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The importance of... sustainable rates - Part 2

Posted on 21/03/2017 by Jon Milton in Category Managed Services
A couple of weeks ago on part 1 of this blog​ I spoke about how demand for workers is acceler​ating rapidly and why keeping rates sustainable is important to all parties involved. I spoke about two key challenges worth considering when looking to maintain competitive margins in a scenario where demand outstrips supply, all this without affecting the quality of workers:

  • The challenge of working with a single agency supplier, and 
  • The challenge of understanding how agency margins work.

Today I’m focusing on pay rates from the perspective of workers and how there are many other factors that can influence a worker’s decision on where they work, and last but not least I look into how to manage expectations internally.

Keeping rates sustainable – making it worthwhile for the worker

Whilst demand for skilled workers is currently outstripping supply it’s easy to think that the amount that you pay for those workers will have to go up, but this is not necessarily the case. Whilst pay rate is of course important, a worker's decision on where to work is also led by a number of other factors, such as the work itself, length of assignment, departmental profile and culture, amenities and work/life balance.   

We are increasingly working with our customers and our agency suppliers to ensure that the full range of benefits to working at that customer are highlighted to potential workers, so that they can make an informed decision. 

Keeping rates sustainable – managing expectations

Over the last 24 months we have been regularly canvassing the views of our agency suppliers to understand market dynamics, and one consistent theme has been of managing expectations. In a recessionary market where there is an abundant supply of skilled workers, the chances of recruiting someone who meets all your criteria are relatively high, so conversely with the market going full circle, expecting the same now can lead to disappointment. 

The best way to address this is to allow agencies to manage the expectations of your line managers for you, and this is a key part of the agile working model that we have developed, both within our technology and our supply chain management approach. This will help your managers to focus on their required outcomes, rather than their perception of what they need, and enable them to benefit from the recruiters knowledge of the market and what skills are available. 

Whether you allow a managed service provider to manage this on your behalf or not, what is of course of paramount importance is that these relationships are strictly governed. There is a fine balance between being advised of market dynamics and being sold to. 

A core focus of our service centres is on building strong working relationships with our agency suppliers; whilst this takes time, their knowledge and advice can be invaluable in addressing some of the recruitment challenges that we face today. 

In my next piece, I will explore this supplier engagement process further, by looking at the importance of putting the customer in control at a localised level. 


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