In these turbulent times, it will come as no surprise to many of us that the recruitment market remains challenging. We see constant reports of low unemployment rates and high vacancies, which continue to impact both permanent and temporary recruitment.
A significant number of public sector organisations have a managed service provision in place for their contingent (or temporary) labour requirements. As these contracts come up for renewal, many organisations (or Contracting Authorities) find themselves asking how they can ensure they get the best value from suppliers, despite the unclear future of the recruitment market, as well as considering how they can ensure they generate a healthy competition when running their procurement process.
I’ve outlined some top tips below for Contracting Authorities to consider when faced with the renewal of these large, complex contracts.
Engage with the supply base
This might seem obvious in times when a market is undergoing rapid change, but I cannot stress enough how important it is to speak with suppliers.
It is suppliers who are facing these challenges day in and day out and will be able to provide invaluable insight as to how the market has changed since you last procured your managed service provision. Not only this, in a market where tendering activity is high and resource is stretched, engaging with your supply base early allows suppliers to plan for your tendering process, leading to a more efficient tendering period.
Avoid being too prescriptive
While it is of course key to have a clear specification outlining your ‘must haves’ and imposing positive obligations upon suppliers, keep in mind that each supplier will have adapted in recent years to ensure they can deliver your managed service effectively. Yet, these developments have taken different shapes for each supplier. In avoiding being prescriptive with regards to delivery, you provide suppliers with the space they need to demonstrate how they can meet your requirements. Be clear in the outputs you require but give space for unique solutions and delivery models.
Think outside of the box
This is a tip that’s always repeated but never explained. What does it mean to think outside of the box in respect of your managed service provision for recruitment?
It’s well known in the MSP recruitment space that we have seen a race to the bottom in terms of rates. While this can be considered fantastic from a budgeting perspective, it can also mean that some contracts are simply unattractive to suppliers. Thinking outside of the box here means thinking about what else you can include in your contract to attract suppliers, maintain competitive rates and deliver value elsewhere in your organisation. Can you incorporate permanent recruitment, statement of works, or even Employee Value Proposition (EVP) within your new MSP contract?
In thinking outside of the box, you should also think about how you view your MSP and how your organisation views them. If they are considered as an external party supposed to operate in a silo, you may not realise the true potential of your managed service provision.
Attractiveness is key!
While you may never have thought of your MSP contract as attractive, it really is key to consider how attractive your contract opportunity is to the supply base. Demand for recruitment services is high, resources within all organisations are stretched, and if your contract looks unattractive, you are likely to receive less interest from the supply base, which isn’t what any procurement professional wants.
In considering the attractiveness of your contract, you should be considering what it is you are asking of the supplier vs your commercial evaluations. Are you asking for a supplier to deliver a hands-on presence within your organisation (maybe two or three members of on-site staff)? If so, how does your commercial model account for this? Are your requirements made up of solely hard-to-fill roles, such as qualified social care workers? If so, you may need to think back to tip number three and start thinking outside of the box to increase the attractiveness of your contract!
In times when budgets are tight and savings are key, the prospect of renewing a contract in respect of recruitment can seem daunting. Salaries have increased and demand is higher than ever, but following the tips above can help you to move your MSP contract forwards without needing to reinvent the wheel in the process.
If you are considering a managed service provider, or your current contract is due for renewal, don't hesitate to get in touch with Amy Clark on 07918 601922 or email [email protected]
If you have any questions or would like to know more about our Managing Temporary and Permanent Recruitment framework and how YPO can help, please get in touch with the team!