Recruitment

The All of Government Recruitment Circus Gets Underway

By April 19, 2012 15 Comments

The online tender process for the provision of recruitment services to “All of Government” (AoG) across New Zealand’s three main centres was blasted out of the GETS cannon and into the creaking decks of the recruitment industry’s inboxes earlier this week.  Like a lion released into an overcrowded amphitheatre, it will engage with the recruitment gladiators who seek a part of the action, leaving most bloody and dismembered on the arena floor, and the successful few basking in the reduced-profit-but-still-sustainable glory of victory.

Overly dramatic?  Well not when you consider one well-known recruitment veteran claiming that if his firm failed to make the cut they might as well close the doors on their Wellington office.  Not when you consider that 70% of Perm placements into AoG are in Wellington alone.  Not when you consider that this procurement-driven “solution” seeks to reduce external recruitment spend (placement fees, service fees and temp/contractor rates) by $69million.  As an aside scroll to the bottom of that NBR article for some classically ignorant comments about the value provided by us in the external recruitment world – my favourite comments definitely being the ones around how external recruiters can ALL be replaced by WINZ who can fill Government jobs with our 60,000 unemployed thus saving ALL external recruitment spend!

So while Wellington recruiters receive this RFP with sweaty, shaky hands and dead-eyed grimaces of desperate hope, what does it mean for the wider New Zealand recruitment market?  Will Cantabrian recruiters cast an eye up north and shrug languidly to return to more pressing South Island matters?  Will Auckland recruiters glaze over at the very mention of “Government” and turn their beady eyes back to the awakening private sector?  Well both centres certainly need to pay attention.  The AoG recruitment services contract can be adopted by any or all of the Government Agencies, local authorities and public sector entities across Auckland, Wellington and Christchurch and the only recruitment services excluded will be Executive Search or recruitment for specialist roles such as academics, military personnel, doctors and nurses (can internal recruiters be included too…please?!)

How are MED going to go about building this new framework for AoG to engage with external recruitment suppliers?  Mark Ansell stood before a panoply of 80 recruiters in Wellington on 3rd April, jaw-jutting and spiffy waistcoat-sporting, to deliver the classic line:

“Recruitment companies that engaged in our Supplier Stocktake have told us that having a “panel” of recruitment suppliers does not deliver efficiency and does not deliver value and we’ve listened to that…we really have.  Nevertheless our solution is… a Panel.  OK?”

There is no commitment yet around how many of us in recruitment can be on this panel.  There will be “visibility throughout the RFP process” which doesn’t go very far to allaying any fears from Mark’s earlier comments about the Government Agencies consulted with telling him that they “want access to no more than 5 or 6 recruitment agencies”.  The end result will almost certainly reveal a panel with a greater number than that but with 87 recruitment firms involved in his “Supplier Stocktake” (the process they went through to gather information, intelligence and data in order to plot the best way forward) “there will be winners and there will be losers”.

The entire briefing can be viewed on You Tube across 3 parts as follows:  Part 1Part 2Part 3.  But, for those of you struggling to find a spare hour (or a quiet spot), here are The Whiteboard’s impressions of what you should be worried about, but also what you should be encouraged by:

Worrying

  • AoG have chosen the panel solution and building of this framework by consultation with the recruitment community through a series of “coffee sessions” and “supplier stocktakes” where the participants apparently failed to submit the requested information in the correct formats.  I wasn’t asked for my input or opinions.  Were you?
  • AoG are seeking to cut spend on recruitment by $69m which is far more than the entire amount of cost cutting from legal advice, fleet vehicle procurement, office equipment and air travel combined.  Another clear indication of the lack of understanding about what we actually do in recruitment and, more importantly, the value of the service (and talent) we are able to deliver.
  • About 150 recruitment firms will be spending the next month sweating over these RFP submissions, drastically affecting productivity in our sector, for a tiny fraction to be awarded the eventual contract.  Or in procurement-speak it’s “a process of supplier rationalisation enabling the fostering of closer relationships with fewer suppliers”.
  • A heavy bias will be placed on what value you have delivered to Government already, validated by 3 references from Government clients and 3 references from placed candidates, as opposed to marketing literature and what you say you are going to do in the future.  A muttered aside suggests that if you haven’t recruited into Government then you can provide referees from the private sector but my impression was – don’t bother.

