Why I think PSLs or Preferred Supplier Lists are bad for your business

Picture this. It is a Saturday; you are having a big night out with friends. Everything is planned down to the last detail. You have spent hours shopping for a killer outfit; look a trillion dollars. Confidence and excitement are oozing out of every pore!

You get to the hottest place in town and the burley door attendant stops you in your tracks and says, "Not tonight you’re not on the list”

You now have two choices, go home or look for something else.

The thing is you haven’t spent all day shopping, styling your hair, and ironing your pullin shirt, to go home.

Not to be too stubborn, (and waste the magic of your shirt), you might just as well stay out. So move on to the bar around the corner. Not your first choice but much to your surprise you have a great night, spending lot of money in the process.

It is safe to say the door attendant on the first bar has, (subconsciously), made a terrible business decision; he has passed business to his competitor. Will you return, I don’t think so!

If the owner of the club had the luxury of being able to examine the entire drinking market on a Saturday night and only let in the most well behaved, affluent and thirsty customers, then surely they would jump at that?

Of course what business wouldn’t want their pick of the best people?

This is why I think that preferred supplier lists should be scrapped! I am of the opinion that in the current business climate we should be more open to new ways of conducting our business and with new people. Are PSL necessary? Are they putting limits and constraints on your business? The answer is seems to me to be a YES!. Are you getting the pick of the best people by sticking to your list? The answer is definetly NO!

Let us face the brutal truth there are allot of recruitment companies out there, I am disgusted by the behaviour of some of them, but I can name very good and highly professional companies, all of whom want the opportunity to prove their worth to you.

So why limit yourself with a select few?

Competition is good for business! In this current climate many new and existing agents are willing to be much more flexible on terms and price. This means you could be getting a much more competitive contract with someone outside of your magic list.

Candidates do not always throw themselves into the arms of every agency in town, which means you could be missing a future asset to the business that may not even appear on the radar of your PSL!

When a candidate on the open market looks promising to you they will also look promising to your competitor. You need to remember that many recruitment consultants in many cases are target orientated and commission hungry. Will they offer them to the business paying the higher commission? Perhaps, which means you may not even get to know about them, even from your cherished PSL. Forget any exclusivity agreement you may have, if you do not know about the candidate can it be enforced?

Having a PSL can alienate you as a business and can create a negative impression. I recently targeted five businesses that would have been ideal for a candidate of mine. Of which three had PSL agreements in place. I informed my candidate she should apply directly to three of them as I am not on their PSL. she felt it would be unfair for me not to earn a fee for the time and care I had given her. She said that she would not want to work for such "closed and inflexible companies”

Only dealing with a select number of businesses limits your ability to gain an overall snap shot of the market.

I can only see one benefit from having a PSL, it gets cold callers of the line quicker and saves you time. I personally feel there are much more effective ways to protect your time and I am always happy to discuss those with you. Perhaps that could be a future blog!!!

More shocks from the Recruitment Industry

Last night I broke the usual routine of home, meal, East-enders, run, then bed and spiced things up by meeting an old associate of mine for a drink, (coffee of course, it was a school night).

So we sit down in a local bar, (I mean coffee shop), exchanged pleasantries, moaned about the lack of activity in our love lives, drank a few more coffees, (I mean beers..... no I mean coffees), made our predictions for the coming football season, then onto work.

Now as luck would have it, this associate of mine happens to be a recruitment consultant for a leading Financial consultancy in Bristol.

I won't bore you with the details, but will summarise the content.

Last month he raised two invoices for just over £7000 with candidates’ he had found on a FREE social networking site and boasted that he had done this many times before.

Informed me that many companies are looking to head hunt the best staff on the market place, which often means "re-visiting" candidates’ he had already previously placed.

Now I am in business to make profit and I commend the initiative shown here.

But the following thoughts cross my mind.

Is the client aware that they are paying over £7000 for something that cost the agent nothing?

I wonder if compassion and empathy was shown to the client? After all times are hard for IFA's and financial services business at the moment, so were the fees discounted to reflect the agents, (cough, cough), costs?

Where is the moral correctness in churning candidates’ that have previously been placed by the agent in your business, only to whip them out and offer them to someone else?

In my mind that empathies the mentality of the recruitment consultant, it's not about taking your business to the next level and working with you, but earning the commission at the end of the rainbow!

Candidates will in time move on, but seeing as you paid the fee shouldn’t the consultant be doing everything they can to keep in your company not moving them on?

Ashamed of the Recruitment industry!

I think the recruitment industry is a disgrace. There are far too many recruitment companies out there charging highly expensive fees, for doing very little.

Now I remember a time when recruitment was a tough old job, you had to network to find candidates, build loyal relationships with the people you place and hope they value your services enough to refer a friend, take your business cards to the local pub and eves drop like mad in the hope that the conversation between too mates in the corner involved words to the effect of

"I am sick of my job, I need to move on”!

Fast forward a few years and it's all got a little bit easier. Job boards... Monster, Fish, Reed, to name a few.

They have done for recruitment what super sonic did for air travel... So imagine, you advertise your clients role, search the few thousand CVs on line, very shortly you have 2 0r 3 relevant candidates - send them to your clients, fingers crossed all goes well............hey presto your accounts department are invoicing 15 - 25% of the first year package to your client.... Easy money!!!

My advice to employers

1) If you use an agent – ask them to justify the fee
2) Ask them how and where the role will be advertised
3) Let me know how you get on!