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Do preferred supplier lists promote poor and illegal practices?

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Are best-in-class hiring processes suffering because of today’s PSL and internet recruitment techniques? David Partridge, Head of Executive Search at Energy Commodity Resources, shares his views.

Why does the specialist strategic search wanted by executive managers so often become generalised because the responsibility is taken out of their hands by their HR departments and channelled through MSPs and PSLs?

With this in mind, a few weeks ago we launched a new specialist strategic executive search company dedicated to supplying and head-hunting energy IT and business executives for the energy market. We call the company Energy Commodity Resources.

Having recently completed a review of the talent processes of a number of the FTSE 100 companies, we were shocked to find our suspicions confirmed. Most of them manage their recruitment talent process through their HR departments, which in turn use the internet for vital recruitment methods. These processes take away responsibility and involvement from the recruiter and put them in the hands of a portal internet process. They also miss out on personal assessment and detail, they are not impartial and they do not protect the privacy and confidentiality of the individual.
In other words they are not the best way to recruit the best talent in today's competitive market.
We would even go so far as to say that the use of Managed Preferred Suppliers and Preferred Supplier Lists can promote illegal practice and poor service.
We discovered in our research that quite a number of the large global energy companies are particularly dependent on the HR-MSP-PSL recruitment route. That way they lay themselves open to a talentless hiring process for IT staff and ETRMs because their HR departments do not appear to understand the information technologies that the company actually utilises for its day to day trading activities. How can HR teams recruit qualified, best-in-class talent if they do not understand their companies' technologies and how they are applied?
We could cite many examples. but here is just one: a company that says it has an MSP-PSL process in place because it believes the main aim must be to reduce cost. How short-sighted can that be? Yes indeed, if they chose to go the MSP-PSL route, they may save money, but they will end up putting their main supplier companies in a no-win business situation. In this instance the fact that the MSP who managed the PSL arrangement for this client also owned a number of recruitment contingency agencies on the PSL list meant that the client was actually paying double for the same service ,while also allowing all the MSP owned agencies to obtain the candidates CV.
We tested the water to see if we could break through this PSL process.
We supplied a leading ETRM candidate who was only registered with our consultancy to an MSP-PSL client. Suddenly this candidate wondered why he had been contacted by a number of MSPs and PSL agencies that the MSP owned, when he was only registered with one head hunter. Not only had this process put the client in direct competition with himself but it had also alerted the PSL to a fantastic candidate. This could have been avoided if the client had allowed for the facility of a strategic search company in his MSP procurement process.
In complete breach of his privacy and confidentiality the candidate was then bombarded with a number of PSL recruitment agency calls stating they had the ideal job for him, thus pulling him away from the initial company he applied for and effectively marketing him to every company under the sun. All this despite the fact that the candidate had not give permission for these agencies to represent him at other client sites.
Have large organisations totally forgotten that the number one rule in engagement hire is privacy and confidentiality for the candidate? When that is not respected the quality of the candidates on offer is likely to suffer.
So what should happen?
Our approach is simple. Firstly, if successful recruiting is to be achieved, confidentiality has to remain all the way through the recruitment process. Secondly, company managers should be allowed, under a strict framework, to assist in the assessment of talent candidates. Effectively the right and power to do so should be taken back from HR departments and given to senior hiring managers under framework procurement agreements. Thirdly, the best results are more likely to be achieved by the inclusion of a dedicated and specialist approach in the recruitment process rather than a reliance on the scatter gun approach. If Manchester United are looking for a new striker, they don't just throw it all open to the world. They use the best talent scouts.
Surely it is time these large companies ended these practices and really started to promote best-in-class talent-hiring techniques?

Having recently completed a review of the talent processes of a number of the FTSE 100 companies, we were shocked to find our suspicions confirmed. Most of them manage their recruitment talent process through their HR departments, which in turn use the internet for vital recruitment methods.

These processes take away responsibility and involvement from the recruiter and put them in the hands of a portal internet process. They also miss out on personal assessment and detail, they are not impartial and they do not protect the privacy and confidentiality of the individual.

In other words they are not the best way to recruit the best talent in today's competitive market.

We would even go so far as to say that the use of Managed Preferred Suppliers and Preferred Supplier Lists can promote illegal practice and poor service.

We discovered in our research that quite a number of the large global energy companies are particularly dependent on the HR-MSP-PSL recruitment route. That way they lay themselves open to a talentless hiring process for IT staff and ETRMs because their HR departments do not appear to understand the information technologies that the company actually utilises for its day to day trading activities.

How can HR teams recruit qualified, best-in-class talent if they do not understand their companies' technologies and how they are applied?

We could cite many examples. but here is just one: a company that says it has an MSP-PSL process in place because it believes the main aim must be to reduce cost. How short-sighted can that be? Yes indeed, if they chose to go the MSP-PSL route, they may save money, but they will end up putting their main supplier companies in a no-win business situation.

In this instance the fact that the MSP who managed the PSL arrangement for this client also owned a number of recruitment contingency agencies on the PSL list meant that the client was actually paying double for the same service ,while also allowing all the MSP owned agencies to obtain the candidates CV.

We tested the water to see if we could break through this PSL process.

We supplied a leading ETRM candidate who was only registered with our consultancy to an MSP-PSL client. Suddenly this candidate wondered why he had been contacted by a number of MSPs and PSL agencies that the MSP owned, when he was only registered with one head hunter.

Not only had this process put the client in direct competition with himself but it had also alerted the PSL to a fantastic candidate. This could have been avoided if the client had allowed for the facility of a strategic search company in his MSP procurement process.

In complete breach of his privacy and confidentiality the candidate was then bombarded with a number of PSL recruitment agency calls stating they had the ideal job for him, thus pulling him away from the initial company he applied for and effectively marketing him to every company under the sun. All this despite the fact that the candidate had not give permission for these agencies to represent him at other client sites.

Have large organisations totally forgotten that the number one rule in engagement hire is privacy and confidentiality for the candidate? When that is not respected the quality of the candidates on offer is likely to suffer.

So what should happen?

Our approach is simple. Firstly, if successful recruiting is to be achieved, confidentiality has to remain all the way through the recruitment process. Secondly, company managers should be allowed, under a strict framework, to assist in the assessment of talent candidates.

Effectively the right and power to do so should be taken back from HR departments and given to senior hiring managers under framework procurement agreements. Thirdly, the best results are more likely to be achieved by the inclusion of a dedicated and specialist approach in the recruitment process rather than a reliance on the scatter gun approach. If Manchester United are looking for a new striker, they don't just throw it all open to the world. They use the best talent scouts.

Surely it is time these large companies ended these practices and really started to promote best-in-class talent-hiring techniques?

David Partridge is Head of Executive Search at Energy Commodity Resources.

© 2009 All rights reserved. Reproduction in whole or in part without permission is prohibited.
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