How to Manage Your Preferred Supplier List (PSL) of Recruitment Agencies Effectively

A Preferred Supplier List (PSL) of recruitment agencies is an essential tool for organisations that hire contingent or permanent staff. A well-managed PSL provides structure, consistency, and compliance when engaging with multiple agencies. However, if your PSL isn’t maintained effectively, it can lead to inefficiencies, compliance issues, and reputational risks. To get the most from your PSL, it must be actively managed and regularly reviewed.

Why a Compliant and Controlled PSL is Essential

The primary purpose of a PSL is risk mitigation. Using unvetted or non-compliant recruitment agencies can expose your business to serious risks — from breaches of employment law and data protection to financial penalties and damage to your brand.

A compliant PSL ensures that every recruitment agency you engage with meets defined legal, ethical, and operational standards. This includes compliance with UK employment law, the Agency Workers Regulations (AWR), right-to-work checks, GDPR, and transparency in fee structures. In short, a strong PSL protects your organisation, your workers, and your reputation.

Key Criteria for Vetting Recruitment Agencies

When building or reviewing your PSL, a thorough and consistent vetting process is non-negotiable. Don’t just focus on competitive rates — look deeper into each agency’s integrity, compliance, and performance.

Key areas to consider include:

• Compliance and Accreditation: Ensure agencies are compliant with all relevant legislation, including AWR, IR35, and Conduct Regulations. Membership in reputable bodies like the REC (Recruitment & Employment Confederation) or APSCo can also indicate strong compliance standards
  
  
• Financial Stability: Review each agency’s financial standing through Companies House or credit checks. A financially stable partner is less likely to cause operational disruption
  
  
• Transparency and Processes: Agencies should be open about their recruitment methods, candidate vetting procedures, fee structures, and contract terms. Transparency builds trust and minimises disputes
  
  
• Service Quality and Candidate Experience: Your agencies represent your brand to candidates. Ensure they deliver a professional, ethical, and candidate-focused experience. Review feedback and testimonials regularly
  
  
• Track Record and Specialisation: Agencies with a proven record in your sector will understand your talent needs better and deliver more consistent results

Optimising Your PSL for Ongoing Success

Your PSL isn’t a static document — it’s a living framework that should evolve with your business and the market. To keep it effective:

• Limit the Number of Agencies: Too many suppliers can create administrative chaos and dilute accountability. A focused PSL of select, high-performing agencies allows for stronger partnerships and consistent results
  
  
• Regular Performance Reviews: Conduct quarterly or biannual reviews of each supplier. Assess performance against KPIs such as fill rate, time-to-hire, candidate quality, and compliance metrics
  
  
• Maintain Open Communication: Foster strong, transparent relationships with your agencies. Regular review meetings and open dialogue help identify challenges early and align expectations
  
  
• Audit and Compliance Checks: Carry out periodic audits to ensure agencies remain compliant with employment law and your internal policies
  
  
• Data-Driven Decisions: Use reporting and analytics to track agency performance, cost efficiency, and candidate satisfaction. This enables you to make informed adjustments to your PSL when needed.

How Datum RPO Can Help

Managing a PSL of recruitment agencies takes time, expertise, and ongoing oversight. Datum RPO specialises in helping organisations build and manage compliant, high-performing supplier lists.
We handle the full lifecycle of PSL management — from agency vetting and performance monitoring to compliance audits and reporting. Our independent audits and analysis give you full visibility over your recruitment partners, helping you mitigate risk, improve efficiency, and maintain total confidence in your supply chain.

By partnering with Datum RPO, you can streamline your recruitment processes, ensure compliance, and focus on your core operations — knowing your agency relationships are expertly managed and fully optimised.