10 February 2014 | Jamie Horton
Temporary recruitment spend is one of the most complex categories to manage and the reason is simple economics. Given the diversity of need that a business may have, and the specialist or localised nature of recruitment agencies, joining the dots between demand and supply can be a challenge.
According to the Recruitment and Employment Confederation, there are well over 10,000 recruitment agencies in the UK operating from over 16,000 branch locations. Plus, there are over 1.5 million temporary workers on assignment each week in an industry worth more than £23 billion per year and rising. It is a highly fragmented market, which means for many large businesses, no single recruitment agency is likely to be able to meet all of your temporary recruitment needs.
It’s important to understand the complexity of need across your business before looking for suitable market options. I detail the two key areas of focus below.
Simply, the more complex your business infrastructure is, the less likely a single agency will be able to meet your needs. At the other end of the spectrum, a relatively simple infrastructure offers an excellent opportunity to consolidate supply and leverage spend with a single agency, preferred supplier list, or to develop internal capacity through an in-house model. To assess your business complexity, you need to think about:
1. Locations. The more locations that recruit, and the more diverse the location, such as in rural areas and/or where less transient staff (e.g. workers on lower pay grades) are sourced, the more likely you will need a local supply chain. This will often result in a higher numbers of agencies being used and it will be impractical to reverse this trend.
2. Business unit/departments’ autonomy. The larger the business, the more likely budgetary control and decision making will be devolved to individual units or departments. You will need to understand each business unit’s needs properly and ensure any procurement is flexible enough to avert maverick activity – otherwise your efforts to control the category could be in vain.
3. The variety of job roles and volume of temporary workers. If your business recruits for a range of disciplines, such as IT, office/admin, call centre and driving roles you will need specialist recruiters for each area. You may even need specialists within a particular discipline. For example, if you recruit for white collar staff at support, managerial and executive levels you may require three different agencies to meet demand.
The second area to understand is your hiring complexity. The more hiring managers you have, and the more temporary workers you use, the more recruitment agencies you are likely to use. It is also more likely you’ll have a fragmented or inconsistent hiring process across the business.
1. How supply meets demand. Ideally hiring managers ought to follow consistent approval and ordering processes. This is reasonable when there is a long lead-time, but doesn’t always reflect hiring reality. Many hiring managers order temporary workers at short notice, and out of normal office hours, for next day shifts - so waiting for someone to authorise an order may be impractical and counter-productive to service delivery. Understand the ‘business reality’ and what steps hiring managers take to recruit and plan, making sure agencies have on-call availability and performance indicators set against this.
2. Candidate scarcity. In certain jobs, demand for workers outstrips supply. It’s important to understand which roles are difficult to recruit for, and plan for this through your buying process. While every recruitment agency will believe they can fill positions with the right candidate every time, they do not necessarily have a ‘stock’ of ready-made workers available to deploy. You will need to understand their experience of delivery at your expected volumes and in your chosen locations. Reputation and national coverage are not enough – you may need a deep supply chain to meet demand, or risk off-contract activity. It’s worth talking to some specialist suppliers of scarce candidates to understand why they are scarce and what steps they take to address this – and remember, canvass the views of at least three suppliers. Common themes will appear across each, allowing you to understand universal rather than local issues.
☛ Jamie Horton is managing director at Comensura.
Further assistance on how to assess the complexity of your recruitment needs is contained in a free guide available here