The changing face of client relationships in the recruitment industry
The recruitment industry is undergoing significant changes, driven in part by the direction that labour legislation has taken. This includes provisions in the amended Labour Relations and Employee Equity acts (LRA and EEA), which - among others – have made the protection of employee rights a disincentive for businesses to hire staff. There is an increased need for recruitment strategies to change and for cooperative staffing company relationships -which entail solutions based on innovation and flexibility.
With the current staffing model, the hiring costs are set to escalate, especially with new provisions in the LRA legislation for temporary employees to be "deemed" as full-time employees after three months. After a three-month contract period for temporary staff, the client is deemed to be responsible as well as the employer (TES) for contraventions of the LRA, but the client does not have to sign new employment contracts nor transfer temporary staff to its payroll as the TES remains the employer. In addition, the amendment provides for exceptions to uniformity in rates based on certain criteria upon which staffing companies should guide their clients. Again, these details need to form part of your recruitment strategy. Given the increased client risk exposure, clients should be very selective of their staffing suppliers and enjoy a close cooperative relationship.
What is required is a new business model
This includes the reassessment by companies of their relationships between themselves and the staffing company. Important benefits include cooperation risk and indemnity assumption. Reputable staffing companies that embrace this will thrive and those that persist in offering the service of the past will struggle.
In the new business model, a strategy has to be developed where long-term partnerships and value-added support services have to be established between the client and the recruitment company. The supplier needs to take cognisance of the prevailing labour legislation as well as analyse the B-BBEE benefits that can be achieved from suppliers with strong B-BBEE credentials.
Partnerships are more than recruitment company and their client, providing top-class candidates, sound advice on areas of flexibility and appropriate indemnity and risk responsibility. If we do not add value in our relationship with our clients, we will not be able to compete successfully in the marketplace. The key to this new business model is building long-lasting partnerships with our clients, where service delivery and competency is assured and trust is gained.
