2. TABLE OF CONTENTS
3 Introduction
4 Analytics considers the continuous flow of talent through a business
5 Insights delivered through the talent supply chain analytics portal
6 Supplier rationalization and optimization – the why
7 Using Pareto Analysis – the how
8 Client’s supplier scorecard summary – actionable insights
9 Comparing suppliers by KPI interrelationships – the action plan
11 Supplier scorecard across programs
12 Conclusion
2
3. Few companies can
succeed without having
the right people in
the right place at the
right time.
The use of contingent labor is
expected to continue to grow as
organizations look to capitalize on
the use of all talent types to increase
their competitive position within
the market. In a recent survey from
Harvard Business Review Analytic
Services, it was found that “some
70 percent of respondents agree
that using external workers allows
their organization to meet market
demands and maintain efficiency
that would otherwise be difficult.
And more than half see the value of
the external workforce increasing in
the next several years”.
The good news is that we are
immersed in an era of “big data”.
Organizations have access to more
information about their external
workers and talent suppliers.
Through more in-depth analysis
of this information, organizations
can develop actionable insights,
while aligning only the top-
performing suppliers against their
organizational need.
However, many companies develop
these insights within a narrow band.
They use analytical tools to examine
inward-facing factors looking at
metrics, such as how quickly they
can fill roles or at simple bill rates or
mark-ups, independently. Leading
companies are instead tapping
into higher-value analytics activities
that evaluate the composition of
their supply chain — and ultimately
ensuring that they have the
most competitive suppliers for
their industry.
3
69%
say using external workers
allows our organization to
meet market demands and
maintain efficiency that
otherwise would be difficult.
66%
say using external workers is
beneficial to our organization
and the external workers.
53%
say using external workers
allows us to bring in expertise
that our full-time staff lacks.
Source: Holistic Talent Supply Chain Management,
a Harvard Business Review Analytic Services Report
4. ANALYTICS CONSIDERS THE
CONTINUOUS FLOW OF
TALENT THROUGH A BUSINESS
W
hen focused on optimizing
the supply chain for
contingent labor, an organization
should look outside its own doors
and rigorously evaluate its activities
across the entire talent supply chain
and against global best practices.
Today, successful companies are
realizing that effective planning
involves making the most out of big
data — which previously seemed
unworkable — and making decisions
based on that.
Big data, along with the latest data
analysis techniques, is key to gaining
new insights. Widening the lens to
focus on the whys and the hows,
along with performance metrics
and benchmarking of talent
suppliers, is pertinent to establishing
sought-after predictive insights
and, ultimately, the most effective
supply chain.
The KellyOCG®
approach to
analytics enables a smarter, more
data-driven methodology to create
and manage your talent supply
chain, and delivers actionable
insights to improve talent
management practices.
4
Successful
companies are
realizing that
effective planning
involves making the
most out of big data.
5. Talent Supply Chain
analytics ensures
effectiveness: that
you are doing the
right thing.
INSIGHTS DELIVERED THROUGH
THE TALENT SUPPLY CHAIN
ANALYTICS PORTAL
T
here is a distinct difference
between the reports provided
by a managed service provider (MSP)
through a vendor management
system (VMS), and the reports
provided through the talent supply
chain analytics portal. Within a
VMS, you have defined views
with a focus on spend visibility, as
well as the who, what, where, and
when. Typically, MSP-driven reports
are aggregated by segment (i.e.,
business unit or manager) and
focus on a single key performance
indicator (KPI). Essentially, you are
viewing the outcome of “Who spent
what where?”
KellyOCG does not limit its focus
to the who, what, where, and when.
Instead, the emphasis is placed
on how and why. The starting
point is a premise rather than
a predetermined view. Data is
used — whether statistical, visual,
predictive, or benchmarking —
to understand and analyze any
interrelationships. Validation is first.
Then the hypotheses are tested.
KellyOCG looks for insights to drive
optimization on behalf of our clients.
