, and how many need to be “behaviorally” interviewed through a series of open-ended questions to gauge a candidate’s ability.
“We’re leveraging targeted selection tools to promote higher quality candidates, which result in improved interview-to-hire ratios as well as increased retention throughout the assignment,” Browne says. ”Companies are starting to look at temporary workers as a strategic part of their overall talent management programs. As such, MSPs need to deliver the same quality within that contingent workforce as companies do with their permanent staff.”