Make your recruitment budget work harder with PSLs

What are PSLs?

Preferred Supplier Lists (PSLs) are an increasingly common tool for non-profit organisations of all sizes to save themselves time and money.

A PSL, also referred to as a Preferred Supplier Agreement (PSA), is simply lists of approved suppliers who have committed to an agreed rate and level of service.  You would then advise your employees to either use these agencies exclusively or to consider them first for any new vacancies.

Usually to achieve preferred supplier status, recruitment companies have to meet a range of rigorous requirements on quality, price and service capability.  TPP is a preferred supplier for many leading charitable organisations, as well as a supplier of Buying Solutions, the national procurement partner for UK public services.

Why use a PSL?

The main benefits of using PSLs are:

• Save money – recruitment consultancies included in a PSL usually offer a discount on their standard terms
• Save time – vacancies can be filled more quickly by having existing relationships with recruiters.  It also allows your employees to save time searching for agencies and easily field calls from other suppliers.
• Better quality of service – recruiters you regularly work with will understand your organisation’s values and culture well and find candidates likely to fit in
• Guaranteed level of service – the expectations of both parties are agreed in advance
• Less administration – budgeting is easier with an agreed rate and there are fewer invoices to process
• Ensures a greater level of confidentiality and security of sensitive company information
• Ensures consistency, eg that all suppliers comply with your organisation’s ethical approach

According to research, over three quarters of business owners and HR professionals don't feel that recruitment agencies provide value for money. This feeling stems from using agencies which advertise and then flood their clients with huge numbers of unqualified CVs, without adding any additional value to the service.  But by carefully selecting the companies to be on your PSL, you can ensure a good level of service and value for money.

How to start setting up a PSL

Before you start putting together a list of recruiters, it is a good idea to go through the list of benefits above and decide which are most important to you.

Depending on the size of your organisation, you could choose to set up different PSLs for each department, playing to the strengths of different agencies.  If you opt for a single all-inclusive PSL, it is important to adopt a portfolio approach and include a variety of types of recruiters, from large generalist agencies to smaller specialist consultancies.  This will give you a range of options for different types of role .

TPP has a strong network of clients and candidates in the sector, which give us access to a large pool of skilled professionals who may not be actively searching for new roles.  Larger generalist agencies may not have the sector knowledge required to develop this network.

Other things to consider are:

• How long a list do you want?
• How many suppliers will you invite to apply to be on the list?
• How will you know when you have a list you are happy with?
• How often will you review your PSL?
• Are you going to use the same PSL for temporary and permanent staffing?

Evaluating recruitment agencies

Obviously, the discounted rate an agency can offer you is a key consideration when putting together your PSL, but don’t stop there.  There are other important criteria to consider that can affect the overall effectiveness of your recruitment.  Define which criteria are important to you, rank them in order of importance and apply a scoring system to the agencies tendering.

Key considerations are:

• Does the agency understand your organisation’s mission, values and culture, and the exact nature of your roles?  An agency that works in many sectors may have a large pool of potential candidates but not the expert knowledge of your sector required to successfully fill a vacancy.

• Is the agency’s proposal suitable to your needs?  Agencies often offer added-value services such as help interviewing candidates, or running psychometric or competency based tests that can save you time in shortlisting candidates, but you only should agree to pay for services you are likely to need.

• Can the agency reach passive jobseekers?  Or will they just post your vacancies on job boards?  You need to be sure they have a network of contacts in your sector to call on.

• Does the agency meet all candidates in person before sending CVs over?  This initial screening process is essential to ensure you only see quality candidates, but can be skipped by some agencies in favour of a high turnover.

• Review the track record of that agency in filling previous roles.  How many of their candidates were selected for final interviews?  If they filled the vacancy, how long did the candidate stay with your organisation?

Maintaining your PSL

It’s important to keep reviewing your preferred supplier list on a regular basis, both to ensure that you are getting the best possible value from existing suppliers, evaluate new ones and to guard against complacency.

Finally, keep an open mind – don’t simply reject CVs from agencies not on your PSL out of hand – they may have an exceptional candidate worth meeting.

How TPP can help

TPP also has expertise in assisting our client to set up a PSL. With our expert knowledge of the local recruitment market place, we are able to advise on rates, terms and conditions and the best recruitment companies to fulfil your niche skill-set requirements.

So whether you currently have a PSL or wish to establish one, TPP have the expertise and experience to assist with your needs.