VMS/MSP reporting helps you
achieve efficiency: that you’re doing
things right. Talent supply chain
analytics ensures effectiveness: that
you are doing the right things. As
your program model matures and
process improvement continues,
these analytics will validate and
assist in determining the next steps
of program evolution.
5
6. SUPPLIER RATIONALIZATION
AND OPTIMIZATION
– THE WHY
K
ellyOCG has a refined and
proven process to ensure that
its recommendations encompass all
available areas of evaluation to make
the best optimization decisions.
First, an evaluation of how much of
an organization’s spend is attributed
to the top suppliers is performed.
The next step is to then look at
the supply chain to establish how
well they are performing based
on established KPIs, with a focus
on efficiency and effectiveness. To
assess whether their performance is
consistent across multiple programs,
and to see if any anomalies must be
considered, a comparison in how
they have delivered for multiple
organizations must be performed.
Collectively, this comprehensive
view will drive recommendations
for supplier optimization, which
traditionally drives 5% - 10% in
measurable cost savings. Savings
are more considerable and the need
greater as services procurement
and statement of work spend are
managed within the program.
6
This comprehensive
view will drive
recommendations
for supplier
optimization.
FIGURE 1
7. USING PARETO ANALYSIS
– THE HOW
T
he objective is to understand
how to design the supply chain,
and to rationalize and optimize
the suppliers within the program.
To start, a common statistical and
procurement technique, the Pareto
Analysis, is used. In this case,
the Pareto Analysis focuses on
understanding who the top suppliers
in the supply chain are, enabling
the understanding of their impact
(i.e., the percentage of spend or
headcount they contribute).
The process begins by visualizing,
confirming, and validating the
current state. Next, the suppliers
that may be rationalized are selected
for further evaluation.
For clarity, the following provides
an illustrative client example.
In figure 2, it is shown that 55%
of the spend within this client’s
program equates to 28 suppliers.
(Note that the orange bars indicate
diversity suppliers.)
7
When looking at the number of
suppliers making up 80% of the
spend, it is 139 suppliers. This
means the additional 25% of spend
(between 55% - 80%) is made up by
111 more suppliers — a substantial
tail to begin to optimize. Through
previous client engagements, it
was also found that cycle time was
reduced by rationalizing the tail.
FIGURE 2
8. 8
CLIENT’S SUPPLIER
SCORECARD SUMMARY
– ACTIONABLE INSIGHTS
I
t is now apparent that, within
this example, a large number
of suppliers are contributing only
small amounts of the total spend —
creating a tail which is the focus on
optimization. To begin the process
of optimizing the talent supply
chain, supplier scorecards must be
evaluated. The interest is not just in a
“score” (i.e., which supplier hired the
most). What needs to be understood
are the impacts and subsequent
insights for the suppliers across many
KPIs, subsequently benchmarking the
suppliers to see how they compare
to one another. For suppliers within
managed programs, the following
KPIs are critically important:
• Response rate
• Shortlist rate
• Interview rate
• Hires (hit rates)
• False starts
• Compliance to rate card
• Contractor evaluation scores
• Assignment completions
(measures quality)
Each KPI has an assigned goal. For
instance, suppliers should respond
to an accepted order 60% of the
time. A score is also provided:
points correlating to that goal. In the
scenario illustrated below, you see
that the shortlist KPI and the hires
KPI, equally scored at 20 points, are
the most important KPIs.
Applying this methodology, the
optimal suppliers will be illustrated.
It showcases where they are
performing and not performing,
furthering the progress along the
talent supply chain optimization
journey. Additionally, suppliers
are benchmarked against each
other and ranked by KPI or the
composite score.
FIGURE 3
9. This talent supply
chain analytics
visualization is
a true indication
of the supplier
partnerships.
COMPARING SUPPLIERS BY
KPI INTERRELATIONSHIPS
– THE ACTION PLAN
I
t is now understood how each
supplier scores against a KPI,
and the suppliers can be sorted
and ranked based upon individual
KPIs or the total composite score.
