In the first half of a new financial year, recruiters are encountering clients looking to move away from preferred supplier lists (PSLs) in search of a better deal.

“We started getting emails in April from clients saying they wanted to cancel their PSL agreements with us,” Luc Fountain, managing director at commercial staffing firm Liberty Resourcing, told Recruiter.

Fountain adds that since April, his accountancy clients have said they were willing to work with him but not at the previously agreed rate, and sought new initiatives and services that the commercial recruiter could offer them.

And Fountain says that in the commercial sector the role of the recruiter is changing due to a candidate-heavy market.

“Before now, clients were paying an agency to go out and find people; they had to spend a lot of money on advertising and candidate attraction.

“Now it is more sifting through huge volumes of candidates, kissing enough frogs until you get your prince.”

The rigidity of the PSL is also being eschewed by independent bars and restaurants, according to Sarah White, client services manager at hospitality recruiter Cartwheel.

White says that operators were getting frustrated with having a PSL in place, as it was precluding them from local talent pools.

“Businesses that are big sloths don’t change and don’t know who is in an area. Cartwheel is based in Nottingham, but they could have more people on their books than a big multi-national recruiter which has an office in Manchester, for example. It’s all about using the best people for that particular vacancy,” she says.

In the retail sector, Kate McCarthy, managing director at McCarthy Retail Recruitment, says that while larger operators were sticking to PSL agreements, beleaguered independent retailers were looking to drive down costs.

She told Recruiter that the only differentiator for some recruitment agencies was cost, which encourages the marketplace to squeeze staffing firms on fees. McCarthy adds that a client had approached her wanting a reduction in fees, as well as a total outsourcing solution, a proposal she walked away from.

Emma Entwhistle, head of recruitment services at Crimson Skills, told Recruiter that in a buoyant market clients require a PSL to handle volume recruitment and multiple hires, but in this market clients want to be sure of an exact fit, which has caused the IT recruiter to change strategy.

“When the market was healthier, companies could afford to risk the approach of throwing the job to a few agencies. In a candidate-heavy market, that does not bring in the best talent,” she says.

“We are being more selective about the assignments we undertake. We are taking on niche roles such as IT professionals conversant in systems that are read in a particular software language and executive positions to work with companies to go out and attract the absolute best talent.”