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08 Dec, 2014

The Agency Dog Fight

Staffing, recruitment, hiring, resourcing, human capital however you choose to define our industry one thing is for certain, the customer isn’t short of suppliers to choose from.  No doubt some good, some bad, and many indifferent.  No doubt every provider has their own story to tell, a unique value or service proposition that separates their firm’s offering from that of its competitors.  So my question is: When offered with so much choice and specialism, why do so many customers choose to give the job brief to multiple suppliers?  Why has this trend become the accepted norm within our industry?  What is driving the desire to work with multiple suppliers on the same brief? What risks are customers exposing themselves to by adopting this approach?

My question is not driven by fear of competition; industry needs competition in order to increase service levels, create value and identify new strategies to keep all industry players on their toes.  This is about challenging the best method of getting the job done for the customer. 

Getting the job done…

So here is the basic question – what is the best way to get the job done for the customer? What approach will identify the right shortlist of candidates for the client to review, select and hire, all backed up by a good customer service?  If I was ever lucky enough to buy a piece of land and build my own home, I would hire a builder. First, I would review a selection of builders to gain an insight into their approach, prices and previous success stories and then I would ask one of them to build my home. Imagine the look of horror on the builder’s face if I said I am going to go with 3 builders and whoever builds the best house I will pay my money to!  There is a similar issue trending at present in the highly competitive design and marketing industry, where blue chip firms invite 3 maybe 4 design agencies to pitch for a piece of work.  A pitch involves the agency investing a significant amount of resource into the pitch, creating ideas, concepts and even starting to develop the ideas into working briefs.  The customer meets with all agencies and chooses the agency they wish to move forward with and the defeated agencies go back to their offices to dedicate yet more resources for another pitch.  This multiple vendor approach will inevitably reduce service levels, impact quality and create an unhappy, frustrated customer outcome when they fail to get the result they set out to achieve.  I have always believed that a job well done from a FourthLine perspective, is when we take on a brief from a customer, we instinctively know who will form our shortlist from the active or passive network we have diligently built up, the customer admits they could offer all of the candidates submitted, the candidate accepts and subsequently embarks on a successful career with the company, securing many promotions in the process.   We use this as our guiding light when we take a brief on from a new or existing customer, will we get a result for our customer? Can we deliver against the brand promises we measure our service quality against? If the answer is yes we will take the brief on and set to work.  FourthLine is a truly focused business, we know our strengths and we also know our delivery weaknesses.

Choices facing the customer…

So why do hiring managers choose the multiple supplier route? Does the hirer feel they are far safer by hedging their bets? That the agency might not have the right candidate network? That they might not be able to find me the right person? I need to make a hire quickly so I would prefer to cast the net far and wide? I have good relationships with many suppliers so I want to be fair and give them a chance? My requirement is in a candidate short space so I need to use multiple agencies to ensure we stand the best chance of identifying an available candidate. I do agree that some of the above scenarios require a multiple agency search but these instances are few and far between and more often than not a single agency approach will create the result desired by the customer.

Hidden Risks facing the customer

Delivering against a customer brief whether a detailed search is required or not requires motivation, energy, desire, determination, influence, diligence not to mention skill and expert judgement.   So imagine how motivation is impacted when you hear that your candidate network has been approached 3, 4 or 5 times by other agents all claiming to have a better client relationship or more salary on offer. Imagine how the customer brand is perceived in the wider market when the candidate receives multiple agency approaches and candidates start to question why the company is so desperate to make this hire.  The end result is an unsettled candidate.  It takes time to ensure that quality processes are achieved on behalf of a customer and by the customer releasing the vacancy to multiple suppliers – it’s like someone firing the starting gun and it becoming a game of fastest finger first.  This game of speed means customers are forcing their suppliers to overlook quality and judgement by forcing the supplier to create their shortlist as fast as possible due to the inherent competition they are pitching against.   So what are the risks associated with “widening the net”? Firstly the experience of the candidate is negatively impacted by the uncertainty created by a multiple agency approach which often means they choose not to apply because of the furore created the client then misses out on the best candidate. There are 3rd party financial risk implications caused by the duplication of candidates, where multiple agencies believe they hold representation of the candidate creating a double invoice for the customer. Reputational damage through the eyes of the candidate and potentially the supplier too.  Increased numbers of suppliers naturally leads to increased process work load which in turn leads to an increased days to hire KPI which no doubt negatively impacts business performance.

An exclusive winning partnership…

There are risks associated with choosing the multiple provider route as outlined above and I am not advocating that exclusive arrangements are a one way ticket to hiring success, there will of course be bumps in the road but these challenges can and will be levelled out by choosing the right provider. Exclusivity with the right provider will see customers experience increased service levels, exclusivity will allow providers to leave no stone unturned when searching the market, exclusivity also creates the capacity required to perform high levels of due diligence whilst protecting the customers reputation through the search being performed in a discreet professional way.    As an industry we need to look forward and recruitment business owners need to ask themselves are they happy with the competitive landscape? Are they happy with the new norm of multi-agency approach? From a customer perspective, exclusivity should not be seen as a dirty word and nor should it be seen as an opportunity to chip away at margin. Exclusivity should be the norm, the standard, the only way. Like building a house, you only need one builder but you need to choose the right builder for your project. 

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