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Case Study

North American Mid-Size Pharma Company

The Situation

Initial MSP Partnership: The pharmaceutical company signed on with a large MSP partner as a 1st generation contingent solution.

 

  • Limited Data: Majority of contingent labor activity was occurring outside of the MSP and the VMS, data capture and program activity reporting were severely limited.
  • Inconsistency: Supplier compliance, guidelines, and strategies were inconsistent.
  • Poor Pricing Control: Out-of-program placements soared, often exceeding approved rates by over 100%.
  • Rogue Spend: Supplier engagement outside of the managed program led to overpricing, inconsistent contract terms, compliance risk, and an overall lack of visibility.
  • No M&A Strategy: There was no strategy for integrating contingent labor following acquisitions.
  • Communication Issues: Overall poor service delivery with no single point of contact for program support, governance, and trajectory.

Major Issues due to bias

The previous MSP’s role as a staffing provider led to:

 

  • Conflict of Interest of the dual role caused favoring the MSP’s staffing services over other suppliers.
  • Biased supplier selection drove up costs, reduced engagement & limited competition.
  • Inconsistent Quality due to the MSP prioritizing its staffing services, resulted in long cycle times and some positions failed to be filled entirely.
  • Supplier Dissatisfaction: Unhappy suppliers = poor performance. Supplier dissatisfaction due to bias hurt program results and hiring manager experience. Candidate submissions often went unanswered, with no action taken. 
  • Data Integrity Issues: Bias in staffing services led to an incomplete dataset in the VMS and an inability to capture meaningful analytics. As a result, data-based program strategy was not possible.

The Solution

To address these challenges, Workspend implemented a comprehensive solution  including:

 

  • Vendor Management Solution: A new VMS was implemented to capture all necessary data points and integrate with the pharmaceutical companies HRIS/Workday systems.
  • Program Transition: All supplier contracts and headcount were transitioned to be managed by the MSP, adhering to agreed-upon contractual markups.
  • All Encompassing Solution: Worked with stakeholders to design a solution where 100% of non-permanent labor would be managed under the managed service program.
  • Vendor Neutrality: Workspend is not a staffing supplier: participating suppliers compete on merits like speed, quality, and price, allowing the company to choose the best value.
  • Supplier Scorecard: A scorecard was established to evaluate supplier performance.
  • Feedback Program: Client, supplier, and worker feedback and satisfaction programs were created.
  • Single Point of Contact: An allocated single point of contact for MSP program leadership and daily operations.

Benefits of Vendor Neutrality

Fair Competition: Vendor neutrality ensures a level playing field for all suppliers, promoting fair competition. This leads to better quality and cost-effective solutions as suppliers strive to outperform each other.

Increased Supplier Participation

A neutral MSP attracts a diverse range of suppliers, increasing the pool and quality of available talent.

Cost Savings

Reduces unnecessary markups and promotes competitive pricing.

Improved Compliance

Consistent adherence to compliance standards across all suppliers reduces legal and regulatory risk.

Enhanced Quality

Improved service quality and higher satisfaction levels among clients and workers.

Transparency

Clear supplier performance and pricing boosts strategic decision-making and planning.

Data Integrity

Improves the accuracy of data and reporting, leading to more reliable analytics and insights.

Supplier Relationships

Fair treatment of suppliers strengthens relationships and collaboration, contributing to a more effective and responsive program.

Final Results

Workspend transformed the pharmaceutical company’s contingent workforce program, replacing their biased MSP with a neutral, cost-effective solution. Our focus on supplier neutrality, data accuracy, and program performance delivered significant cost savings and happier hiring managers and suppliers. Fair competition, better quality hires, and improved compliance resulted from vendor neutrality. Our white-glove support keeps stakeholders engaged and enjoying the full program benefits.

  • 100% Program Adoption: All in-scope labor activity occurs within the managed program, leading to cost savings, increased compliance and risk mitigation, and complete visibility.
  • Hiring Manager Satisfaction: An efficiently managed and well supported MSP program leads to a Hiring Manager user group who have their needs met and exceeded by the services provided.
  • Reduced Markup: The average Tier One Supplier Markup was reduced from findings of 70-99% to 41-43% across all supported labor categories.
  • Tail Spend Reduction: Tail spend was reduced by 80%.
  • Markup Savings: $494,786 in markup savings in 2023.
  • MSP Fee Rebate: Implemented an MSP fee rebate of 0.25%, resulting in additional cost savings.
  • Diverse Supplier Spend: Increased diverse supplier spend from 0% to 30% of total spend.
  • SLA-Driven Governance: Implemented an SLA-driven governance program.
  • Program SOP: Developed a full program SOP which captures all aspects of program governance and methods of management. A detailed and up-to-date SOP ensures management efficacy and consistency as the program matures and responsible stakeholders change.

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