Preferred Supplier List.
If those three little words accurately describe how you approach hiring at your company, they could also explain how your business is placing restrictions on itself.
Preferred supplier lists (PSLs) have been a major element of the recruitment process for businesses for a long time, and while many recruitment agencies might dread the phrase “sorry, we only work with recruiters on our PSL”, we don’t.
That’s because we understand the benefits of using preferred vendors. After all, this business model extends to industries way beyond the recruitment service sector.
In this blog, we’re taking an objective approach. We’re weighing up the pros and cons of PSLs and advising how businesses can keep their preferred supplier list, without relying on it or allowing it to limit their search for top talent.
Read on for preferred supplier lists, explained in simple terms, so you can identify ways to improve your hiring process.
What is a preferred supplier list in recruitment?
A PSL is a list of pre-approved recruitment partners that a business will consult when they need to hire permanent, contract or flexible workers. This is who you trust and are happy to work with – you’ve probably worked with them before and deem them to be an effective supplier.
If you’re in charge of hiring at a company, you might refuse to work with any headhunter that isn’t on your PSL.
It’s all based on a PSA (preferred supplier agreement), which is a formal contract that says two parties will work together when the supplier’s services are needed and is usually defined by set conditions.
What are the benefits of a preferred supplier list?
The agreement is designed to benefit both parties. It gives businesses instant access to their preferred vendors that tend to specialise in finding talent for their industry. Some benefits of a PSL include:
- Access to a consistent and efficient recruitment service and the chance to work with someone you’re already familiar (and comfortable) with.
- Financial benefits. Some recruiters will reduce their fees to clients if they put them on their PSL, to encourage businesses to work with them and ensure the agreement remains mutually beneficial.
- You get to develop a partnership. Maintaining ongoing relationships gives a recruiter the chance to better understand your company and its culture, which could be advantageous to the talent search.
Get the most out of your supplier list by resisting the urge to send a job to everyone on there and letting them race for the best candidates. Instead, choose your partner carefully based on each individual job. By employing specialists and giving them exclusive access to a job, they’ll be able to deliver the best results (and you can be sure the same candidate isn’t being approached by more than one recruiter.)
What are the downsides of a PSL?
While many hiring managers are quick to limit their talent acquisition search to their preferred supplier list, they might not realise this could actually be harming the process.
If you’re rigidly sticking to your list of preferred vendors, you could be hurting your recruitment efforts in the following ways:
- You’re restricting your candidate reach. While the fee might be lower, sticking to a PSL means your talent pool is limited to whatever your suppliers can offer. What if there’s a headhunter out there that is working with an individual that could be the perfect candidate for you? Don’t rule them out before you even begin your search.
- Your supplier may not be able to fill a niche role. Partners on your PSL can’t fill 100% of your roles 100% of the time – and assuming they can is counterproductive and time-wasting. If you’re trying to fill a niche role and are looking for a specific skill set, your current partners might not be equipped to fill it.
- Business growth could be affected. As your business grows, the need to create new positions will usually arise. Vendors on your current preferred supplier list might not have the knowledge or insights around these roles, meaning they’ll struggle to pitch them to potential candidates and to understand exactly what you’re looking for in a new hire.
So, what can you do about it?
Our recommended solution is to take a flexible approach.
You’re in a good position from a hiring point-of-view, because you’ve already invested time into your talent acquisition approach by building a PSL in the first place. But, by limiting the entire process to that list, you could be limiting your possibilities.
Your main objective is to secure the best available talent, so if that means searching outside of your usual pool of suppliers, that’s what you should do. Instead of replacing your PSL, we recommend holding onto it but not ruling out the possibility of supporting your recruitment efforts by working with a different external headhunter.
Support your hiring approach with a Dynamic recruitment service
Dynamic Search Solutions is trained in headhunting the best candidates for the IT market. While we appreciate that you like the reassurance of a PSL, we work with exclusive candidates that you otherwise wouldn’t get access to.
If you’re reluctant to work with an external recruiter because you advertise directly or have your set of preferred suppliers, consider switching to a more flexible approach. Our recruitment service is free until we place the right candidate at your business, so we suggest using it in conjunction with your own hiring efforts to solidify your recruitment process.
That way, you get to discover what works best for you.
Keep your PSL but stop restricting yourself to it. To find out more about supporting your recruitment process to find the industry’s most sought-after candidates, call Dynamic on 0208 629 6000.