In a few previous blog posts I talked about the importance of defining and measuring metrics that give your organization true, actionable intelligence and insights into your non-employee workforce. A VMS with strong analytics functionality will deliver the data, reports, scorecards and dashboards that provide the foundation for business intelligence, the next step is to turn those insights into action.
The typical venue in which business intelligence data is reviewed, analyzed and discussed is in a quarterly business review (QBR). One trend we are seeing, is a shift from QBR’s being focused on reviewing where the program has been, to where it needs to go.
One key component of a forward-looking strategy is to ensure you adjust the metrics and key performance indicators (KPIs) that you measure, and how you measure them. This enables you to track if/how you are meeting your objectives as they change.
Defining and measuring KPIs is a process and not a single event. As your business objectives change, the business landscape and the contingent labor market changes. One of the best strategies I have seen for managing these changes is to have a quarterly evaluation of KPI prioritization. One client uses a 20-10-2 strategy. They track 20 KPIs - 10 are the quarterly focus and 2 are the strategic priorities. The KPIs shift each quarter as their business and the market changes. The client also tracks 2-3 additional KPIs that are either a redefinition on existing KPIs or new KPIs. This approach enables the client to use the power of VMS analytics and continually adapt to their objectives. At the end of the day, they are able to turn that business intelligence into results that drive business improvement.
The take-away is implementing a best practice to consistently re-evaluate and change KPI definitions, targets and priorities to ensure delivery of the best performance, quality and cost savings results. Having a VMS that will support these changes and deliver a comprehensive suite of analytics is key to having the business intelligence data at your fingertips to take action.
Once you select a VMS system, you begin the real work of defining and implementing your approach to contingent workforce program measurement. With the right tool in place to support you as your business and the market changes, you should have a solid foundation to define and drive your business intelligence strategy.
One key factor to consider when setting targets for your key performance indicators (KPIs) and service level agreements (SLAs) is making sure you design the measurement to give you the data you need at the right level of detail.
One example of a metric that often gets over simplified in how it’s measured is “Time to Fill.” We often joke that if you ask 5 people how this KPI should be measured you will get 6 answers. In some ways this is as it should be because it is so dependent on business process. In most cases defining “time to fill” as the time from when the manager creates a requisition, to the time that the requisition is filled, does not give clients enough details to identify areas for improvement.
In one situation, we had a client see an increase in their “time to fill” but they were struggling to determine the issue. During the economic downturn, they added several levels of approval to the requisition and this was not being included in the measurement. We fixed the issue by breaking down how they measured “time to fill” from requisition creation to approval, from vendor receipt to submittal and time from submittal to fill. This provided the client with the tools to understand:
- How long their approval process was taking
- How quickly their vendors were responding to requests
- How long the candidate evaluation process was taking.
The client used these more detailed analytics to identify problem areas, conduct root cause analysis and make improvements.
This example demonstrates the importance of taking time to consider what and how you measure performance, to ensure you have true actionable intelligence.
For more information on deploying a strategy to provide actionable insights into your non-employee workforce, check out our new VMS Analytics white paper