Encouraging

  • The strength of RFP submissions will be measured on customer satisfaction levels rather than on price alone.  The very fact references will be taken around client and candidate satisfaction should give comfort to those recruitment firms who truly take pride in the quality of the service they deliver.
  • This is more of a change management process than a procurement process.  Recruiters who can demonstrate their agility and adaptability will be regarded more favourably than those resistant to change which is a plus for the more innovative of you out there.
  • A panel today doesn’t mean it will be a panel in 2 years’ time.  It’s the right thing to do today because of gaps in the data and gaps in the intelligence that will be plugged by this solution”.  So basically, we in recruitment advised against a panel, but because of our inability to provide accurate data in the correct format a panel is what we’ve got.  But probably only for the first couple of years, after which MED will feel in a better-informed position to create a more effective solution, which I would hope will be more of a win-win.
  • AoG recognise the value of reporting analytics to assist their successful panel suppliers in developing more targeted marketing efforts and reducing the cost of sale.  This will help the profitability of this exercise, although only for the successful firms of course.
  • Recruitment suppliers can tender to provide services into a matrix of nine “lots” and can go for just one, all nine, or anything in between.  The nine lots consist of Auckland, Wellington and Christchurch, then broken down into Perm, Contractors and Temps and then further narrowed into Corporate Services, IT and Admin roles.  This is good for the more specialised boutiques who can compete on this tender alongside the big boys, as long as AoG recognise the value smaller specialist firms can deliver.

The debating, consulting and information gathering is over.  This is happening.  Tenders must be submitted by 14th May and the contract will be awarded to the happy few around June / July time.  But as AoG begin the laborious task of sifting through the tornado of paperwork heading their way, I would ask them to consider the following:

  • Relying on just 5 or 6 recruitment panel suppliers will be woefully inadequate for your requirements.  Please don’t believe that just because a large, generalist recruitment firm can cover all nine “lots” that you will get the same access to talent.  Some can, but often the boutique specialists will unearth talent through their focused, narrowed networks, that the bigger firms can’t manage despite their technology and marketing resources.  Of course generalists will feature, but do consider those offering more of an “inch wide, mile deep” approach.
  • The quality of a recruitment firm’s delivery is hugely dependent upon the quality of the recruitment talent within that firm.  And we in recruitment are an itchy-footed breed.  The firm you appoint in June might not be the same firm one year later and just because they have the same logo and same offices they might be nothing like the firm you originally dealt with.  The references you receive in submissions might talk about the overall recruitment company as a whole entity, but usually what the referee will be referring to will be the behaviour of one particular recruiter within that firm.
  • You say you won’t be focussing on price alone.  This is a good thing but we always get worried when these solutions are being driven by procurement.  Do you really mean it?  Do you honestly believe it?  You must remain true to this sentiment because recruitment, more than many other sectors, is a service where you really get what you pay for.  Those offering the cheapest rates will often not have the best recruiters, who won’t respond to your needs with the required urgency and motivation, and won’t have the credibility amongst a fickle, talent-short candidate market to compel the best talent to consider careers within Government as opposed to an improving private sector.
  • Panels Don’t Work.

This is a watershed moment in the history of recruitment in New Zealand.  I will watch with interest and applaud those of you who emerge victorious, but likewise commiserate with those whose doors must surely shut.  Good luck everyone!

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By the way, The Whiteboard is 2 years old this week, so if you’ve made it this far into a long blog post then you really are a fan.  I am eternally grateful for all of your comments, both online and also when I meet you readers in the real world.  Thanks for your support and readership over the past 2 years, it’s been a blast.

