“Procurement professionals are not the ogres they’re painted as”

Peter Crush

Recruiters are increasingly finding that procurement professionals in client meetings. How can they make the most of the inevitable friction? Peter Crush finds out

If you’ve heard it once, you’ll have heard it a thousand times before: recruitment agencies and procurement departments are like oil and water; they just don’t naturally mix. While procurement departments see themselves as custodians of costs, they’re regarded by agencies as a shorthand for cost-cutting; reducing the complex nature of recruiting people to numbers, where what looks like the cheapest now won’t always translate to long term cost savings.

The problem is, of course, is that in recent years the two are increasingly being thrown together. Whether they’ve been asked, or politely forced to by their FDs, HR departments have surrendered agency selection to procurement. According to APSCo, 60-70% of private sector firms now involve procurement in agency selection and all of this means agencies have a tough path to navigate.

“The dynamics of negotiations are nearly always imbalanced,” says Frances Lewis, head of the recruitment sector group at law firm Osborne Clarke, which increasingly advises agencies on setting up contracts. “Many shy away from feeling like they can improve their positions because it’s invariably a conversation about cost. The problem is,” she adds, “agencies rarely get a contract which ticks all the boxes for them, and this means they run the risk of exposing themselves to danger – either by promising a service they can’t afford, or worse, building in liabilities they can’t cover.”

In 16 years Lewis says she’s never seen a contract that adequately agrees to pay agencies according to the scale of work that goes into hiring different levels of people. “At one extreme agencies have to know when to walk away, especially if it’s not viable for them,” she says. Better to do this, she argues than take on a client that could cause them reputational damage.

The agency-procurement relationship is always going to be difficult for people to have an unbiased view on. At APSCo, the body representing the interests of agencies, stakeholder engagement manager, Nick Bowles says his body has made huge strides working with CIPS – the procurement industry’s equivalent body to bring the two parties together, but concedes there are still issues. “Inevitably there are frictions,” he says. “In particular, agencies feel the documentation they deal with is too general, and they’re not given access to the company to understand what the culture of that business is, and what they can bring.”

Friction is heightened, because at the same time as agencies want to talk with procurement more, these same departments are busier than ever; some 86% of respondents to a recent CIPS survey said procurement is now handling more than they were five years ago.

Nick Stephens, executive chairman of search and interim agency RSA says he understands these concerns. “I think it’s a strained relationship. Things [procurement] ask you to measure are difficult, and so all that leaves you to argue about is price. I remember we were one of five agencies going through procurement for a large pharmaceutical company. We were forced to go through an 18 month process that we felt didn’t particularly think would lead to the growth of the company. And, we were excluded from dealing with line managers. That same company was operating at a 30% net profit, but were asking us to find their talent for nothing like that.”

The best advice, says Stephens, is for agencies to demonstrate they do things “so well” that excellence is normalised rather than made a point of as a specific USP. He says it’s about inverting the normal rules about what makes a USP – a unique selling point, but making sure you still come out on top. “When dealing with procurement USP is more like your ‘Unique Standardisation Point’,” he quips.

But according to Fiona Brunton, whose business is helping agencies submit better documents to procurement (with a success rate of 75%), although she accepts agencies face barriers [“recruitment consultants are wired to do business quickly, by phone, with a high level of energy,” she says “and ‘selling’ themselves to procurement, which is devoid of emotion, is something they find a lot harder,”] at the same time, she argues agencies sometimes don’t do themselves any favours.

“Agencies still assume procurers know things when they don’t; agencies often miss earlier deadlines to ask clarification questions by; they do it too last minute, which means they don’t have time to get the testimonials and case studies the procurement department needs, and agencies often write what they want to say about themselves, not the answer to a specific question procurement wants an answer to.”

Brunton says agencies need to address all these things, adding procurement does want to do things fairly and that some agencies’ adversarial suspicions are misplaced. “Procurement is actually very interested in value and risk, so it won’t just go with the cheapest supplier if it thinks the people an agency will recruit won’t stay and risk business continuity,” she says. Failure of agencies to see this though, she argues, means they still approach the process with cynicism – including thinking that decisions have already been made (when they haven’t.) She says: “Often procurement have to follow legal requirements. The problem is, they can’t score agencies on information they’ve provided but which hasn’t been asked for.”

Commentators say other, immediate quick wins are for agencies to sort out their CSR, ethical or diversity credentials. They may not be seen as important, but they are part of most potential clients’ values, which they are required to extend to their suppliers too. They should also not be afraid of asking procurement for more detail about what its needs are.

CIPS’ CEO David Noble says agencies should understand procurement looks at many things. “Procurement professionals work to robust policies and procedures, so there may be some mismatch in approach as there can be sales people. Things we look at though include: do cultures mix; do agencies have the expertise to make the right recruitment choices; do they have the connections that are valuable to the buying organisation; are they regional/national/international, are they up to date on legislation?” These are all areas he argues agencies could work on.

He adds: “Streamlining administration procedures would help agencies get in front of procurement people more frequently. Efficiency and effectiveness are important as well as clear management information.”

Noble accepts more face-to-face contact could improve the process, admitting “getting together and being clear about paperwork and measures ensures a good relationship can be established from the outset.” But he says its up to agencies to improve their reputations too: “Recruitment agencies are often seen as very much like estate agents; their reputation isn’t sky high.” He adds: “Agencies can be too eager to get the work and then make the relationship work after everyone’s signed the contract.”

Abating any suspicions around “clarity and specialisms” will be the biggest gains agencies can make when dealing with agencies, Noble says. And as APSCo’s Bowles adds: “Procurement professionals are not the ogres they’re painted out as. Get to the kernel of what exactly they’re after, and what they need to see to make them get selected, and that’s more than half the battle done.”