One of the greatest stumbling blocks to any business is their ability to open doors to new customers, this is common in most businesses but seems highly relevant to recruitment companies. In some sectors and industries this is perceived to be a change in processes and routine, which as we all know, is not always embraced in a positive way. “We have an inhouse recruitment team that deal with our recruitment needs” or “we have a preferred supplier list (PSL)”, are examples of how a company may not open up to new suppliers.
Often when I reach out to people on certain platforms, I find that the majority of my new (requested) connections recognise that I am embarking on a sea change in the way that recruitment is done in the 21st century by having. Treating people in the way that I would want to be treated and having social responsibility at its core, really sets us apart from the rest of the crowd.
A preferred supplier list is typically a small number of businesses (usually 2, sometimes 3), that support a customer in the supply of certain products or services. The supplier is rewarded with a constant level of business and, in turn the client is rewarded with a reduction in the cost. Beneficial to both parties!
For the record, I am a huge fan of these arrangements. There are great mutual benefits. Control mechanisms to ensure fairness which promote equality and drive service levels (as the arrangements are often reviewed with performance monitored). The problem occurs however if you have 10 suppliers on the list. They are not 10 preferred suppliers as not one gains a commercial advantage for reducing their charges. It becomes a list of companies that will work at a certain rate. More importantly though, what happens if your preferred suppliers don’t have the capacity, specialism or ability to provide a specific product or service. In recruitment terms, they do not have the candidate that a company needs. Procurement ultimately costing a business in terms of money and opportunity rather than driving costs down.
No business, irrelevant of size, will survive and thrive by only working with a strict number of suppliers! Able Bridge Recruitment were asked to help a global financial services business in 2019 in the recruitment of a Tax specialist. The role had been open for 9 months with the “PSL”. Without wanting to get into the rigor of the procurement frameworks, we agreed a mechanism to work with each other and within 8 weeks the position had been recruited and the successful individual was onboard.
Looking at the way that Able Bridge Recruitment operate, we have suppliers for various different services. Like many businesses we are contacted frequently by companies asking for our custom. Understandably, it can be difficult to respond to all of these requests, however, if I am closed to a new supplier, I often wonder if I am missing an opportunity. Recently I was contacted by a job board that was keen to explain the benefit of their offering over their competitors. I was sceptical that there would be any tangible benefit, however I have trialled this supplier with a view to making an informed decision.
Looking at the patterns of recruitment over the past 20 years, in which I have been active in the profession, there are some interesting evolutions. At one point recruitment agencies and consultancies had a monopoly on the industry; linage adverts were expensive and inefficient; next came job boards, where adverts could be posted online of various websites, however they also became (are), expensive. Subsequently, the rise of the internal recruiter in large companies became popular, seeing an economy of scale by having their own internal recruitment department or recruitment process outsourcing (RPO), arrangements, which in turn drove preferred supplier lists, ultimately compromising on service and quality as recruitment businesses didn’t need to compete for custom as they were receiving the work automatically.
The benefit of being open minded to new suppliers for me is about experiencing a widder narration of what a market has to offer. To do the same thing and use the same suppliers today will not evolve a business for tomorrow. Making an informed and rational decision based on fact is obviously common sense, if you don’t have the conversation to establish these facts is counter intuitive to the growth of your organisation – Surely?
If you are interested in having a conversation with a member of Able Bridge Recruitment, please do not hesitate in contacting us on either 0141 7397080 or 0131 2023215. Alternatively, we can be contacted via e-mail – email@example.com