Preferred suppliers lists: A hindrance or not? A case study

“We have a PSL (preferred suppliers list) and are not looking to review this anytime soon.”

This is the way the majority of recruitment approaches come to an abrupt and unsuccessful end – we think it’s wrong. Now you’re most likely thinking “wow a recruiter saying that we  shouldn’t have a PSL”, we are not saying that at all.

Frankly, we agree, having a PSL can be an efficient way of going about things – you have fewer voices to deal with, you can devote more of your day to dealing with your day-to-day duties and it’s an easy way to deflect your 34^th recruitment approach of the week so far!

What we are trying to say is that if you don’t consider every available avenue when launching a new recruitment campaign, you could be doing yourself an injustice.

The Information Technology sector is currently booming and with that level of prosperity comes a number of issues. Dealing with the demands of a new project leads to the need for new hires – often required on an ASAP basis – and as has been the case for a number of years now, the scarcity of available tech talent soon becomes apparent.

Combating this shortage is difficult and is the traditional motive behind employing the services of an external recruiter. Recruiters are experts at unearthing talent which matches the needs of the business. The price you pay for a recruiter (between £2,000-£15,000) is small in comparison to the multimillion-pound project you may lose out on if you don’t bulk up your engineering team (if you want to get more value from your PSL, follow this link for how). You may not lose the project to a competitor but you will likely miss deadlines, frustrate a few influential people along the way and likely be overlooked the next time important work goes out to tender. Each agency has its own qualities, and some align differently to the company’s values and needs – this is where a PSL comes in.

A handpicked, carefully curated group of niche suppliers who have successfully convinced you of their ability to solve your recruitment headaches through carefully worded correspondence and slick presentations. What could possibly go wrong?

You may think your thoughtfully selected PSL has got the market covered but everyone has access to talent others simply don’t – previous placements, personal acquaintances, long term relationships, unique knowledge of that perfect passive candidate just waiting for the right opportunity to come along before they make their next move. You never know what’s out there until you take a look.

We appreciate the difficulties in having to manage multiple suppliers but if you’re actively recruiting – especially for niche & hard to source skills – where is the downside to keeping an open mind when considering more ways of bringing in candidates?

If you had the potential to earn more money from exploring a few different avenues and all it would take is a few more conversations a week, would you turn it down? Probably not.

Conversely, if you had your 2 or 3 standard streams of income and none of them were generating the income you were expecting, would you not consider alternatives? It shouldn’t be any different when it comes to recruitment as you will have:

• An increased chance of getting a variety of quality, appropriate talent.
• The chance of being given different perspectives of the market so you can plan your hiring strategy accordingly.
• The potential of a new supplier being less challenging to work with & more efficient than one of your current incumbents.
• The chance of being able to get strike a better financial arrangement for the same level of service

Should a Preferred Suppliers List be reviewed more frequently? – YES.

Should you be open to engaging with agencies outside of your PSL? – YES

Here is why:

As touched on above, a company’s talent requirements should always be front and centre, not loyalty to a selected Preferred Suppliers List. Consistently finding the right talent at the right time should always come first. How can that happen if you are constantly limiting yourself to the same number of talent sources?

PSLs can underperform for a variety of reasons and at the first sign of this looking to be the case, action needs to be taken.

You should always consider what is on offer to the business and what is best for it. You should never settle for the same old, same old just ‘because’.

A PSL is exactly as it states – ‘a preferred supplier list’, with the emphasis being on the word preferred. It’s not enshrined in law and it certainly shouldn’t be so inflexible to the point that you could miss out on your next crucial hire out of simple misguided loyalty.

• Are all your selected agencies providing quality candidates across all their assigned vacancies?
• Is anyone on your Preferred Suppliers List only targeting the “low-hanging fruit” offering no service to your trickier roles?
• Has one of your agencies gone quiet?
• Have lines of communication broken down when you need vital information on what the market is doing?

If the answer to any of the above is yes then it can never hurt to open yourselves up to a new supplier or two, the grass may indeed turn out to be greener.

Still not convinced?  Here is proof:

Company A* had been on our radar for several years with us we following their successful growth and we had been in regular, passive contact with their head of talent. They had a PSL in place which was meeting their requirements and saw no need to engage our services despite the regular communication.

That was until they hit a wall with a business-critical hire that their PSL were unable to fill for several months. With frustrations growing and critical projects being delayed, they took the step of reaching out to a couple of non-PSL agencies known to them at that time.

We were one such agency given that opportunity.

Within 3 weeks the role was filled, the candidates’ notice was handed in and the hiring manager relieved of a huge headache:

“Candour Solutions did a great job of filling a Lead Software Engineer role that was proving very difficult. They submitted a range of quality CVs quickly and followed our process throughout.”

*Anonymity has been requested from the company.

If you want to ensure you get the candidates your organisation deserves then do drop us a line as we would love to provide you advice with the best way to maximise your recruitment efforts. Contact us at hello@candour-solutions.co.uk.