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6 Benefits of Vendor Neutral Management of Your Agency Labour

2 February 2022

Recruiting temporary workers can be a complex, taxing and costly task and partnering with a neutral vendor managed service provider can make a significant difference in all aspects of the temporary labour recruitment process.

It is important to note that a neutral vendor is not a recruitment agency. They simply form partnerships with your existing recruitment agencies and when you have a labour requirement, the neutral vendor goes to market to these partner agencies to find the most suitable and cost-effective candidates to fill the requirement. There is no conflict of interest between the neutral vendor and the agency partner.

Relationships with the agency suppliers are often built up over the course of many years. Neutral Vendors allow hiring managers to continue to liaise directly with the agency suppliers to discuss requirements and applicant suitability. This minimises any change to existing processes and protects relationships. Supplying agencies also hate to be cut off from their clients and allowing communication channels to remain open minimises any risk of resistance to the new programme.

As there is minimal change, the time to implement is short and benefits are realised quickly. Cost savings can be delivered from day 1 as there is no need to wait until a critical mass is reached by filling vacancies directly.

The top 6 benefits of using a vendor neutral managed service provider are:

1. Visibility & Control

By overseeing the recruitment process from order to invoice, managed services from a neutral vendor provide complete visibility and control. The recruitment team can enter vacancies into the online recruitment software and send them to agencies, or the hiring manager can call the Recruitment Team who will work directly with agencies to fill the vacancy.

Through the online recruitment software, all hours are tracked, vacancies can be approved, and invoices are generated and sent electronically.

Management information is generated in real-time, as are details of spend breakdown by site, agency, worker category, and tenure for Agency Workers Regulations, demographic information, time to fill, and right to work in the UK.

2. Legal Compliance

The on-line recruitment software records information such as Rights to Work in the UK, Driving Licenses, Health and Safety Training and also tracks tenure in compliance with criteria for the Agency Workers Regulations. Every agency is also subjected to an independent audit to guarantee legal compliance. These audits are conducted face to face at branch level every six months at the very least, and they go over every candidate record placed with the client during that time period in great detail.

3. Supplier Management

Based on a client's existing agency providers, a panel of agencies is proposed and agreed upon, reducing the risk of change. The agencies will be assessed based on process, financial stability, geographical coverage, and legal compliance, and a panel of suppliers are then selected for each site, business unit, or division. Where there is a supplier shortage, new ones will be proposed based on previous experience.

4. Improved Performance

Agencies will be evaluated in accordance with an agreed-upon Service Level Agreement. Quarterly reviews and 360-degree feedback will be provided to agencies. Individual performance will be compared to the entire supply chain. Agencies that perform well will be rewarded with additional business by moving up the league table, while those that do not perform well will be relegated or removed entirely.

5. Direct & Indirect Cost Savings

Direct cost savings of 6% to 12% are then realised by standardising pay rates and margins and eliminating overcharging on Employers National Insurance and Holiday Pay, which agencies frequently miscalculate!

Indirect Savings – Indirect savings will be delivered by consolidating all invoices into a single weekly invoice. The invoice is then pre-approved and will be downloaded automatically via CSV into a client's back-office system.

6. Brand Management

In a candidate-short marketplace, managing brand is critical to ensuring the best candidate experience possible. If candidates have a negative experience with agencies, they will assume the same of your company. We ensure that this experience is consistent, so candidates will have a favorable impression of your company.

Get in touch! We can help.

Datum RPO can help you to manage your agency providers, ensuring that the workers they provide are legally compliant, as well as deliver significant cost savings.


Download our eGuide: Your Guide to Taking Control of Agency Labour Spend: 5 Reasons for Efficient Management.

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