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A woman is at the tailor, having a suit fitted. Upon taking measurements and inquiring about her preferences, the tailor pins and hems the suit according to the woman’s taste. It now meets all of her criteria: it is the right style, fabric, color and fit that the woman sought all along. Satisfied with the way the suit looks, the woman approaches the cash register to pay for the service. But, as she reaches for her wallet she hesitates. “I want to get the best value possible,” she explains to the salesperson,” so I need to know: how much do you charge for each hem or pin line? What is your markup on fabric and thread? Your answer will help me determine what I think is a fair price to pay for this fitting"
This particular situation may seem unrealistic for a suit fitting. However, many companies procure their IT staffing services in a similar fashion — to their disadvantage. By setting pay rates and restrictive limits on markups or margins, these companies wrongly view talent acquisition services, and the contingent workers involved, as if they were standardized commodities. The reality is that talent is not a commodity. Thus, when seeking to find the “right” person for a job, there is no “off-the-rack” solution.
The reality is that talent is not a commodity. Thus, when seeking to find the “right” person for a job, there is no “off-the-rack” solution.
There are four primary ways companies set limits on their vendors’ prices:
The idea seems simple enough: Specify bill rate, pay rate, mark up, or margins for each skill set category needed. Limits will be set to achieve the maximum degree of vendor competition based on detailed analysis of rate information and fair market values. Vendors can then choose to engage and compete, or walk away.
Like most things in life, however, procuring IT staffing services is not that cut and dry.
Shopping for talent is not the same as shopping for a commodity good. There may only be one or two people in a local market that can successfully fill a role in a particular company. Thus, to obtain the right employees necessary for critical IT undertakings, staffing buyers should ensure their vendor management system fosters healthy competition, without pricing their organization out of the market for top talent.
People are at the heart of every successful business initiative. At TEKsystems, we understand people. Every year we deploy over 80,000 IT professionals at 6,000 client sites across North America, Europe and Asia. Our deep insights into IT human capital management enable us to help our clients achieve their business goals – while optimizing their IT workforce strategies. We provide IT staffing solutions, IT talent management expertise and IT services to help our clients plan, build and run their critical business initiatives. Through our range of quality-focused delivery models, we meet our clients where they are, and take them where they want to go, the way they want to get there.
TEKsystems. Our people make IT possible.