OMNIA Partners Blog

Supplier Scorecards: Measuring the KPIs That Drive ROI

Posted by Todd Humes on September 24, 2014

Your suppliers play a critical role in the success of your business, providing the operational flexibility to quickly adjust to new opportunities and seasonal surges.

Because the reliability of your suppliers can have a direct impact on your initiatives, their individual performance matters. Supplier scorecards are a simple and effective way of accurately assessing and comparing staffing provider performance.

If your organization doesn’t rely on a vendor-neutral recruiting process, it’s normal for stakeholders to develop relationships with particular suppliers and direct business their way. Supplier scorecards give you the visibility you need to identify the suppliers who are providing the most value to your business.

The heart of the scorecard is key performance indicators (KPIs) that align to the service level agreements (SLAs) in your staffing supplier contracts.

(SLA measurements may include responsiveness, fill ratios, turnover, and other specifics.)

Comparing suppliers on a single requisition will not give you accurate data, but observing over time and multiple requisitions, you can track both the ability of your suppliers to deliver the talent you need as well as their commitment to meeting your SLAs and quality expectations.

While detailing the specifics of an effective scorecard requires more than a blog post, here are a few basic considerations:

Define Your Expectations

Every company is different, so determine the factors that matter to your business, including employee quality, time-to-fill, cost, industry expertise, supplier responsiveness, and other priorities of HR, Procurement, and your hiring managers. Next, rank the order of importance for these items, keeping in mind that some factors are more important – for example, a supplier may have great rates and fast delivery, but there’s no value to that if their candidates can’t do the job.

Document Supplier Delivery

Every supplier engagement should be measured against your scorecard – otherwise, your data will be biased. Whether you use a weighted point system or a KPI average to track performance, make sure the system is consistent for every vendor, and it’s based on quantifiable evidence – for example, how long from requisition to submission, cost compared to budget, percentage of contract completed by employee, and so on. There’s no place on a scorecard for intent or excuses.

Compare Apples to Apples

One supplier may excel at large ramp-ups while another may excel at identifying niche specialists. Having both in your approved supplier base ensures you can deploy the people you need, when you need them.

Reward Performance

When you have identified your best-performing suppliers, direct more business their way. This is a win-win scenario – you get the best recruiting results, and your suppliers get rewarded for being attentive to your business.

Finally, make sure your suppliers know what your expectations are so that they have the opportunity to tailor their service to your requirements. After all, that’s the goal – having suppliers who are focused on delivering exactly what your business needs.

Topics: Group Purchasing Organization, Procurement

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