We are in the middle of the perfect storm. In “usual” economic downturns, demand is inhibited, enabling buyers to successfully drive or maintain lower supplier prices and protect their cost base. However, today’s chronic shortages of specialist resources and the boundary-less open talent economy mean that traditional cost containment strategies are not delivering for buyers and the organisations they represent.
Jon Milton, Sales Director UK
Firms need a growing tail of suppliers, but recruitment agencies prioritise their customers of choice. Many organisations engage agencies at enhanced rates to keep up with demand. On top of that, a burgeoning external workforce is emerging, engaged expensively at the line level.
Unsurprisingly, CEOs are discussing ways to build organisational resilience and minimise their exposure to market volatility. According to McKinsey, in 2020 – 2021 resilient companies generated shareholder returns that were 50% higher than those of their peers. So, what can organisations do to build resilience from a talent perspective? Here are some lessons we’ve learnt from partnering with our clients.
Direct sourcing done well makes a difference
Staffing Industry Analysts’ research suggests that 84% of large organisations have direct sourcing programmes or intend to implement in the next two years. At the same time, fulfilment success rates through this channel are currently a mere 1%.
The reason behind this disparity is simple – direct sourcing takes a lot of hard work to get right. To achieve high levels of fulfilment through direct sourcing channels, organisations should focus on developing a model that covers the following:
Pontoon’s direct sourcing approach leverages our customers’ respected brands to directly attract and engage external workers. This allows us to fill roles with quality candidates faster and at a lower cost.
It pays to have an effective supplier strategy
Having an effective supplier strategy sounds obvious, but some organisations prefer to maintain an arms-length relationship with their partners. They continually pursue “more for less” strategies to capitalise on the suppliers’ dependency on their business. This is not a strategy that we would recommend. Some supplier partners may tolerate a degree of downward pressure on their margins, but not where it impairs profitability – primarily when sufficient demand exists to make money elsewhere.
Pontoon develops strong working relationships with key suppliers, and it has been critical in ensuring our customers maintain access to the talent they need. We view these suppliers as our critical, strategic partners and trusted advisors. We communicate with them regularly, support their business growth, and facilitate on-time payments and fair competition on a levelled playing field. Thanks to these strategies, our suppliers have prioritised our business rather than seeking higher margin returns.
Building internal capacity is the future
Being able to compete for available talent effectively is one thing, but it doesn’t solve the underlying problem – there’s not enough talent to go around. The most straightforward, long-term solution for mitigating the risk of talent shortages is to develop internal capacity by empowering emerging talent or realigning skills within the existing workforce.
As part of our advisory function, Pontoon Instinct, and specifically within the ESG & Impact practice, we help our customers drive systemic changes to talent availability by enabling youth employability through public, private, and academic partnerships. Also, we work with our customers to realise the potential of investing in upskilling and reskilling, such as increasing employee engagement.
These solutions address talent scarcity and offer meaningful social value and DE&I advancement opportunities. Programmes can be tailored to attract disadvantaged groups such as individuals who are unemployed or don’t receive an education or vocational training, college students, graduates, etc. Reskilling and upskilling initiatives offer the ability to increase representation within certain job families, for example, women in IT.
Is your organisation struggling to meet its demand for talent and control its cost? Are you keen to build resilience? Pontoon offers both delivery solutions and advisory services that may be able to help. Click the button below to get in touch and find out more.
