It is no secret that corporate relationships work most effectively when all parties benefit. However, all too often, businesses focus too much on achieving the best results for themselves – and often at the expense of others in the supply chain. In the recruitment sector this is no different. So how can this problem be solved to ensure that all parties benefit?
After all, the most successful businesses, and indeed academics will argue that trust is more important now than ever. A recent McKinsey report showed that unless companies are completely transparent this will only lead to a failure to develop lasting relationships with each other.
It is well known that there has traditionally been some uncertainty as to the contractual relationship between recruitment process outsourcing companies and recruitment firms in the supply chain. Clauses such as ‘pay when paid’ and ‘non assignment of debt’ have made it extremely difficult for recruitment businesses to get credit from third parties. Without this funding, much of the staffing sector would not be able to trade, workers would not be available to end users on attractive terms and costs would increase. It is vital that all players, (whether it be an RPO, recruitment organisation or managed service provider (MSP), seek a result which is not only fair for themselves but also effective and sustainable for everyone involved.
This is why we have launched the APSCode, a commitment to fair play and transparency which ensures everyone in the supply chain protects their brand and reaches a common goal.
What does this mean for HR professionals?
The APSCode strives for fair contractual terms. Any contract drawn up between a recruitment firm and an RPO/MSP signed up to the code, should include a backstop date at which payment to the recruitment business must be met by the RPO. Alternatively, permission for direct recourse to the client should be granted in the event of non-payment.
Other clauses in the code cover integrity and transparency; behaviour around the sustainability of supply; respect for work relationships, dealings with clients, candidates and recruitment firms; compliance and financial responsibility.
We are pleased to say that The Government Procurement Service has supported the creation of the APSCode, stating that it “aligns with much of what the Government is trying to achieve with regards to transparency and fairness for all parties in the supply chain.”
The Chartered Institute of Purchasing and Supply (CIPS) has also pledged its support for the code of conduct. Gerard Chick, Former Head of Knowledge at CIPS, commented “The future of procurement is bright but is going through a fundamental change. To attract and retain the best talent you need to engage a diverse group of suppliers. SME inclusion is high on the government agenda and supply chain justice with procurement acting as value brokers not just cost cutters is business critical.”
The more stakeholders there are in a supply chain, the more important it is to be transparent in order to maintain the trust of your business partners. The APSCode assures HR professionals that their recruitment supply chain works not only to produce the fairest deals, but the most effective and sustainable solution for all involved. That is why, we present you with our call to action: – “Check your supplier contracts and ask your RPO or MSP partner if they use a “pay when paid” clause with their suppliers and if they do, do they have a backstop date for payment or indeed direct recourse to you the client and if not, why not?”
