How to improve candidate quality from supplier-funded MSP

Something like 80% of Fortune 500 companies have adopted an MSP model for staffing, where a 3rd-party partner company handles or manages all staffing requirements. In large organizations that really need the help, companies that offer these programs promise:

  • standardization
  • risk mitigation and compliance
  • access to quality talent
  • cost effectiveness
  • visibility of spend
  • accurate reporting

In the most simple case, there are really just two ways that MSPs make money. The first is a client-funded program where a Fortune 500 company pays the MSP partner directly. The second is a supplier-funded program where the client doesn’t pay, but the MSP instead takes a cut of the invoices billed by suppliers (staffing companies or agencies). The first scenario can be more expensive, but tends to lead to higher quality candidates. Thus, we’re going to discuss the second model.

In markets where mark-up is low, some suppliers may be unwilling to participate in such a program or hold back their best talent for other clients. This reduces overall quality and makes it hard to enforce vendor neutrality.

If your MSP partner is supplier-funded, how can you keep the quality of candidates high?

The solution comes down to changing two key things:

  1. Automating and standardizing the way a candidate is ranked against other candidates using an objective performance-based method, and
  2. Giving vendors the tools to skip steps in their process to make up the costs charged by MSPs.

In terms of standardizing your candidate ranking, you’ll want to focus on the most important thing: predicting how candidates will perform in a real work environment.

This is often what processes do as the very last step, after screening, shortlisting, and pulling hiring managers off of their work to do on-site interviews. By moving performance evaluation up to the front of the process, suppliers can skip most of their time-consuming screening conversations and cherry-pick the talent that will be more likely to be successful employees. Hiring managers can preview candidates before approving them for an on-site, oftentimes cutting down decision time down from a few hours to a few minutes. Thanks to a standard system, suppliers won’t feel the “time tax” for finding high-quality candidates like they used to.

As an added bonus, fraudulent candidates have a much harder time getting through the funnel because they have to prove their skills as part of the initial screening process. (In the case of using Filtered, Cigna cut cases of undetected fraud down from >25% per shortlist to less than 4%).