Jonathan Rice

Jonathan Rice

MD at New Zealand rec-to-rec firm Rice Consulting and co-founder of on-demand recruiter offering Joyn. Recruitment agitator and frustrated idealist, father of two, husband of one, and lover of all things Arsenal and crafty beer.

15 Comments

  • Avatar Paul Heath says:

    As always – well said. Do MED follow you?

  • Avatar David Smith says:

    Really good article Jon. I might be heading off into internal recruitment but I wish all people tendering the best!

  • Avatar Damian Newland says:

    Great post.  I am concerned for the industry, as surely if the number of placements are the same, then saving $69M can only coming about by cutting $69M off fees! The advantage to the winners of course is a bigger slice of a smaller pie (that should prove to increase profit per placement), but the bottom line is that if you don’t cut your fees you won’t win. 

    On the flipside we do all have a part to play in improving the efficiency (productivity) of business in NZ, so recruiters, like everyone else, will need to look to ways to do more with less!  Look for a drive on smart technology and BPM in 2012!

  • Interesting article & written with flair & passion I believe. Recruitment as an Industry have always had to prove again & again the value we provide. While Govt strips back it’s recruitment spend, In all probability (and with all respect to the winning agencies) I suspect they’ll also be receiving a stipped back service and talent pool…

    All power to the private sector who will benfit..

  • Avatar Pix says:

    Congrats Jon on The Whiteboard achieving 2 years, always a good read on a Friday afternoon.

  • Avatar Kerry Kirwan says:

    Very perceptive take on things Jonathan.  And very scary comments from some of the NBR readers.

    I love this paragraph in the NBR article.

    “That has seen the local arms of agencies report success successive losses since the global financial crisis in 2008 on dwindling revenues”.

    What are “success successive losses”?  Isn’t a loss a loss?  When did it become a “success loss”.  Or is it just bad sub-editing from NBR?

     

  • Avatar Renny Hayes says:

    Happy 2nd birthday, Whiteboard!  Always a provoking and entertaining read…

  • Avatar Mike Duncan says:

    Jon,
    Good article mate and I feel you are correct from my limited knowledge of recruitment in to NZ government depts.  The bottom line is that it will come down to cost as every time ‘they’ say it doesn’t it just means more and more that it is all about the cost.  Seems they want to deal with the people they are already dealing with but at cheaper rates.  The squeeze is on to the evil force that are recruitment agencies!

    • Anonymous says:

      True Mike – looking at the RFP document the first cab off the rank in terms of “Objectives of the RFP” is as follows:”improve the value for money delivered through a reduction in the unit cost of external recruitment services and a rationalisation of the supplier base for common areas of need”

  • Anonymous says:

    Thanks for all of your comments so far everyone.  Will be good to get one from MED – anyone forwarded this to them yet??

  • Avatar Hassanah says:

    Well written Jonathan – interestingly on there answer sheet they currently have no way of managing “leakage” – the answer given – “We are looking at mechanisms to help get visibility on leakage. Ultimately under AoG, there is an inherent commitment and expectation on
    Participating Agencies to support AoG contract and to manage leakage” So if you don;t geton it probably isn’t all over rover!

  • Avatar Mark Fisher says:

    So eloquently put Jonathan. In my six years in the UK recruitment market I saw the same ‘matrix’ or ‘procurement’ exercise go so horribly wrong. It was the death of many specialist recruiters and the uprising of poor recruiting practice in general. Good people are hard to find and paying agencies even less to do so simply doesn’t work. In my experience and the only thing that kept our small agency of 18 staff still profitable, was to say no and agree terms outside of the contract that were manageable for us. Don’t get me wrong, not everyone agreed with my proposal but the ones that did kept us alive, unlike some of our competition who swallowed it whole and ended up bloody and dismembered on the arena floor.

  • Avatar Lachlan McNeill says:

    Top stuff Jonathan. Enlightening and insightful.

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