Supplier Performance Measurement and Evaluation

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Fostering a High-Performing Supplier Network for Your Contingent Workforce

A contingent workforce’s success largely hinges on the success of the participating suppliers. Motivated and responsive suppliers provide hiring managers with best-fit candidates quickly and cost effectively. Conversely, an ill-equipped or disengaged supply base can cause skill shortages that drag an organization’s productivity to a halt. Formal processes for measuring and evaluating supplier capabilities can keep a contingent workforce on course, as organizations that rely on managed service providers (MSPs) can attest. An even better strategy entails building mutually beneficial supplier partnerships, aligning supplier metrics with broader organizational goals, and taking a new approach to scorecard and review process.

Treat Suppliers as Collaborative Partners

No company wants to feel like just another vendor, just like no worker wants to feel like just another resource. Encouraging meaningful supplier interactions establishes trust, mutual concern, and a collaborative mindset. Doing so demonstrates a commitment to working together to create a positive experience focused on respect and an open exchange of ideas. It also helps clients and suppliers better understand each other’s strengths, challenges, capabilities, and expectations within the program.

Many MSPs tout their supplier-friendly approach and have public recognitions for top suppliers. These efforts help assure suppliers that they aren’t viewed as interchangeable by acknowledging their pivotal roles in contingent workforce programs. Supplier coaching and mentoring helps them develop their overall capabilities and support for individual client programs. And top providers such as TAPFIN host program-specific supplier forums and annual summits to promote an environment that welcomes all voices to contribute valuable insights. This level of investment in suppliers solidifies a working relationship far more rewarding for all parties.

Set Performance Standards Strategically

Every contingent workforce program has processes and systems for collecting information to measure, rate, and improve supplier performance. MSPs and vendor management systems offer standard sets of supplier metrics configurable to client preference. These metrics often make up service level agreements (SLAs) for holding suppliers and MSPs accountable for program performance. Few organizations take the important next step of aligning metrics and SLAs with broader organizational goals.

Leading organizations have defined goals for their products and services. Those goals should filter down to all levels of the workforce, including contingent workforce suppliers. Using them to determine which supplier metrics to track will help enable them to guide an organization’s workforce decisions in the same way they guide other strategic initiatives. Otherwise, organizations risk relegating supplier metrics to the “data for the sake of data” category. Worse, relying on the wrong metrics could lead an organization to make decisions that inhibit a contingent workforce’s efficiency and value.

Conduct Meaningful, Two-Way Assessments

Performance reviews and supplier scorecards elicit the same type of dread among suppliers as annual reviews do for employees. They often end up feeling like box-checking exercises that rarely yield quality feedback and cause unnecessary anxiety for reviewers and reviewees. Supplier scorecards, in particular, elicit further criticism for being too long, infrequent and limited. A partnership-minded approach makes gathering, evaluating, and sharing performance details more effective by making formal checkpoints part of an ongoing conversation.

Open, transparent working relationships help keep surprises out of scorecards and reviews. Quantitative and qualitative details shared during formal exchanges should validate items already mentioned during informal interactions among clients, MSPs, and suppliers. They should also address ways to make contingent workforce processes or policies more effective, since continuous improvement thrives with multiple perspectives. Adding discussion about leading industry and organizational trends expands the review process scope and its long-term strategic value.

Transcend Typical Workforce Management Dynamics

Modern contingent workforce management requires a personal approach to supplier performance measurement and evaluation. Gain an advantage on competitors who fail to connect with suppliers in more than a transactional manner by showing suppliers you are invested in their success. The growing size and importance of this segment of the workforce makes having positive supplier partnerships imperative to maintaining access to the talent you depend upon.