It has become common practice in recent years for procurement people in the public sector to band together as buying consortiums for recruitment advertising services. The thinking is that if you make the account bigger, you can nail the agencies for bigger discounts.
But there are a couple of serious problems with this strategy.
Firstly, when it’s a procurement driven process, the really big agencies will inevitably buy the business, offering huge discounts on media and minimal production rates. But, the agency still has to make money somehow. So they’ll either hard sell additional, higher margin services or cut the service down to the bone and charge for every loophole they can. This isn’t a criticism by the way, it’s the only way to make any money out of these massive contracts.
The second problem is the lack of competition. If you put a £7 million consortium out to tender, there are only four, maybe five agencies in the whole country that can service it. So, while there may be a fantastic, local agency that’s a better fit, they can never go for that business because there are other organisations on the contract that essentially make it too big to handle.
Recruitment advertising has now become a commodity in the public sector. It’s about who can deliver the cheapest service. These purchasing consortiums will get a cheaper price per unit, but overall probably end up spending more money because the agency is so hog-tied by their contract that they simply can’t afford to put real expertise on the account. So the result is a bargain basement service that doesn’t add any value or attract top talent into the public sector.
Shift the focus to value and be prepared to divide the accounts up among a roster of agencies and you get a far more diverse and, dare I say it, vibrant selection. It also means that the agencies concentrate on proving how they can solve your recruitment problems while offering excellent value for money, rather than shaving another half a percent off their media margin.
That’s it, rant over.
