Buyer beware: 5 Key things to consider when you’re buying a contingent labor program

Five ways talent leaders and buyers of Managed Service Provider (MSP) programs can avoid buyer’s remorse when it comes to purchasing talent solutions.

Buying a contingent labor program is a big deal. It’s often a multi-million-dollar deal, which means this isn’t something that you can afford to get wrong. But all too often, buyers are left feeling vulnerable. They are overwhelmed by complexity or choose an option that may appear to save them some money upfront but will ultimately fail to provide any real value or help them to achieve their people goals. B2B buyers are twice as likely to regret their purchase when the process was construed to be difficult, according to Gartner. So, how do you avoid making the wrong choice for your organization? I’ve been in this industry a long time, and I’ve been lucky to speak to many talent leaders about their experiences, good and bad. Here are 5 key things to remember when talking talent programs and some red flags that should send you running for the hills.

1. Nothing is free

It’s good advice for life. It’s good advice for buying an MSP. When someone says, “Sure, we can tack on a worker tracking solution for free,” you want to think hard about what the quality of that worker tracking solution is likely to be. Budgets are tight, especially following the global health crisis, and it can be tempting to go for the lowest commercial value – supplier-funded programs can start to look very attractive. But low cost can leave you exposed to risks, and the hard truth is that a provider cannot run a brilliant program on the cheap. That doesn’t mean that you should be paying over the odds, but it does mean that you should be very wary of buying on the premise that everything is supplier funded.

I always tell clients, “We don’t do anything for free,” and I’m proud of that. It takes great people, time and resources to provide excellent solutions and service, and that’s where we excel at KellyOCG.  

2. What are your goals? (And how will organizational change drive program success?)

There are cross-functional teams involved in purchasing a labor program – procurement, talent acquisition, operations, legal, HR, the C-suite, and more – but all stakeholders must understand and agree with your fundamental goals. You’ve got to recognize this shared opportunity to succeed in your change initiatives. This doesn’t mean you can’t be flexible, but it does mean you have to understand what really matters to your business. What problems are you trying to solve? What change initiatives will you put in place? What technology do you need to support you? How will this tech integrate with your current systems? What labor channels are most in-demand? Once you have your fundamentals, you must stick with them as closely as possible to get real value, otherwise it’s like buying a car without a steering wheel – a program just won’t do what you need it to do.

3. Don’t forget the talent

It seems simple, but too often, third-party labor slips down the priority list when it comes to buying a contingent talent program. Often, conversations around people are squeezed into the last few minutes of a buying meeting when they should be front and center. A program could deliver at the right price and have all the bells and whistles you can imagine, but if it doesn’t help you connect with the right people, you’ve failed. You need to understand how a potential provider will connect you to talent, how they re-imagine current or new suppliers, how they approach diversity, how they support and nurture talent pools, and not just now but months and years down the line.

4. Transparency and honesty matter

Ever come out of a meeting with a talent supplier feeling more confused than when you went in? You’re definitely not alone. According to Gartner, 77% of B2B buyers state that their latest purchase was very complex. A great partner should be able to simplify your needs and the solution you are looking for; they should be straightforward, honest, and explain the limits of what is and isn’t possible. If someone says they can deliver everything you’re asking for and more without missing a beat, then you maybe want to dig a little deeper into what they are actually offering. Where have they done this elsewhere? I’ve spoken to companies that have bought global MSPs, only to realize after implementation that it’s impossible to implement the program in half the countries they thought they were buying for. That’s a learning curve you really don’t want to take. At KellyOCG, we are actively fighting to change this, so much so that we’ve developed a BS-free approach to MSP. No jargon. No buzzwords. No empty promises. Just straightforward expertise that helps you connect with the right people in a way that makes sense for your business.

5. Find the value

Ultimately, what your program should deliver is value, and that extends way beyond the bottom-line cost to how a program helps you achieve your goals – visibility, access to talent, retention, diversity, and much more. As a talent buyer, it’s great to go to the C-suite and say, “I’ve saved X amount on our labor program.” It’s hard to go to the C-suite and say, “We’re struggling to keep and retain the talent we need because this ultra-low-cost program is delivering nowhere else and our hiring managers are tearing their hair out.” I believe that our industry has accelerated this race to the bottom, the idea that the cheapest option is king and we’ll figure out the details later. But it doesn’t have to be like this, and by extending our view of value (as buyers and talent suppliers), we can start to reimagine this landscape.  

Buyer’s remorse when you’ve picked out the wrong shirt is frustrating. Buyer’s remorse when you’ve picked out the wrong labor program can be devastating. Perhaps it’s time to rethink talent buying, to put people first, and to recognize the value in dynamic, forward-thinking contingent labor programs that deliver on real and impactful value.