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Wednesday, December 19th, 2018

Ten Questions To Help Shape a Successful Vendor Management Program

February 17, 2009 Written by 

From NACCB Vendor Management Best Practices...
This list of 10 questions is the result of a survey conducted by the NACCB (National Association of Computer Consultant Businesses) based on input from 4 stakeholders - clients, vendors, managed service providers and consultants.

1. Have you included hiring managers/users and vendors in the design and periodic evaluation of the VMS program?

The needs of all the constituencies must be taken into account when designing a VMS program. A balance must be created between the needs of the end user (the department that employs the contingent worker), the needs of procurement and HR, the needs of the VMS program managers, and the needs of the staffing companies (who also represent the needs of the consultants). Everyone is on the same team working towards the same objectives: program success, payback and ensuring an efficient and proactive hiring process that results in hiring the best people at the most reasonable rates.

2. Do you have the proper number of preferred vendors to work with?

Too many vendors and you will lose the interest of vendors who perceive the probability of making a placement as too low. Not only would even their "fair share" be small, but at the same time their recruiting costs go up in parallel with worse fill ratios. For example, if there were 10 vendors, a fair share would logically average out to 1 placement for every 10 times a vendor recruits. Increasing that to 50 vendors means a vendor must recruit 50 times to make that same 1 placement.

Too few vendors can also be problematic, so you have to closely examine your anticipated needs, factor in reasonable fill ratios to keep vendors interested, and determine the optimum number. Also, many VMS programs have "secondary" or "tier 2" vendors. Do you have a sound procedure for using secondary vendors? Secondary vendors understand their position, but in order to maintain a quality secondary list it's important to offer them realistic opportunities - you may need them someday.

3. Do you provide the means for responsive communications?

If you don't allow this, you will lose the interest of vendors that place great importance in directly understanding the needs of your managers and in playing a consultative and advisory role to your organization. These high-service vendors are the vendors that you want.

Contrary to what many think, allowing controlled communication with hiring managers actually increases the VMS program efficiency because the candidate/client match is focused and the total time spent sorting and interviewing is shortened. Also consider the need for proactive management of consultants currently on assignment.

4. Do you encourage candidate quality over resume submittal speed?

If you're receiving too many resumes very quickly with disappointing results, it may be that vendors are skipping important recruiting, screening and evaluation tasks in order to submit a resume before the requirement is closed. Tell your vendors you will collect resumes for 3-5 days before you make any hiring decisions. This will result in their presenting you with "best fit" candidates versus "first fit" ones.

5. Do you have limits on the number of resumes vendors may submit per job order?

Limits are a good idea for both clients and vendors. They prevent clients from being deluged with resumes and encourage vendors to be selective in whom they submit. A reasonable number of resumes per vendor depends upon the size of your vendor list, but 2-3 per vendor seems to work well. This allows the vendor to be selective and still realize an acceptable fill ratio - assuming your vendor list is not overly large.

6. Do you provide vendors sufficient detail on the job requirements?

Skimpy requirements produce skimpy candidates. Your requirements should be thorough and complete regarding technical skills, application skills, interpersonal skills, position responsibilities, duration, option-to-hire, etc.

When questions arise on requirements, make sure you respond quickly and effectively to the vendors. Respect the fact that the better vendors typically ask more probing questions, which allow them to better pinpoint the most appropriate candidates.

7. Do you have adequately skilled VMS staff reviewing the resumes?

If not, they will likely base their decisions on resume acronyms and buzzwords - which unfortunately may encourage some vendors to embellish resumes to secure an interview.

8. Do you provide vendors with prompt and sufficient resume and interview feedback?

Responsiveness to vendors is a key attribute for VMS success. Without feedback, vendors will not learn or improve from the experience so they can better serve you. Feedback must be prioritized. However, even if you as a VMS manager do not have feedback from the hiring managers, at least be responsive.

9. Do you negotiate "too hard" on pricing and contractual terms with vendors?

If so, you may discourage vendors from submitting their best candidates - which they will present to more favorable clients. You may also find your vendor list consisting of companies that compete on price versus quality - which is probably not what you desire.

10. Do you track vendor and program performance and share it with the vendors?

The good vendors want to know how they are performing so that they can improve.  Likewise, they want your program to succeed so that they succeed...a classic win/win. The exchange of information and ideas provides invaluable insight.

Read 3905 times Last modified on Monday, 30 April 2012 12:35
Gary Zander

Gary is President of Project One.

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