The Human Cost of Direct Sourcing


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Strategic decisions are often made which have direct and indirect consequences for the people have associated with those businesses. In the Retail industry, save wholesale store closures, there is nothing more disruptive on a human level than when a Retailer announces that it is going to be sourcing it products direct.

Retailer prices are being squeezed like never before. The internet has introduced a low-cost operating model which undercuts store prices and Retailer’s margins are consequently lower than ever. As a result, many are putting huge pressure on their supply base, to the point where they decide that it is more economically viable to source products in-house.

This trend has been prevalent over the past ten years – first in food, then DIY, and lately fashion has increasingly jumped on the bandwagon. In the summer of 2014, Marks and Spencer’s (the stalwart of the British high street) announced a project to source 60% of its clothing direct.

When a Retailer sources direct from factories, redundancies were inevitable. This has sparked profit warnings far beyond our shores. From Israel to Bangladesh, the shockwaves are being felt.

But what does it mean for companies in the UK who have supplied M&S for decades?

They are now forced to seek new business with the rest of the high street, looking to differentiate their business, but many will fall by the wayside.  Whole teams have disappeared, and businesses are restructuring to make themselves attractive to new customers.

In terms of people, traditionally when M&S have been supplier changes in the past, employees have been able to step into their next role working for a competitor or fellow M&S supplier and possibly broaden their product knowledge. Now this is no longer possible, and there are hundreds of people in the market wondering how to make the move from the supply side into Retail. It seems that is the “safe” move to make.

There is no doubt that M&S needs to boost its design team and a few top management roles have been filled from their suppliers. This sourcing experience is crucial, so for the lucky few this has been a fortunate development. Social compliance, sourcing and costings are some of the key areas where skills are especially transferrable.

The shifts in the marketplace will not slow down. The UK “middle man” supplier is gradually disappearing and although there will always be a place in the market for them, the size of the pie is getting ever smaller.

There is however a light at the end of the tunnel. Offshore manufacturers are setting up satellite offices in the UK, with a view to supplying M&S directly. In addition, those with supply chain and commercial experience are increasingly seeing the internet operators as a destination. In this way, they will be eating into the profit margins of the retailers that once deserted them for this very reason.

Strange how the world works sometimes….

 

Are Internal Recruiters The Answer?


 

Internal recruiters

The “in-house” or internal recruiter has become a vital asset for many companies. In the world of social recruitment and with ever more candidates on the radar, it has made increasing sense to bring the function in-house. This, of course, depends on the volume of annual recruitment and the type of hire to be made, but in most cases, having an internal recruiter who intimately understands the culture is crucial. They are accountable for long-term performance of hires and focused on quality rather than making commission at all costs.

However, there are circumstances where they are far from the optimal solution, and rather than acknowledge this, companies tend to put unrealistic pressure on them to deliver the impossible. When they are recruiting for specialist roles in a candidate poor market rife with skills shortages that is when a specialist recruiter should be involved.

For me, there are three key areas where internal recruiters can experience problems:

Lack of reach. Internal recruiters have a huge amount of different roles on the go at any one time. It is difficult to reach the best passive talent in niche areas as their networks may not extend that far. They should be asking searching questions of those candidates who are “available” in candidate-short areas. The best candidates should not be on the market for long. Just because they are available doesn’t mean they are the ideal fit.

Lack of knowledge. As a specialist recruiter, we know our market, we also get the candidates that apply to job adverts or candidates who are unhappy and want to move on. We also have the knowledge and expertise to search out candidates who aren’t actively looking and can present an opportunity to get their interest in. We can make approaches to the client’s competitors which for them would be unprofessional to do directly. We can carry out competency based interviews and challenge candidates for them the qualify and quantify their knowledge and as the skills in the labour markets shrinks and there are less and less highly skilled candidates out there

Lack of pulling power. The best specialist candidates are hard to tempt away from their current role. An internal recruiter only has one opportunity to do this, one chance to turn their heads. A specialist recruiter, however, has multiple requirements at any one time and can build a longer-term relationship with the best passive talent. Candidates know that the specialist recruiters are likely to be the source of their next roles, so they are open to being influenced in a way that no internal recruiter can.

Specialist recruiters exist to answer these very specific issues. We have evolved to fill in the gaps within the recruiting process. We act as trusted advisors for both candidates and clients, and we take pride in providing an effective solution to what can be a serious headache for an overworked internal recruiter.

 

Why Do Recruiters Exist? Really?


“The company is hiring for a job, I want a job. Nothing complicated there, right? Simple supply and demand calculation. They have a look at my CV; I have a look at their website. They say “hmm, interesting” and I say “hmm, interesting.” A couple of meetings later I am shaking them by the hand as they offer me a job. What extra value can a recruiter possibly add?”

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