PDA

View Full Version : Recruitment PSA - does your's work?



Maisy H
27-02-2013, 11:30 AM
Hi everyone,

I need your help!

I have recently taken on a new role with a company who uses a lot of recruitment companies for both contractors and some permanent staff recruitment.

There's not much control by HR and we have managers doing their own thing. I have been given the go ahead to start putting together a PSA (Preferred Supplier Agreement) for recruitment services.

I was hoping some of you might work for companies that have a PSA in place and might be able to provide some information, anonymously of course :)

I'm interested to know what where the main goals when your PSA was designed - what did you want the PSA to do for you?
(e.g was cost reduction a driver, or quality control, standardisation of terms and conditions and contracts, reporting, consolidated billing, single points of contact with suppliers, etc)

Does your PSA work? does it achieve the goals and are you happy with the outcome?

If not, what's going wrong and why?

Are you getting resistance from line managers?

Last but not least, are you getting the people you need through the PSA?

I would really appreciate your honest feedback on these points!

I'm hoping to hear from people with actual experience using a formal PSA ;)

Many thanks,
Maisy

Tiger
27-02-2013, 05:04 PM
Oh boy! This brings back some horror memories for me when I arrived to a similar situation at a new job in 2007.
Happy to share my experience. Everything was as you describe but worse. It was so bad that one recruiter had put a candidate up to a line manager then along came another recruiter and put up the same candidate up to a different line manager some weeks later and - yep you guessed it - the first recruiter also claimed we owed him his finder's fee since he'd introduced the candidate to the company first!!

I set about fixing recruitment by bringing in a contractor to review just what was going on (we were multi sited and HR had no idea what was happening) who was recruiting, what stage, with whom, what jobs, etc - it was a very indepth spreadsheet but helped to give us a succinct picture of our situation at that moment.

1. A Recruitment Process/Procedure was put in place and implemented.

2. Line Managers were no longer permitted to speak to recruiters; if they called they were to be told to contact HR.

3. Line Managers had to begin the process with a 'Requisition Request" which had to be approved by the GM before they could proceed and recruit any role - this included reason for the recruitment and if it was budgeted for (if that wasn't ticked, GM rarely approved them so a justification was then requested from the Manager setting out a cost-benefit analysis). With this, questions were asked and there were times when it just was not essential to recruit - thus some savings.

4. Perhaps unlike you (?) this was an industry for which it was very difficult to recruit - so much so, I did a lot of 4,5,7 visas back then bringing in the engineers we needed from UK, India and South Africa. This meant, we naturally reduced the number of recruitment consultants we could use down to primarily one. This didn't stop the scumbags (sorry but there were a couple of really disreputable ones out there I had to blacklist) and others trying to get a foot in our door.

5. For the overseas hires, this one guy was fantastic, he belonged to a global group, had worked in our line of business in another life and we did negotiate costs with him so that he had all that business. It is too long ago for me to remember what the dollars were - sorry.

It took about 3 months for the temp to fix this problem. We didn't really have a problem with the Line Managers because I had the total support of the General Manager - that was important; without senior management support for any initiative, HR can have it tough. A couple of the Line Managers took longer to tow the line on this but I took no prisoners and in the end, this was ok. In fact, I think some were happy to offload it all to HR anyhow although may not have admitted that.

The process also included overhauling the interviewing process. I introduced them to targetted selection and a HR member did the interview with the Manager. This way they began to learn effective interviewing skills (as opposed to the fireside chat... 'looks like a good bloke... let's hire him..') and began to put value on the assistance HR could bring to their businesses.

Not knowing type or size of your business Maisy, you need to be a bit careful. I worked for an IT company last year who'd gone the preferred supplier route and actually had four recruiters on their list. This was necessary because that particular type of IT was also hard to recruit for. Frankly, they didn't really deliver. When I arrived there were four positions the company had been unable to fill and because we couldn't go outside the preferred suppliers, the jobs were left unfilled. But the previous year several hires were clearly made on basis of best around but they were not good enough and ended up on PIPs (performance improvement plans) which often lead to a parting of the ways. I think that if your business is not quite run of the mill, having a preferred supplier means it is probably not going to work for you.

One important inclusion for you to have in your PSP relates to the guarantee. Consider the period and how it will work. I think three months is too short for higher level jobs and just guaranteeing to replace may not necessarily work. Consider a credit so you can use against another hire if they can't replace the role.

Another consideration for you is to think about the types of roles you'll be recruiting for. Are they varied? do you have blue collar, support, techies, professionals as well as execs? That's a broad range and not all recruiters cover the market on all. So you may welll have to categorise your recruitment and then go from there.

Once you've done your homework, invite a number to apply but important that you reference check them all. That means asking them for names of customers they already service so you can call and ask those other customers yourself.

As you no doubt need to keep your recruitment costs to a minimum, you will have to negotiate a fee that is a lessor percentage than they normally charge for one-offs. This will be the hard part, few like to reduce their fees. Then you end up having to re-negotiate every couple of years.

In my 2007 example, I ended up offering a permanent job to the contractor and she took over recruitment so we did it ourselves eliminating, to a high degree, the use of recruiters. In the end, we were using only about 3 all up.

I know there are good recruiters out there, I've known many over the years. However, your relationship is with the individual consultant and unfortunately there is a very high turnover of staff in recruitment companies. A lot of British backpackers come and stay a year then move on and in the main, they are very good at their jobs. But when they move on, you then have to train someone else about your company and what you need - you lose the history a little each time this happens. This I have found frustrating.

