It is time to question why recruitment is done the way it is and has not changed in decades despite no one being really that happy with how it is.
One aspect of recruitment we have not mentioned yet is something that affects a lot of candidates without them realising it. We are referring to the PSL. The Preferred Supplier List is a term for a list devised by a company featuring their approved recruiters. If a company has a PSL, they will only work with recruiters on that list. So far, so simple.
These lists usually contain between 3 and 5 agencies, but can feature as many as 10 depending on the recruitment needs of the business with the PSL. Those aren’t small numbers so there is a lot of competition still within that group.
Why would anyone have a PSL? Cost reduction will be a reason constantly given to justify them. PSLs can help when you have high turnover and the roles you are trying to fill are not especially specialist. Those looking to grow good, yet not especially deep, relationships with suppliers find PSLs very helpful too.
Some companies like to segment the agencies into the types of work they do, but then some just use the same few for whatever roles are going, even if they have no experience within that industry.
The problem with PSLs is the same problem that you find in any recruitment scenario where multiple agents or agencies are tasked with bringing forth a plethora of prime candidates. There is a scramble for the candidates, and they are often the same candidates, to fill the roles.
What can, and often does, happen is that when that one job is released to the PSL agencies, all hell breaks loose. The mad dash to find the candidates who are openly applying on job boards leads to a small number of prospects being approached by a number of recruiters. This is the same thing that happens when there are no PSLs but generalist recruiters are chasing the same commission. And it doesn’t generally make a company look like it knows what it is doing when it comes to recruiting.
Even though that is the system, it is still really down to networking. Growing key relationships is a good thing but that can sometimes lead to favouritism between the PSL agencies, with the favoured one getting a heads up from a friendly manager about an upcoming vacancy, giving them a head-start. While this doesn’t put the rest at a total disadvantage it can leave them disgruntled.
Despite advantages, all the recruiters are in the same boat of still being one of many with pot luck sometimes dictating the outcome. It can be a terrible business because even though they are officially on a list, it does not guarantee a thing.
80% of recruitment work is free, which means that 20% is recompensed. Those numbers are pretty wild as there is not another profession in the world where only one fifth of your working time is paid for. Let’s imagine that there are 10 companies on a company’s PSL, which means that 10 recruiters are spending all their time chasing candidates for that company. That means that hundreds of hours of work are being performed for no reward whatsoever. Of course, companies don’t mind that they don’t pay for the work they don’t have to pay for, but there is a better way.
When recruitment partners are mentioned, businesses usually shy away because they consider them too expensive. The simple fact is that the same money is paid, it is just structured differently. At the end of the search, the successful PSL recruiter gets paid, whereas the partner’s fee is staggered throughout the process. This style of doing things is actually easier and also doesn’t waste thousands of hours of work to get the same result. With millennials and gen Z-ers looking for more ethical workplaces, it can’t harm a business to spare a thought for recruiters.
The definition of madness is doing the same thing over and over again and expecting different results so perhaps it is time to lay PSLs to rest.
Curious about how Zenshin Talent can help your organisation? Contact us today for a no-strings conversation about your needs and our experience.