Why PSL’s are a BAD senior recruitment strategy

I get it, companies want to control their recruitment costs, control commercial terms, control the hiring process and work only with companies they rate and trust, and the PSL is the accepted mechanism and methodology to achieve this.   At the board level, in the procurement department, in finance and in HR this makes complete sense, only in practice is it failing and in the case of senior hires failing badly.

As a concept it makes sense, I studied economics at university so these types of theories appeal to me. However, I seem to recall pure theories tend not to bear out quite as intended in the real world and the PSL paradigm fairs no better.

The PSL is I suspect is an effective cost control instrument but unfortunately is not a very good senior recruitment strategy.

Companies using a PSL are solving the very real problem of too many suppliers with vastly differing commercial terms and I am sure that they are bringing down and controlling their costs, but are they getting value out of their supplier relationships, are they filling the strategic roles, are they getting the best talent?

Thinking again like an economist, the incentives and disincentives at the core of the PSL need to be considered. When you say to your PSL members that you are releasing a role to just 2 or 3 trusted companies your are initiating a race, you are saying that you value speed way above quality, you are firing a starting pistol on race to the bottom.

Many PSL’s have service levels attached that further promote aspects such as quantity, metrics and compliance above candidate quality and culture fit. To be honest I am not sure how a modern PSL recruiter would have the time or knowledge to assess culture fit. They generally get their recruitment instructions via an internet portal and they set off running, with a key word search of their database desperate to be the first past the post.

If they do have the opportunity or inclination to speak with a real person from the client company it will most likely be an in-house recruiter, probably in their early 20’s, most likely with less than a year or two in the client company as turnover in these roles is very high. The in-house recruiter will have anywhere up to 100 jobs on their desk at anyone time so they can only offer a half remembered second or third hand 5 minute briefing from the actual hiring manager.

If the in-house recruiter has failed to ask the right questions or failed to understand the real driving requirements of the role then you can hardly blame the external recruiter for submitting candidates that miss the mark. Well at least the CV’s arrive quickly, and in a format that the in-house recruiter can easily input into a management report. It’s recruitment by numbers, blindfolded.

If as a business you have been “successful” in bringing your suppliers fee rate down below say 15%, as many have done what is effect on your recruitment strategy? Can you measure quality, can you measure value and success from a hiring perspective as easily as cost? In the end you get what you pay for.

As a headhunter I avoid the PSL at all costs, it’s a waste of time and its prevents me from doing my job properly. Whenever I speak with a new company at some point the PSL is mentioned. It’s used by the gatekeeper initially as a big lock on the front door to repel all comers, then once you prove you can find the candidates that the existing PSL suppliers cannot it is used as a carrot, a reward for compliance in the negotiation process.

I have been through the sharade, every headhunter has. Our PSL has failed to deliver on this role so we can squeeze you on if you agree to one sided terms.  But this doesn’t wash, we know that the good candidates are hard to find, there is a war on talent and we are the ones who have the skills and the training to get the difficult roles filled.  A good recruiter knows it is essential to speak with the hiring manager and decision maker, armed with the right questions, experience and with a focus on going the extra mile to get the role filled.

The real truth a PSL that has multiple recruitment firms can damage your recruitment process and repel your most desirable candidates.

  • Candidates receive numerous calls from recruiters all presenting your opportunity making your firm look desperate to fill a role.  The constant bombardment of calls, SMS, emails, LinkedIn messages etc all about the same role from different agencies turns them off and makes you look inefficient putting your vacant position in an unattractive light
  • if you impose low fee rates on your PSL members, those same recruiters will spend less time on your vacancies and more time on clients who are willing to pay a higher fee.
  • If you have a very large PSL say 10+ recruitment companies if the recruiter believes they have say a 1 in 10 chance of filling a particular role then will they work as hard on your vacancy or concentrate their efforts on roles with clients that they have a better chance of filling?
  • The chances are you’re likely to be presented with the same candidate multiple times.  You then waste valuable time handling ‘introduction’ disputes from various recruiters
  • This type of multiple recruiter activity can damage your employer brand
  • The “Report on Jobs” edition (April 2015) published by KPMG and the REC showed an increase shortage in good candidates relating to higher starting salaries.  Highlighting the importance now more than ever of having the most attractive recruitment process in place.

Whilst PSLs have their place, for some positions working more closely with recruitment companies and working in partnership with them for specialist/harder to fill roles can be so much more beneficial for both you as the employer and the candidate experience too.

Instead of scattering your recruitment needs across multiple catch all agencies, consider developing a deeper win-win relationship with just one recruiter, just as you already do with your accountancy support, your lawyer and your bank. You will get a lot more value in return.

At Mindset Search we have the right mindset to create an effective long term recruitment partnership with your business. 

We manage your search assignment through our unique online assessment portal, My-Mindset. Our award-winning combination of advanced technology and cutting-edge methodology produces, in-depth candidate assessment that reveals candidate mindsets, reducing guess work, streamlining the recruitment process, and improving new employee retention.

Our clients use our behavioural profiler tool to create a benchmark person profile for each role. Candidates create and upload their own content, including an elevator pitch video, so they can highlight specific elements of their skills and experience that they feel are most important whilst behavioural assessments, video interviewing and competency questionnaires provide in-depth candidate analysis.

We conduct thorough due diligence on your chosen candidate gaining references from previous line managers, clients and from their previous direct employees. 96% of new employees recruited using my-mindset are still in place after a minimum of 12 months

We are so confident in our methodology that we offer a full 12 month replacement guarantee on the successful hire. Get in touch find out how we can improve the quality, culture fit and retention of your senior hires.


Tony Talbot


email: tony.talbot@mindsetsearch.com

call freephone:  0800 689 4275

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