At another company I was at later, I also brought recruitment inhouse - recruitment agencies were not allowed to be used without express permission. This worked there due to nature of that business. The HR team did the lot but we did use an excellent recruitment tool "PageUp" which helped the process no end.

You might want to consider weighing the cost of purchasing an off the shelf system such as Page Up (there are others or course) v. the cost of placing your recruitment with consultants. But maybe that is something to do after you take step one which is what you are looking to do now.

Good Luck Maisy
Tiger

Maisy H
28-02-2013, 11:58 AM
Many thanks Tiger for taking the time to respond in so much detail, you have given me heaps to think about!

Most of the people we hire are IT people. They range from basic IT support through to senior roles specialising in specific products and technologies. So some people are relatively easy to source, while others are extremely hard to find. The majority of the people we hire are contractors, but we do hire some permanent IT staff in key positions.

As an organisation we hire in other areas such as sales & marketing, accounting, and payroll, but 90% of our recruitment activity is in IT.

Our CFO is keen to reduce our spend on recruitment agencies, but getting the right people is imperative for the business. Hiring the wrong people, or not having the people we need when we need them could easily cost us much more than the savings on recruitment fees. So my view is that getting the right people is the number one priority. Yes it would be nice to make some savings along the way, but not if we have to compromise on the quality of the people we hire.

One of my main concerns is something you mentioned in your post Tiger - will a small number of preferred suppliers be able to source some of the hard to find IT skills?

That's why I asked about the PSA actually working. Although I realise now that the answer to that question may depend on the perspective of the person who is being asked the question. HR, Finance and the managers at the coal face, may all have different priorities.

I must confess I didn't really know anything about Page Up but I have now had a look at their website. I now see that it can be used to manage the recruitment process, introduce consistency and no doubt improve the quality of the process, but I don't understand how it could replace our external recruitment suppliers?

Tiger
28-02-2013, 03:20 PM
I must confess I didn't really know anything about Page Up but I have now had a look at their website. I now see that it can be used to manage the recruitment process, introduce consistency and no doubt improve the quality of the process, but I don't understand how it could replace our external recruitment suppliers?

My reason for mentioning it was a) assumption you are still recruiting manually thus b) such a system does most of the work for you -- thus saves time and money plus keeps the managers honest!

Such a system can be
1) linked to eg Seek so responses automatically feeding thru the system; all you have to do is just write the ad and put it up.

2) you can just check system daily to track respondents to then go thru them, short list, and interview.

3) the system allows different access so your managers can also access to do the initial culling (be careful though you can trust they know what they are doing there -- it may be you need to do it too for a while to be sure the best candidates are in fact being short listed.

4) system will generate "thanks but no thanks" letters to non successful candidates both at initial culling and then after short list interviews -- although my preference was always to write a more personal "sorry but no thanks" email to those I'd actually interviewed.

5) system can manage candidates so that you can save those who were good but didn't quite get the job ie you may have had a number of excellent candidates, any one of whom you could have hired.

6) this system also had a "talent management" function.

So flagging this was to give you another option was for you to think ahead. What you do now is your first fix and I think that with everything going online and technology no doubt advancing further in future, whatever your initial solution is, it probably won't be long lasting. Plus it will take you time to get your system working the way you want it. PageUp, eg are great, they provide very good user training and as an IT company, I imagine accommodating such a system won't be too challenging for your IT support people.

The IT people I referred to were very specialised -- mobility platform development and the like - so not your standard IT types and my opinion was that preferred supplier agreements were not the solution for that company but then as a global company, their standards I thought were unreasonable eg if you'd changed jobs in less than 3 years or had no degree, we couldn't interview them - that eliminated a lot because, far less people these days stay in a job for that long! But it is worth giving this a go and trialing it for a year or two and see how your own results compare with what you want to get out of it. If you have a measurement plan set up from the start of these agreement(s), it will help. EG, length of time to recruit, amount of time HR spends on recruitment, as well as associated costs.

I think being known out there to the IT types you want to attract by having your own website with a Jobs Vacancy list is a definite advantage. I did find that those who knew about us often sent in what I call the 'unsolicited' resume which we could refer back to when there was a vacancy. Another idea is to develop your own talent eg cadetships, graduate programs and the like.

One final thought for you, in case you are not aware. You can purchase recruitment ad packages from Seek (not sure about My Career as I personally have always found the Seek site more user friendly) which can reduce the price of each ad compared to paying one-off prices for each ad. Whilst I can't remember real costs differences now, it was x$ up front with a term of arrangement which meant you spent that much within a six-month period. So eg say an ad cost $120, we paid about $90 (those numbers very rubbery-it was several years ago but you get the ghist). Good if you are placing high volume advertisements.

Hope this helps
Tiger

Steve Begg
05-06-2013, 09:42 AM
I think being known out there to the IT types you want to attract by having your own website with a Jobs Vacancy list is a definite advantage. I did find that those who knew about us often sent in what I call the 'unsolicited' resume which we could refer back to when there was a vacancy. Another idea is to develop your own talent eg cadetships, graduate programs and the like.

Tiger

Maisy, it would be interesting to know how/where you ended up on this subject.

After 30+ yrs in this industry my advise is to think about what Tiger said above and don't rely on the recruitment industry alone to solve your people problems. The phrase "IT Jobs in Sydney" is searched for over 30,000 times a month via google. Does your organisation come up in the search results? If not why not? If it did, you would be saving a bucket load of cash as you are attracting candidates directly.

Continuing to be dependant on the recruitment industry and trying dramatically reduce your recruitment spend is an oxymoron. If you go down the PSA path and squeeze the recruiter margins, then you will get what you pay for. There are other ways of winning this race.

Steve