Managing Vendor Relationships Includes Improving Employee Engagement

Payroll industry heavyweights Brent Gow, CPP, Managing Partner at BRGow & Associates, LLC, and Jay Conforti, Director of People & Change HR Transformation at KPMG, discussed vendor relationship management and more in the Wednesday morning workshop “Managing Vendor Partnerships Worldwide.”

When it comes to payroll, it is extremely rare to find a payroll operation that does not have at least one outsourced relationship with a vendor. Across the world, vendor relationships need to be managed effectively if businesses want to both maintain and improve payroll services. The presentation covered everything from relationship management and pre-implementation planning to critical performance indicators (CPI), advisory boards, governance management, and support management beyond “go live.”

Outsourcing is no longer just about saving money. Now, we seek vendor partnerships to improve levels of employee engagement and to leverage additional services that will enhance the employee experience. Vendor partnerships have become two-way relationships founded on increased levels of accountability, visibility, and governance. 

It is critical to develop a business case that helps companies pick vendors that fit their service model. If they fail to do this, it can be an expensive mistake to resolve later. This is also why the discovery phase is so essential. It is at this point a company can see if the implementation will work.

Once a company is ready, its focus can then turn to robust service level agreements (SLA). Typically, this will be made of CPI and key performance indicators (KPI). SLAs are a powerful way to keep vendors on their toes. With an SLA, companies can measure performance and review it regularly.

Remember, of course, that a partnership is a two-way relationship, and it is also important to ensure a company has contract accountability through governance, which can help drive more tangible value creation within the contracts. 

Ultimately, the agreement is the foundation. The organization will need to be redesigned to accommodate the partnership, and the work within the relationship needs to be defined and redefined if necessary. Always enable collaboration and never leave relationships to chance.

It is, of course, after the contract is signed that the real fun begins.

Nick Day, MA, BA, REC DipRP, CIR, AIRP, is Managing Director at James Gray Associates.