A new code of conduct launched yesterday for RPOs and managed service providers (MSPs) “is a huge step forward” in addressing issues in the recruitment supply chain, an industry forum has heard.
The code was launched yesterday by the Association of Professional Staffing Companies (APSCo) at the second Recruitment Supply Chain Business Forum in London. Hosted by APSCo and ABFA [Asset Based Finance Association], the forum was attended by RPOs, MSPs, invoice finance providers, recruiters and end user clients.
Ann Swain, chief executive of APSCo, told the forum: “We see the code as a huge step forward, and something that will really make a difference to the recruitment supply chain for all concerned.”
The code is not legally binding, but represents statement of intent. A number of important RPOs/MSPs have already signed up to the code, including Adecco, Alexander Mann Solutions and Randstad Managed Services (see full list below).
One of the key issues that the code has been designed to address is ‘pay when paid’ clauses inserted in contracts between RPOs/MSPs and staffing companies.
These clauses mean that the RPO/MSP is under no contractual obligation to pay the agency until it has been paid by the end client. This is turn has had a knock-on effect on agencies’ ability to obtain invoice finance.
Under the new code, contracts agreed between MSPs/RPOs and the agency will include either a backstop date, at which payment to the agency must be made, or will give the agency direct recourse to the end clients for payment. However, both are subject to the agreement of the client.
Stephen Rookes, commercial & legal director, NES Global Talent, told Recruiter: “You cannot have the risk of paying out money and not getting paid ourselves; ultimately you have to be able to enforce the debt.”
The code includes nine rules, covering integrity and transparency, honesty and behaviour.
And it received a major boost at yesterday's forum when a senior manager at the Government Procurement Service announced that as part of a new framework for central Government, there would be no 'pay when paid' clauses.
Among its clauses are those that allow agencies to have direct communication with the end user client, when genuinely required. This is something that has been a bone of contention with agencies, who argue that not being able to communicate directly with the end client impairs the quality of service they can provide.
Darren Lancaster, managing director Hudson RPO EMEA regions, told Recruiter the code “verified what we already do”.
Matthew Rodger, chairman APSCo RPO & MSP sector group, and client services director at Alexander Mann Solutions, who was involved in the drawing up the code, told Recruiter that he expected others to follow. “I think some people will feel pressurised to sign up. I don’t think there is anything too onerous in it.”
However, he added: “The job is only half done. The marketplace is the marketplace, and customers have to want this and see value in it. The biggest challenge is educating end users, and that will take time.” However, he added: “End users will come to regard it as standard.”
Erica Briody, talent acquisition leader, GE Energy Europe, told the forum that ultimately keeping the supply chain happy by paying on time was in the best interests of clients. “End users need to understand that messing about with days of payment they are messing about with the ability of the supply chain to supply talent,” she said.
The companies that have signed up to the new code are: Adecco, Alexander Mann Solutions, Allegis, Advanced Resource Managers, Capita Managed Services, Elemense, Hudson, Hyphen, Interquest Solutions, Project People, PRO Unlimited, Randstad Managed Services, Resource Solutions, Resource Solutions Group, STR and Volt.