Lose Control of Your Recruiting Agency Vendor Management in 4 Simple Steps

When you send a job to search with a direct hire recruiting agency, you run the risk of poorly managing that candidate process – the good news is there are several ways to ensure you manage your vendors the right way.

The use of direct hire agencies is common, and is something that employers choose to do for high-risk and business-critical positions.

Typically used at the managerial level or above, direct hire recruiting is being used to supplement internal recruiter bandwidth for access to a wider candidate pool and niche recruiter experience.

The latest CareerXroads survey reported that out of 50 some participants, jobs were sent to search 3.5% of the time on average.

There is a lot of risk and headache that can come in managing these agencies when it’s not done right. Here are four simple steps to completely screwing up your third-party recruiting, along with four tips you can use to fix a broken system.

Don’t follow your due diligence standards.

Usually when an organization tries to outsource something – anything for that matter – there are standards set down by the organization on how to monitor that relationship.

If you’re not following these standards and asking the right questions, you’re putting your organization at risk through poor vendor management.

Some of these standards probably include risk assessments (how can this vendor get you in trouble?), contract negotiations (what does everyone owe one another), business continuity plans (how do we make sure the process continues of something goes wrong?), and fees (how much?) are just a few to name when it comes to working with direct hire recruiting agencies.

How to fix it: develop and run a risk assessment.

When it comes to risk assessment, make sure that you know the answer to the following two questions:

• Do your vendors have the right licenses to practice direct hire recruiting?
• Are your agencies compliant?

If your agencies aren’t compliant or properly licensed, this could negatively affect investor ratings, rating agency scores, shareholders and more.

Don’t evaluate your agencies correctly before you bring them on board.

Before you even get to building a good business relationship and following your organization’s relationship standards, you have to make sure you’re evaluating your vendor’s accordingly.

If you’re not, you may end up building relationships with the wrong vendors and ending up with a much bigger headache than you bargained for.

As a starting point, here are common evaluations used in the financial industry – also applicable to using direct hire recruiting agencies.

It’s hard to assess these criteria when working with recruiting vendors, mostly because you have no way of knowing if they’ve actually filled roles in your niche before. Most often, internal recruiters are making decisions based off their business pitch.

How to fix it: provide benchmarks for agency success, or use those of other organizations.

Think about how you evaluate a good hire – what made this process, person, and experience the best possible for your organization? Use these same criteria to evaluate your direct hire agencies.

This is where vendor management tools like BountyJobs come in. You’re able to analyze and see statistics from previous fills in order to determine whether or not an agency is the right fit for you.

Don’t think about the risks beforehand.

You could be the star of managing your third-party relationships – but every time you outsource something to a vendor, you are taking some risk in regards to staying compliant.

If you’re not thinking about these risks beforehand, you could possibility open your company to a serious breach in compliance:

“With more rules expected to be finalized in 2016, the OFCCP will exercise increasing oversight over contractors’ activities.” – Haynesboone

Some of the risks in outsourcing recruiting for direct hire include; the possibility that you won’t receive good candidates, the fee you’ll have to pay if you hire, a breach of private information, and mismanagement of the employer brand.

How to fix it: determine compliance and best practices before you sign a contract.

Talk with your agency about what exactly needs to stay secure, exactly what type of candidates you’re looking for, and the exact fees you’ll pay beforehand, to keep risk at a minimum.

Make your contract so air tight that regulatory and business updates aren’t a pain.

When you’re making a contract with a new vendor – weave into the makeup of the contract the fact that something is probably going to change.

Things change in business – like the amount of jobs you send to search, how much money you have budgeted to pay direct hire fees, and the salary projections for certain positions that you’re sending to search.

If you’re not planning for changes, you run the risk of being obligated to a contract that will no longer be beneficial to or relevant to your organization.

How to fix it: don’t set your contracts to automatically renew.

If you don’t set your contracts to automatically renew, it forces you to sit down at the end of a contract with your agency to review your processes and adjust your terms based on your needs.

When contracts automatically renew, you may be stuck in a stagnant cycle, and miss the opportunity for changes before you realize that you want to make them.

In the end, managing your vendor relationships is all about making sure all of your needs are on the table, and communicating these needs in the best way possible.

BountyJobs connects employers with the best agencies for their direct hire needs. If you’re interested in how we give employers insight into their internal recruiting teams, contact us.