By Ken Brotherston, Chairman - TheJobPost

In a recent survey of 158 HR & Resourcing professionals TheJobPost explored the effectiveness of Preferred Supplier Lists (PSLs) and how it impacts today’s organisations.

A prevalent theme coming out of the research was the compliance (or lack of) of the hiring manager, with:

  • 63% of respondents declaring hiring managers making unapproved hires was the second largest challenge of managing a PSL
  • 68% of respondents stating that hiring managers regularly engage with organisations outside of the PSL
  • Respondents predicting that the challenge of the out of process hiring manager is set to increase over the next five years

Although hiring manager compliance has always been problematic for organisations, to fully understand why this is a trend that’s on the rise, we can look at today’s recruitment market.

An increasingly polarised recruitment market

In 2013 the International Confederation of Private Employment Services reported that the global recruitment industry was worth £300 billion and comprised 260,000 agencies.

Despite popular belief, this is a growth market with these stats showing a 9.6% year on year growth.

In the UK, the market is worth £32 billion[1] and comprises 19,440 agencies; 75% of which employ less than 10 people

This increased polarisation is reflective of the increased specialisation of recruitment agencies and is projected to continue as skills become more niche and the war for talent gets more intense.

Finding these increasing niche agencies

Other challenges with running a PSL highlighted as part of our research included:

  • Time (65%)
  • Too many agencies to manage (60%)

By looking more closely at the statistics we discovered that half of the respondents reported having less suppliers to manage than five years ago. We believe that the agency mix of the PSL can help explain this time challenge further.  When looking at this mix, only the number of specialist/niche agencies had seen an increase over the last five years, with National and Executive Search both reducing:

  • National -42%
  • Specialist / Niche +5%
  • Executive Search -15%

The time demands employers are facing could therefore be related to the level of complexity associated with finding these increasingly niche agencies, negotiating terms and all the administration taken to onboard them through to compliance and delivery.

Hiring mangers relationship with the PSL

The ongoing challenge caused by these elusive specialist agencies was again verified in our research with almost 1 in 2 employers stating they were unable to fill specialist roles via their PSL.

So with specialist candidates becoming increasingly difficult to secure, can you blame your hiring manager for being resourceful and seeking the talent they need in which anyway they can find it.  Can you really expect them to be restricted by a process that prevents them from finding the best talent in the market?

Technology can enable compliance

 Respondents to our survey identified the increased role that technology is seen to play in the management of PSLs, with respondents shouting for a ‘central automated portal for agency submission’ and ‘useful data and insight’ to support the management process (with less administration, of course). 

These platforms do exist (For example, TheJobPost, RecruitLoop, Go Scout Go, and Bounty Jobs) and it would seem that the process needs to be updated to fit the needs of the business with a simple technological solution providing the answer to supporting a compliant  solution for working in harmony with hiring managers.

Without this there is a huge risk of forging war with your line manager.  The most shocking statistic of our research suggested just that, with 64% of respondents stating they had rejected a suitable candidate from a non-preferred agency, suggesting that candidate suitability is directly linked to a PSL.

To request a full copy of the research, please email contactus@thejobpost.co.uk

The Effectivness of a Preferred Supplier List (PSL) Infographic


Ken is a highly experienced Chairman and CEO within the Human Capital Services sector. He has wide-ranging experience of managing public and private businesses through significant change including high growth and turnarounds as well as extensive international experience and has also led a number of businesses through successful sale processes.

www.TheJobPost.co.uk

[1] 2014 Recruitment Employment Confederation