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Field Service Contractor Bidding? Why It’s a Flawed Approach

Field Service Contractor Bidding? Why It’s a Flawed Approach

Service-centric organizations today often leverage third-party field workers. The staffing tactic may be part of their ongoing strategic business model or a temporary way to solve workforce gaps caused by the shortage of skilled workers or spikes in demand. Contractors can provide as-needed coverage for service requests in all regions, even remote locations. While contractors solve staffing issues, managing non-employees can be challenging. Solutions for scheduling and reimbursing contractors play a critical role in managing the complexity of scheduling and dispatch.

Most experts agree that multiple factors should be considered when determining the best contractor for each service request. This is particularly important when considering outside field workers for assignments.

ServicePower’s field service management solution optimizes scheduling using powerful automation tools and algorithms that analyze factors, like location, skills, experience, and even preference. Based on criteria defined by the service company, the solution provides recommendations of field contractors and their ranking.

The highly flexible solution allows the service company to set priorities and define the ranking orders. For example, the proximity to the customer’s location could be the top factor. Or it could be the technician’s experience with the product to be serviced or reviews from customers. As long as data is available, it can be incorporated into the ranking process.

In a recent webinar, Sarah Kelleher, Product Manager for ServicePower’s Dispatch and Contractor Reimbursement tools, and Brad Hawkins, Chief Product Officer at ServicePower, discussed the necessity for third-party contractors and the challenges that arise when blending them into your workforce.

“It's getting harder and harder to find those people whose aspirations in life are to grow up to be an HVAC technician,” says Hawkins. “It shouldn’t be that way because those are wonderful, fulfilling, high-paying trades. But we need more of those people.”

So, independent contractors are often a necessity. Companies need to adapt processes to engage with the contractors, understand availability, assign jobs to them, evaluate their success, and reimburse them. Technology is essential. Without a specialized platform to manage the processes, scheduling and dispatch can be chaotic, with delays and inefficiencies. In the past, some companies may have simply tossed the service request “over the fence” to an outside technician without follow-up to be sure the customer had their needs resolved. Today, customers don’t tolerate that approach.

“Full transparency is essential. As a service provider, you need to know that the field worker is available, reliable, and successful,” says Kelleher. “You need to know if they arrived on time and met customer expectations.”

A ranking system, such as ServicePower uses, helps determine which technician or field worker to assign to a job. Kelleher and Hawkins discussed different criteria to rank, possible strategies, and whether the contractor’s price alone should be the only factor in determining which contractor is at the top of the list. Both agreed that low-cost bidding for jobs among contractors is short-sighted and is likely to end in disappointment.

In fact, ServicePower has experience with that approach. “Back in the day, many years ago, we tried out the bidding platform and we learned many things,” says Hawkins. “When you put a job out to bid among the network, they generally bid down to the lowest common denominator. So while you may think you’re saving on one dispatch, with a guy who's willing to do this job super cheap, a lot of times that comes with poor quality. And it ends up costing more as you need multiple dispatches to get the job done,” he adds.

The other downside to asking contractors to bid on jobs is that contractors can easily burn out. They may focus on other opportunities where they can make more money. “So, what you ultimately do when you throw jobs out for bid is you cannibalize your network. You can be left with the poorest performing providers left to do the work,” says Hawkins.

Instead, companies should look at multiple factors. This is one of the key benefits of ServicePower’s solutions. Companies can tailor their criteria. They can determine what will provide the best experience for each customer.

“Putting those Key Performance Indicators (KPIs) back in the hands of the service company allows them to decide what they need most, how they want to grow their company, how they want to measure efficiency,” says Kelleher. “Giving them the power to decide is smart. They know what they need to emphasize better than anyone,” she says.

Download the entire discussion here.

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