International Preferred Supplier Agreements are a lazy solution

Organisations that choose to implement international preferred supplier agreements need to ensure they are not designing a lazy solution. Whether driven out of procurement or HR, a PSA needs to deliver on the core need of attracting the best to their organisation in the most timely and cost effective manner taking into account all their locations and specialist sector needs.

There is a trend amongst the multi-national IT Vendors to use  centralised and technology  led processes to select regional and sometimes global providers. These are often pursued by the multi-national recruitment generalists whom tick off the location box and tolerate a price driven agreement. Fair enough and good luck to both parties.

But, my point about it potentially being a lazy solution is that the process often ignores the reality that the best recruitment solution for any multi-national also needs the following elements:

  • Flexibility
  • Local relevance
  • Specialist Sector coverage
  • Local knowledge and relationships

I have observed these IT multi-nationals signing up PSA’s even when their multi-national partners have little or no coverage in local markets covered by the PSA. Now that is a lazy solution and worst of all they are letting down their own local teams by hindering their access to the best people and ignoring well established mutually beneficial relationships.

Convenient yes, leveraged yes but are they smart?

Not in my opinion.

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Future Proof your Recruiters!

Some recruiters allow themselves to question their future relevance. They feel they are under siege from the growing control that some in-house recruiters seek or from the fast paced development of social media and communication technologies.

I believe two behaviours will spare them from this anxiety and make them forever relevant:

1. Build deep, trusting and informed client relationships…

2. Become a relentless sourcing animal…

Neither of those two things are easy and that’s why there are far fewer $1m plus billers than there are $300k billers. The former category of recruiters never question their relevance. They invest heavily in gaining deep knowledge of their clients and in their relationships. Equally they are relentless in their pursuit of quality candidates. To breakdown the skills required to master the above  behaviours is a book rather than a blog, but use your imagination.

If your consultants master these two behaviours they will never feel distracted by any uncertainty of their worth.

Stripping it bare! Niche specialisation is the key.

As recruiters sometimes our proposition gets confused. When we present to potential clients it’s very tempting to rant on about great applicant tracking systems, robust assessment processes, social media expertise, great brand campaigns, or whatever. But really, when we cut through all the clutter, the thing we do that we are needed for is to target,  source and manage the right candidate. Yep we now use a whole lot of tools that were not always available but actually any good corporate recruiter and agency can do deploy these tools.

The thing they need us for is the experience and specialist knowledge of our sector. When combined with the skills to search out , engage and manage the process to successful outcomes our relevance never fades and our value is high.

Certainly I acknowledge that in-house recruitment teams and RPO providers can add great value to organisations in terms of volume hires but when the hard to find key people are needed we remain the best source. This is because if we are any good, we know where they are, what they want and we can go out and get to them.

A simple proposition but a complex role, hence there are many more $250k billers and much fewer $1,000,000 billers in our industry.

Be a niche specialist and great relationship manager if you want to stay high up in the value chain. You will always be relevant!

Employee Referrals…yes… yes… no!

ER (TV series)

Image via Wikipedia

A client was explaining to me last week about their 87% direct vacancy fill rate. About half of this was from Employee Referrals. I applaud their efforts and that is a great statistic to evidence their effectiveness.

Yes, I agree that Employee Referrals are a fantastic source of quality candidates.

Yes, I suggest that all organisations should have an Employee Referral programme.

No, it’s not the panacea so make sure you know what you are looking for… let me explain!

The best corporate recruitment advisor that I have ever met is a guy called Alfonso Nunez. He is currently working with RPO Group in Australia. He has a great mind for deep analysis of the business impacts related to how an organisation recruits and he once told me a great story.

The upshot of this story… He was investigating why this particular national sales organisation was not performing to expectation. They had very low staff turnover, low cost per hire and almost no problem recruiting for growth based on a very successful Employee Referral scheme. I can’t do his work justice here but in essence he was able to identify and show that the very success they were claiming in the success of their ER scheme was the root cause of their performance dissatisfaction. He found that the ER scheme was creating a culture of like-minded, mediocre performers whilst the competitors were hiring a new breed of sales people, more relevant and full of diversity. The competitors were changing and winning! His company was full of mates and their mates but were losing!

Therefore the lesson I took out of Alfy’s work was a cautionary note about Employee Referrals. If you need culture change you may need to change the people! Watch out for the like attract like syndrome.

You should have an Employee Referral programme but its one source of hire to be used in balance, not the panacea!

Nice work Alfy!

Multi-listed contingent recruitment will stop!

Yes I believe it… I am pleased to say that a major international has just agreed to this very mantra and for all the right reasons.

Throughout a normal process of an RFP for a preferred supplier panel this company (whom I will soon name and promote with pride) has engaged with their suppliers on the basis of best practice. They accepted that the old habits of multi-listed contingent assignments no longer served anyones purpose. Sure they crunched the fees and terms a little for the volume promise but refreshingly they are going to provide assignments to their suppliers on an exclusive and sometimes retained basis.

In essence they want it done properly in the interests of the employer, the recruiter and the candidate. Mutual committment to the task underpinned with effective communication providing controlled, measurable outcomes. I love it. For over 23 years I’ve endured multi-nationals squeezing agencies on price, only to put them all in a rat race where the only measurement of success was speed. Yep speed eventually does kill.  This old style engagement model is dying as all parties become more enlightened to the impact of speed recruiting on all parties!

Much more to come on this topic but today is a great day!

What is the best source of candidates?

Employee referrals will always come up as the best source of hire in any research that I have read.

But I have a warning!

A company we recently did some work with made virtually no hires that were not from an employee referral. The good news was that their cost per hire was very low. They didn’t even pay employee referral incentives. It was even better when we looked at their employee retention and found their staff turnover was very low. All good and no need for intervention here we thought.

However, this mid-sized national company was losing market share and not hitting its revenue targets. Long story short was that new hire profile directly matched existing employee profiles. Yes, a happy content bunch of underperformers. The market had changed and competitors were hiring a very different and diverse group.

The issue… “like attract like’ and whilst this may be convenient and cost-effective it may not get you the result you want. A bit like using the “old boys” network… yes it has a place but not always and not without rigor in the process!

SOLD OUT!

Yep word of mouth has sold out the stadium… first time ever… 30,000 plus to a club football match in NZ …. Amazing!

Lesson for us in business… people talk and influence others… give people a good experience… no bull you say … so simple yet so easily forgotten!!!

Go the Nix!