The Benefits of PSLs and SLAs

How many companies are on your company’s PSL list? PSL lists can be seen as an optimistic way of looking at companies that you aspire to work with, but in reality they can be more than that. What if they are more realistic? Working with PSL list companies can boost your business and also show progress in your own business if you aim for PSL companies that are not too far from your own reach as a company.

The Benefits of PSL and SLA

What are the benefits of PSLs and SLAs?

Working with over 150 clients in any quarter – and having a great many new ones coming on board all of the time – we find ourselves needing to talk to them about the benefits of formalising their recruitment relationships; setting performance guidelines, establishing rules of engagement, and stipulating that their recruitment suppliers tow the line.

Why do we need to constantly give this advice?

Quite simply many clients don’t perceive they have the time to create a Preferred Suppliers List (PSL). Instead they suffer at the hands of recruiters that will act less than appropriately and deliver inconsistently, whilst maintaining little (or no) level of communication throughout the process. First, let’s dispel a myth. A PSL is not a list of agencies that you use.

A PSL should not just be a list of suppliers, but a list of suppliers with uniform supply arrangements, payment terms and service levels. The PSL should work to an established Service Level Agreement (SLA), signed up to by all suppliers and by the Client that the PSL serves.

So why have a PSL?

Operating without a PSL can lead to the following problems:

  • Heavy reliance on freelance contractors, but little consistency in supply.
  • HR function is neither expert, nor focused in terms of recruitment efficiency/effectiveness.
  • Current recruitment suppliers are not ‘engaged’ with the business.
  • Multiple disparate recruitment suppliers without formal report-ability.
  • No ability to review the performance of recruitment suppliers.
  • Resourcing managed on a knee-jerk basis.
  • Line managers feel pressured when it comes to recruiting, and dealing with recruiters

And what benefits will a PSL give you once it is in place?

  • It will improve a company’s time to hire.
  • Increase the quality of the candidates being delivered to you.
  • Improve relationships with recruitment agencies, and make them advocates of your business.
  • It will, via the SLA, performance manage and review recruitment suppliers.
  • Provide verifiable metrics.
  • Reduce overall cost.
  • Improve governmental compliance when tied into a strict SLA.
  • Reduce company time spent on recruitment.
  • Help develop a sentiment analysis of the industry’s view of your brand through feedback delivered by your PSL.

Fundamentally you reduce costs through driving up efficiency!!!!!

How does a Service Level Agreement work and what are its benefits?

A properly drafted SLA will deliver communication guidelines for both the recruiter and line managers to stick to. These will be time sensitive, which will drive efficiency and speed up the time to hire. The SLA will derive metrics against the performances of each supplier. This means you know who is doing  well at recruiting on your behalf! An SLA is not simplistic, but rather a comprehensive set of ‘best practice’ procedures which all parties agree to uphold.

So, what will the SLA measure?

  • Jobs that the recruiters send CV’s to. Do they attract candidates for you?
  • CV to interview ratio. How well do the recruitment suppliers know you?
  • Interview to offer ratio. How accurate are your recruiters?
  • Offer to acceptance ratio. How well propositioned is the opportunity by your recruiters?
  • Job posting to start date timeframe. How quick is the process?
  • Attrition rates – are they stable/reduced? Are recruiters getting the cultural fit right?

In summary

To sum up, a Preferred Suppliers List, supported by a detailed Service Level Agreement, offers many benefits. It will ultimately make your resourcing easier to manage. Your department managers will know what they have to do, who they have to talk to, when to expect results and what communication they should receive. There will be no need to negotiate with any recruitment supplier! At the end of each quarter, or six month period, a review of the suppliers should take place, looking at the roles they have worked on, whilst monitoring their efficiency and volume.

So, although it takes a little time to set up, it is most definitely worth it in the long run!!! Like any business process that is working well, you will soon forget those sleepless nights spent thinking about your recruitment planning and management pains!!!

For more information on the benefits of setting up a PSL and SLA, talk to Jonathan Lindon about our consultancy services in this area: