Preferred Client List v Preferred Supplier List

Posted on July 20, 2018 by jameslai | Recruitment

Preferred Supplier Lists are the bane of many a recruiter’s life. Those 3 little words can be so powerful, indeed be so counterproductive even. Don't get me wrong, I understand the commercial and strategic reasons for organisations to operate a PSL; usually they are about consistency, streamlining, efficiency and to ensure operational uniformity throughout a business or organisation. But, very often they can undermine competition, be detrimental to success in the recruitment process. They can restrict an organisations or an individual hiring manager’s ability to act in the best interests of everyone.

What few organisations realise however is that there are many recruiters who similarly operate a 'Preferred Client List'. When you hear about exceptional service levels, significant added value services which are inclusive, consultative recruiting, solution recruiting and client partnering in recruitment circles, it is these Preferred Clients who are usually talking about them. Their experience of recruitment is verging on sublime, regardless of whether they have an in-house capability or a PSL; they view and work with their recruiters in the same way as they would work with business consultants, accountants and so on. As an extension of their business, their recruiters are integral to their strategy, vision and corporate success.

So, how do you become a Preferred Client and get on that PCL? How do you ensure that you and your organisation are getting more value, more services, more attention and essentially a more successful recruitment solution?

Follow these simple steps:

1. Be honest about the nature or stature of the requirement.

Success only (contingent) recruiters focus on the requirements that have a high and genuine chance of producing a result, a fee. Ensure that you explain to your recruiter that the vacancy has been fully signed off, the budget approved and agreed and that the timelines are genuine.

If you are perusing the market for different reasons, maybe in consideration of growth, or contingency planning then tell your recruiter this up front. They should still be keen to provide you with a service, but at least they can prioritise accordingly and have realistic expectations. As a Manager I ask my Consultants what the % is of success on their vacancies. The number of times I’ve heard answers quoting 90% and then 8mths later the same vacancy has still been live. If you are window shopping, tell us, there are good valid reasons for this activity and we will help if we can. 

2. Reveal any potential internal or existing candidates.

Very often you may have a number of internal candidates, or your line manager may know someone they want to approach directly. This is always the preferred option of course. But if you really want to ensure that you are being objective and getting the absolutely best candidate for the job, then get your recruiter to include these candidates in their process.

Everyone thus feels inclusive; the process has consistency and transparency. If the internal candidate is successful, at least everyone knows including the candidate that they have secured the job on merit. Okay, you may have to pay for this inclusive service, but it usually is worth it.

In the event that the internal candidate doesn't secure the role, you should have some really concrete personal and professional developments points to get them ready for the step up when a new opportunity arises.

3. Exclusivity creates win / win situations and naturally leans towards a premium level of service.

By engaging a recruiter on an exclusive basis you are upping the ante, so to speak. The recruiter knows that they have a guaranteed fee but they also know that you are relying on them to get the result you and your organisation needs. The pressure to deliver should create a positive urgency and a high degree of focus. Ensure that you agree an assignment brief which outlines everything in detail (2 pages will suffice) and includes things such as timescales, interview schedule, the process (this should include any elements such as video interviewing, testing and so forth) to ensure that there is measurable activity and visibility throughout.

4. Do not be afraid of retainers.

Retainers can be a brilliant and unique tool if utilised correctly. If you have strategically critical positions vacant within your organisation and effectively everyday those desks are vacant is costing you money, then retain a recruiter to fill those seats and to fill them quickly.

By paying a retainer you can basically jump the queue and dictate a recruiters work schedule. If you want them to dedicate 50% of their working day to your needs everyday for the next 3 weeks to get you fast, focused and successful results then retain. If you want some great advertising developing, content to use as inbound marketing and some powerful social media campaign running to create a magnet for those hard to find candidates it costs your recruiter money up front to do this properly. Invest in them to do this.

Okay, many of us have had some form of negative experience, so agree some assurances up front. Personally I prefer a 2 stage retained approach on a 25% Assignment Fee and Final Completion Fee. The initial or up-front payment demonstrates your commitment to the agreed process, it pays for my time, my expenses and mitigates any risk in terms of my work allocation.

If you go down the 3 stage retainer route which is more traditional, don’t pay any 2nd stage until such a time as you have actually interviewed your short-list and acknowledged that they are of the standard requested. If you pay it, then interview and discover that none of them are suitable for consideration you may be in trouble. Effectively you have paid circa 2/3rds of the total fee and have nothing but a fistful of useless CV's.

5. Work with your recruiter to enable them to create and develop a candidate briefing pack and also get involved with any advertising copy.

