Hiring activity is surging at a “robust” pace, according to a new report from KPMG and the Recruitment and Employment Confederation (REC). Yet businesses across the UK are struggling to recruit workers into temporary and permanent jobs, highlights Mark Inskip.
Could it be that recruitment directors are missing out on vital talent by putting all their eggs in one basket?
Statistics suggest that the temporary recruitment market is in need of a shake up – a more modern approach that not only widens access to the talent pool but creates a more fair and transparent marketplace that builds competitive advantage.
The vendor approach
The problem is that many organisations across the UK still use a master vendor approach for procuring agency staff. That means working with a sole recruitment agency who assumes full responsibility for filling vacancies, attempting to fill roles themselves before throwing the rest out to a second or even third tier of competitor agencies in a further supply chain. While it’s a model that works best when you have a low level of staffing requirements (less than 10 per annum), it’s not necessarily the most effective and efficient means of engaging supply chains of recruitment companies and sourcing the best candidates.
Whereas a neutral vendor model is designed specifically for buying in the modern economy, with a proven record of delivering more for less through an unbiased approach. Instead of filling roles directly themselves, they will manage supply chains and release available roles neutrally on a level playing field to pre-approved international recruitment agencies and local SMEs that meet social value requirements. That means as a client you create healthy and transparent competition, which ensures that you’ll always be able to source the best candidates. It also solves compliance headaches, because neutral vendors provide proactive and transparent checks that most agencies don’t provide.
This model gives much greater insight into the resourcing picture – so you can recruit temporary agency workers for the right cost, with guaranteed compliance, and with full visibility of the agency worker population. The result is a supply chain that, with fair access to the buyer’s requirements, is keen to put forward the best possible candidates for mutual benefit. By competing with one another on an open and transparent field, prices will more accurately reflect the true value of each candidate’s skills and expertise.
The master vs neutral vendor – problem vs solution
Typically, there are five major symptoms that cause the biggest headaches for organisations when sourcing staff through a master vendor arrangement – all of which can be addressed by a neutral vendor approach.
Fulfilment issues – It’s no secret that master vendor arrangements can’t deliver the same high fulfilment rates of a neutral approach – particularly in harder to fill areas. No one single supplier in the world, no matter how large, has the number of candidates on its books to compete with the number a neutral vendor supply chain of 2,500+ agencies can provide. Trickier staffing requirements – those at short notice or in more niche categories – stand a much better chance of being filled with a broad and varied supply chain in place.
Lack of choice – The master vendor model also overlooks the untapped potential of local and smaller recruitment consultancies outside of the lead agency’s supply chain; the perfect candidate could be missed, simply because they registered with a non-participating agency. Engaging with the broadest possible supply chain and stimulating competition, is key to establishing a supply chain that delivers a consistent stream of high-quality candidates.
Reduced quality – Under a master vendor model, the lead agency, which has a vested interest in its own success, is likely to submit its own candidates in the first instance, even if those further along its supply chain are more suitable for the role.
No control – How can a public sector organisation go about properly managing its spend when a single supplier recruitment agency is pulling all the strings? How can recruitment managers be sure they’re receiving the best candidates when the success of their organisation comes second to the lead agency’s?
Blurred visibility – When using a master vendor, there’s often a real lack of visibility over what is being spent, both on and off-contract. With no ties or affiliations to any agency, true neutral vendors provide the unique benefit of full visibility to all agency margins through ‘open book’ costing. A neutral vendor solution brings transparency, control and efficiency to the process of managing a diverse supply chain.
By opting for a neutral vendor which can manage and automate your recruitment processes, clients can release roles into a supply chain of international agencies and local SMEs in a matter of minutes with full visibility, control and 100% compliance from start to finish.
When it comes to fairness, transparency and access to talent, a neutral vendor will trump the more traditional master vendor option every time. A neutral vendor approach ensures that all recruitment agencies – no matter their size – have the opportunity to put forward their best candidates. And for the client, it gives them the best opportunity to fill those all important roles which, by judging by the latest figures, could be the answer they’ve been searching for.
Originally published HRreview | July 2022
Photo by Razvan Chisu on Unsplash