Six key metrics for your contingent workforce managed service programme (MSP)
If you oversee a contingent workforce programme, you’ve probably considered how to measure its success. Whether you’re managing a well-established programme or a newly launched managed services partnership, monitoring performance is crucial.
Before evaluating the effectiveness of your contingent workers managed service programme, it’s essential to determine the right metrics. Consider all the factors that contribute to a successful programme.
Many organisations assess their contingent workforce programme primarily through cost savings and speed. However, in today’s competitive talent landscape, these metrics only capture part of the full picture.
Effective contingent labour metrics should cover everything from talent acquisition to employee satisfaction. Managing a contingent workforce requires evaluating both the business impact and the experience of your temporary workers. Below, we’ve compiled a checklist of key metrics for successful contingent workforce management.
Key MSP metrics
1. Fill rate: how quickly can you fill your contingent vacancies
Fill rate refers to the ratio of contingent job orders received by suppliers compared to the number of job orders successfully filled each month. This metric is crucial for assessing whether a programme has the potential to be effective. Low fill rates can point to problems such as inefficient processes, issues with rate cards, poor-performing suppliers, or other fundamental challenges within the programme.
When evaluating time-to-fill, it’s important to dig deeper. Look for factors that may be contributing to delays, such as hiring managers being slow to act after receiving candidates. To accurately assess critical metrics like time-to-fill, make sure to separate response times from other stages in the process. This will help you understand how quickly your suppliers are responding.
2. CV to vacancy, and CV to interview rate: how many relevant applications are received
CV-to-vacancy and CV-to-interview rates are key metrics for measuring the flow through the staffing supply chain. These metrics focus on creating an efficient process that benefits both suppliers and hiring managers.
Your MSP partner can have a significant impact on these metrics. If the MSP acts as an intermediary between the hiring manager and supplier, it can lead to lower scores. For example, a low CV-to-vacancy ratio may occur if the supplier doesn't fully understand the hiring manager's needs, resulting in no submissions. Alternatively, a supplier might submit an excessive number of CVs, hoping something will be accepted.
It’s crucial for the hiring manager to collaborate closely with both the MSP and the supplier to clearly define the job requirements. This collaboration also helps improve other metrics like time-to-hire by reducing miscommunication. One way to streamline this process is by creating a clear job briefing.
When assessing these metrics, remember to maintain existing processes and policies. Candidates expect a timely response when they apply, so it’s important to establish a process that ensures prompt communication. This approach not only enhances your employer brand but also improves the candidate experience, helping you retain top talent and prevent them from seeking opportunities elsewhere.
3. How long the entire recruitment process takes
Time-to-hire measures how quickly you move once you've identified the right candidate(s). Unlike time-to-fill, which tracks the period from job posting to job fill, time-to-hire focuses on the number of days between the job posting and the candidate’s acceptance of an offer.
This metric reflects how efficiently the programme is delivering value. Watch for the following:
- A high or low CV-to-position ratio may suggest that the intake process by the programme team is ineffective.
- A skewed CV-to-offer ratio could indicate several issues, such as a weakness in the supply chain, misaligned selection criteria by the hiring manager, or a lack of interest in the position or the company from candidates.
It’s beneficial to track and analyse your workflows. For instance, assess how long it takes to schedule interviews, arrange testing, and complete background checks. This review will help identify opportunities to streamline the process and improve efficiency.
4. Satisfaction scores: how happy is everyone with the recruitment process
Most companies measure user satisfaction for their internal programmes, and in the case of contingent workforce management, this usually focuses solely on hiring managers. However, to ensure a high-quality programme, it is crucial to assess satisfaction not only from hiring managers but also from suppliers and, most importantly, from candidates.
In today’s competitive talent landscape, scarcity means that workers have many options for where they can go. If your company isn't a "client of choice" and your programme is difficult to navigate, top talent will likely choose other opportunities.
Using a Net Promoter Score (NPS) allows an MSP to gauge satisfaction levels among both hiring managers and contractors, ensuring a positive experience for all parties involved.
5. Tracking to rate card: does everyone earn a reasonable rate?
Many mature programmes have implemented a rate card methodology to ensure consistent, standardised rates across the organisation. Contingent workforce programme managers regularly assess suppliers to identify the top performers. This evaluation process helps to pinpoint suppliers who may need improvement or should be removed from the programme. Rate cards play a key role in this evaluation.
Are suppliers adhering to the rate cards, or are they consistently submitting rates above the maximum threshold? Is this happening across all suppliers or just one?
If the issue is widespread, it may be time to refresh the rate cards, especially considering how quickly the market evolves.
Aligning the rate card strategy with the level and quality of candidates the company seeks is crucial.
- If a company claims to prioritise quality but offers below-average pay, it’s important to question whether their priorities and intentions align.
- On the other hand, if a company is paying in the 99th percentile for a skillset that is in ample supply, there may be significant opportunities for cost savings.
6. Compliance audit scores: how many candidates pass compliance audits
Achieving 100% compliance is often the minimum requirement for suppliers in a contingent workforce managed services programme.
By conducting thorough background screenings, you can significantly reduce potential risks. It is the responsibility of the program office to keep suppliers informed of any updates or changes.
How to measure your contingent workforce metrics
Define metrics
Your team needs to establish a clear set of metrics. Using these metrics, you can measure the success of your contingent workforce management programme and managed services provider.
Review metrics
As your programme matures, consider revisiting what your original objectives were. Evaluate whether changing circumstances present an opportunity to review and update your strategy.
Maintain ongoing reports
The six priority contingent labour metrics are a great start. But it’s important to track trends over time. You’ll need to monitor expenditure within a resourcing budget and plan for future needs.
Seek support
The Enterprise Solutions team at Hays has the expertise to define what success looks like for your program and how to measure it. As a leading provider of MSP, along with managing outsourced contractors, statement of work, and direct sourcing solutions, we've gained valuable insights from hundreds of projects with clients worldwide.
Take a look at our MSP services to help support your contingent workforce management.
You may also want to read our guide to mitigating co-employment risk for contingent workers. Or read our expert recommendations for managing your contingent workforce successfully.