Is temporary recruitment the latest government scandal?

According to trade union GMB, between 2006 and 2007, UK councils spent just shy of £2 billion on temporary and agency staff. That’s a sizeable chunk of annual budget by anyone’s standards. That local authorities are major employers of temporary staff is not news. But the amount of money spent, and the extent to which councils are dependent on non-permanent staff is but one of a number of challenges that councils face when recruiting temp workers.

Temporary recruitment has always been a thorn in the side of embattled HR departments across the country. They need staff quickly, if not immediately. They need staff to be reliable and to turn up when they are supposed to. And they need to get staff at the right price. Unfortunately, most HR departments do not have the necessary internal processes or resources to deliver a consistent supply of quality, cost-effective temporary staff.

There is no shortage of advice about aligning the recruitment function to the overall business strategy and demonstrating the value that HR can bring. But while talent management, succession planning, and diversity strategies have jumped to the top of the agenda, temporary recruitment and the management of preferred recruitment suppliers lingers neglected at the bottom of the pile. And because HR departments are not necessarily equipped to respond to immediate tactical problems, the hiring of temporary staff has become fragmented. Rather than going through the established channels, middle managers at social services, education or buildings management take matters into their own hands and establish relationships with a small number of recruitment agencies. This is a dangerous situation to be in. Immediately the economies of scale that centralised recruitment offers are gone. But more importantly, recruitment agencies with a local fiefdom of specialisation and a captive audience can get away with charging a premium for their services. The incentive to keep delivering reliable, effective workers has gone; and with a limited choice of recruits on offer, standards are not necessarily maintained.

This is where it becomes critical. Quite aside from the money spent on temporary recruitment, there is a real concern about quality of service. Local authorities have become much closer to commercial organisations in terms of transparency around service delivery, value for money and accountability. They are endlessly measured and monitored. They are required to produce reams of data. Strict standards for performance must be met. But constituents don’t need annual reports to tell them when their local authority is delivering quality and when it’s not.

People don’t notice the productivity levels of a head of department, the transformational skills of a change manager, or the impact of a new geographical information system. They notice when their hospitals and schools are clean. They notice the catering dropping at elderly relatives’ care homes. They notice when their bins have not been emptied, and streets not swept. Yet these day to day interactions with the public are where the vast majority of the temporary workforce is to be found. So if someone does not turn up as promised, has a bad attitude, or is simply not qualified to do the job properly, it inhibits the council’s ability to fulfil its remit. It wastes money. And it damages the council’s relationship with its major stakeholders – the local citizens and taxpayers.

The problems associated with temporary recruitment have long been recognised and have given rise to the provision of recruitment process outsourcing. Handing over the problem to a qualified third party and putting a series of SLAs in place is certainly an attractive proposition. But while it may eradicate some of the more pressing issues, it doesn’t miraculously solve all the problems associated with temporary recruitment. Where RPO is deployed, fragmentation invariably disappears. But the master vendor relationship that replaces it brings its own particular perils – not least cost, complacency and favouritism. Instead, what local authorities need is a solution that ensures that recruitment agencies’ incentives are in line with those of the final recruiter. A system that provides a competitive environment in which recruitment agencies continuously strive for preferred supplier status and the contracts that come with it, has proved to be the answer.

Automation is the key here, and although it may run counter to the prevailing orthodoxy in many HR departments, it can help select the right employee, with the right skills at the right price. This form of recruitment process management cuts out the master vendor and replaces it with a network of approved and audited suppliers managed through an automated software platform. Because it offers access to thousands of recruitment consultancies across the country, users can select from both specialist and non-specialist suppliers whenever they need to – without extensive red tape and bureaucracy. They also benefit from significant economies of scale and the improved commission rates that have been negotiated. But what really distinguishes this model is that it is a dynamic and truly interactive operation. Rather than simply accessing a static database of potential recruits, the system is able to measure agencies’ performance against a balanced scorecard, a series of pre-established benchmarks that take into account both quality and cost of staff, and tier them accordingly. It will always go to agencies that have proved themselves to be reliable and effective first. If the top tier agencies do not have someone on their books with the requisite skill-set and attributes, or if their costs are too high, the system moves on to agencies on the next rung down and so on. However, if an agency fails to deliver, or if the worker they send doesn’t meet expectations, then it swiftly loses its tier one supplier status and with it first shout at the most lucrative contracts. In an over-saturated market, that’s a risk that an agency can ill-afford to take. For local authorities it’s a win-win situation. Agencies are immediately motivated to provide quality, cost-effective staffing options. The middle man is cut out completely. And HR departments can continue to focus on adding value in more strategic areas of their operations.

* - Article from publictechnology.net and written by Mike Trevor CEO of Comensura

I have written on RPO and more particularly Master Vendor agreements before, so agree with Mike regarding the Master Vendor failings. But to basically say that middle managers cannot handle recruitment unless they have an automated system does not wash with me. A network of approved and audited suppliers is not a bad idea but generally, in my experience, works against small agencies. These same small agencies often offer the customer service and personalised processes that really benefit recruiting managers. They are more willing to offer reduced fees and go that extra mile to satisfy the client requirements. The main point of this article started on the cost of temporary recruitment for Local Authorities - £2 billion. My suggestion would be: -

a. Find out what of this cost are actually recruitment / agency fees
b. Work out what is a reasonable market rate to pay for recruitment in different sectors
c. Get HR or Procurement, or even a central Government body to send a guideline to all recruiting managers on cost and what level local authorities are allowed to pay

This would mean managers can still select agencies that work well with them but all agencies are working to the same costs. This would inevitable cut down on costs and keep competition and service quality alive and well. Its also a lot simpler than using an automated approach. My experience of this automated software is that it slows the whole process down as it adds an extra person / system into the process. You also have to pay for the use and maintenance of the software.