So: If someone responds all the
time, does that make them a great
supplier? Or are they spamming us
with resumes, making us inefficient?
The true answer in supplier
optimization is in the inter-
relationships between KPIs.
KellyOCG goes beyond summary
scoring and reporting by using a
proven analytical approach.
The figure below compares selected
scatter metrics — hit rate and
response rate — for an organization.
That is: Are our suppliers making
hires and responding to us? Or:
Is a supplier who responds all the
time just sending in sub-optimal
candidates and making for busy
work without return? The goal is to
identify the supplier generating
work within the program, but
providing minimal or low-quality
candidates. Suppliers that treat
the program as a low priority and
are who not responding will also
become apparent.
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FIGURE 4
10. Figure 4 illustrates that suppliers
average a 14% hire rate (above the
target of 10%) and a 41% response
rate (below the target of 60%).
The under-performing suppliers
are also shown here, in the lower
left quadrant. With the size of the
scattered circles indicating the
number of orders, it is evident that
there are several non-responsive
suppliers who are receiving orders
but not making hires. Likewise,
many suppliers are responding but
are not filling orders, resulting in a
waste of resources.
This talent supply chain analytics
visualization is a true indication
of the supplier partnerships, in
this case, that should likely be
optimized. Some effective suppliers
are illustrated in the bottom-right
corner of the graph. They are highly
responsive and dedicated, but not
making the median amount of hires.
Why? Are they getting the right
jobs in the right location? Are they
responding too late?
These suppliers can be selected for
a more in-depth look to understand
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COMPARING SUPPLIERS BY KPI
INTERRELATIONSHIPS – THE ACTION PLAN
if they are hard workers that
need better alignment, or if they
are simply keeping generating
work within the program but are
incapable of providing necessary
results. On the other hand, the
suppliers in the top-right quadrant
express real dedication with above-
the-line response rates and hires.
These are the tier one suppliers.
At this point, a filter by labor
type and location will enable the
evaluation of understanding how
best to design the supply chain
around these best performers.
11. SUPPLIER SCORECARD
ACROSS PROGRAMS
A
fter looking at the suppliers
within the program and truly
identifying the poor performers that
are driving up program costs, before
making any decisions, they should
be benchmarked in comparison
to the overall supplier ecosystem
outside of the program. Is that poor-
performing supplier in your program
truly a bad supplier? Alternatively:
Could it be an intrinsic program
issue? Before action is taken with
the supplier, it is important to review
their performance in other programs
and perform a cross-program
comparison. Might their local branch
be experiencing uncommon recruiter
turnover? After all, the average
tenure of a staffing company recruiter
is six months. Or: Is there a new
recruiter who has not been properly
trained on your VMS?
The KellyOCG talent supply chain
analytics portal is a valuable tool
that allows for the analysis and
benchmarking of a program’s
supply base to a much broader
supplier ecosystem.
11
FIGURE 5
12. T
oday, high-performing
organizations have access
to more data than ever before.
As a strategic partner, KellyOCG’s
role is to ensure you examine all
available data in every conceivable
light, ultimately tapping into global
best practices through in-depth
analyses that were not readily
available before.
It’s not just about filling positions.
This fact-based approach takes
your big data and benchmarks it
against other high performers in
your industry, relentlessly scrutinizing
the raw statistics in every way
possible to yield measurable results.
Through answering the whys and
the hows, KellyOCG’s talent supply
chain analytics results in actionable
insights, enabling you to make the
big decisions in optimizing your
talent supply chain.
Immediate action drives results! When you are
evaluating the tough questions about your talent
supply chain, KellyOCG can help answer them.
CONCLUSION
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KellyOCG consults with organizations, both with internally and
externally managed programs, in defining best-practice supplier
analysis and optimization strategies. Scorecarding tailored to
each business, as well as analytics portals used to continually
measure performance and savings, is also a strategic focus.