Many organisations overlook how critical it is to ensure that prospective candidates are fully and accurately briefed especially at application stage, and informed about an opportunity and an organisation. Many recruiters will do what I do before finalising a short-list. They will request prospective candidates to research and then demonstrate why they want to work for your organisation, what challenges and opportunities the role will offer, what makes them a good match for the position. It is difficult for them to do this if they have an out of date job spec and the ‘About Us’ page on the website.

I recently received a job specification from a client that was 'revision 3 - 21st February 2010'. Imagine the changes to that organisation in terms of size, technology and market place over that 6 year period. Your recruiter can research and re-write the job specification, let them talk to the hiring manager directly to articulate what you really need. Actively ask them to use on-line assessment tools to test the vacancy and the characteristics required.

Encourage your recruiter to develop a Company Briefing document so the candidates get a flavour that may not be so easily visible on the internet. Things like non confidential vision and strategy are important, a brief outline of recent growth and the reasons why for example.

Finally, ask your recruiter if you can have some input into the advertising copy. Advertising is a huge PR and Branding opportunity, assuming the vacancy isn't confidential. Use this opportunity to reach another audience, shout about your success, let your competitors and their employees know how great you are. Your recruiter should be an expert at developing and using social media channels, PPC and sponsored content.

6. Regular reporting and communication.

Agree a schedule for progress reports, this is critical. You do not want to be sitting there after 6 weeks waiting for a short-list only to find that your recruiter hasn't got one. Agree to an email or telephone report once a week. Ask for a benchmark candidate early in the process so you can both agree that everyone is on the same page. If not, at least any confusion or misinterpretation can be rectified early. If the schedule is slipping you can address it then, as opposed to when it is too late.

Commit in advance to a date for short-list discussion and approval, 1st interviews, and 2nd interviews. You will be amazed at how efficient the whole process becomes when everyone knows precisely what timelines they are working towards, including the candidates.

Critically if things begin to slip on your side of the agreement communicate this quickly and openly to your recruiter. They can adjust their timings, they can work hard to maintain candidate engagement. But they can only do this if they are party to the frustrations or issues you are experiencing.

7. Trust your recruiters and listen to their advice.

Professional recruiters will advise you objectively, they should give you any additional information that they think pertinent, they should highlight any particular areas of concern that they think you should focus on in terms of particular candidates. Good recruiters will counsel objectively on which candidates they think stand-out. Listen to this advice. I recently had a client who was determined to not 2nd interview a candidate, the candidate who I thought was the stand-out star. I finally persuaded them that for the sake of an hour, what did they have to lose. They did three 2nd interviews instead of 2, and offered the candidate they were going to eliminate 24 hrs later.

Your recruiter may not always be right, but at least listen to what they have to say, this is a significant part of the expertise you are paying for. Remember it is as much in the recruiters interest to ensure that you get the absolutely best candidate, they don’t want to repeat the whole exercise for free.

8. Agree fees in advance.

Personally regardless of whether an assignment is retained or contingent I prefer fees that are flat as opposed to % of salary. This is my personal preference. Flat fees enable everyone to budget and cost in advance. If you are paying a recruiter 27% of salary on a position that could pay anything from US$80,000 to US$120,000 the potential difference in the fee is over US$10,000. Discuss mutually agreeable fees up front, ensure they are in writing and signed.

I have a scenario at the moment where the candidate we really want is probably going to cost us 35% more than we anticipated. That's a significant increase in cost and budget for my client. Imagine how delighted they are that we are working on a flat fee. I haven't done any more work so why should I charge them more?

9. Guarantees, Contingency Planning.

Even the best recruiters just like the best HR Directors and CEO's don't get it right every time. Make sure that contingency plans are agreed and transparent. What happens if the candidate doesn't start, leaves within their probationary period or just does not fit in. My advice is to initially have it agreed that your recruiter will find a replacement within a specific timescale for free (maybe sometimes expenses are valid). In the unlikely event they fail to achieve this, then a scale of rebate should be in place.

As a recruiter with over 20 yrs experience and having recruited on 5 continents I absolutely relish the whole process. I love exceeding client expectations, get genuine pleasure from placing candidates and usually enhancing their career and opportunities.

But it is the combined wins that make the job really rewarding. Any good recruiter should thrive on enabling your business to be better equipped to achieve its strategic goals. Work with them and encourage them to want to work with you.

Remember great hires reflect on you as the hiring manager or HR Representative. A really good recruiter should effectively make you look great as well.