For Human Resources (HR) and Talent Acquisition (TA) Teams at large organizations, the pressure is on to attract and hire top talent. Fortunately, recruiting agencies offer valuable services regarding staffing and operational support. Yet, when a company works with more than one staffing firm at once, there can be some compliance risks. These risks may include keeping up with various sets of contract terms, complying with numerous liability and indemnification terms, and adjusting to inconsistent hiring practices. 

So, how can companies take advantage of expert recruiting services while avoiding recruitment compliance nightmares? Choosing the right VMS can help.

In this blog, we'll outline the challenges inherent in managing multiple search firms, with tips for how a VMS can help mitigate recruitment compliance risks—and put those nightmares to bed.

Why is compliance important when working with search firms?

Organizations don't always have a sophisticated way to track all their agreements when working with multiple recruiting firms. On top of that, Talent Acquisition Teams must be careful to comply with contractual terms such as payment terms, requisition fees, and review periods. 

Whenever companies hire new talent, they must comply with:

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• Company policies. These vary from organization to organization, and keeping them in check is essential.
• Regulatory requirements. Many regulatory requirements occur during the staffing process. These include managing onboarding documents, tracking compliance certifications, and maintaining a centralized record of candidate interactions to ensure privacy and security.
• Ethical considerations. It's crucial to maintain ethical standards in all staffing processes. This includes keeping confidential records, avoiding conflicts of interest, and ensuring fair and equitable search and hiring practices. Plus, local and national laws protect from hiring discrimination and ensure worker rights are protected.

What risks are associated with managing multiple search firms?

Working with staffing agencies can bring great value to large companies, from recruitment support to client relationship management. This kind of support can help when HR and TA leaders face pressure to find and onboard exceptional talent. Working with multiple staffing firms at once can be a big help in finding the right roles across various talent pools. Yet, there are compliance risks to be aware of when it comes to staffing agency compliance. 

Legal compliance risks

For companies working with multiple staffing agencies, legal compliance is often the biggest issue. Some of the most common staffing agency compliance risks include:

• Risk: Balancing multiple sets of contract terms. Keeping multiple contracts straight can be challenging, especially when working with multiple hiring agencies. The most important contract terms are usually liability and indemnification terms, which could have the biggest financial or reputational risks.  
• Risk: Adhering to local, state, and federal laws. In the United States, companies must adhere to legal requirements when bringing on new talent. These include national protections like the Family and Medical Leave Act (FMLA) and the California Consumer Privacy Act (CCPA), which gives California residents more control over their personal information.
• Risk: Keeping accurate records. It's critical to maintain privacy and security with regard to recruitment and onboarding records, which include candidate resumes, employment applications, and other employment documentation. 

Solution: Store and streamline all contracts and records within a VMS. 

One solution for maintaining legal compliance is to contain all recruiting documents and agreements within a VMS. By relying on a vendor management system, companies can work with recruiting firms with the ease of knowing all their contracts, terms, and legal requirements are housed and maintained in a central platform.

Operational risks

Operational risk has to do with recruiter / client relationships. Some of the most common operational risks include:

• Risk: Inconsistent hiring practices. Finding the right candidates can be challenging. Sometimes, working with various staffing firms to find that talent can yield the best results. Other times, inconsistent hiring practices can create headaches at best and noncompliance issues at worst.

Solution: Use a VMS to monitor consistency and compliance standards across the board.

Ensure that any new recruiting firms you work with know your hiring objectives and can work to meet them. Use a VMS to keep all contracts and terms in line so you can focus on hiring the best talent. 

Market and industry risks

There will always be market and industry risks outside your control. Still, it's important to be aware of potential risks and be ready to adapt.

• Economic downturns. Hiring freezes and budget cuts during economic downturns directly impact the demand for search services. 
• Industry shifts. Changes in specific industries or sectors can create sudden fluctuations in demand for certain types of executive roles. Keep tabs on emerging roles as industries evolve. 
• Technological disruption. The rise of AI and automation tools in recruitment may require search firms to adapt their strategies and invest in new technologies to see what makes sense for your organization. 

Solution: Using a VMS can create visibility with job roles and candidate management.

Having all recruiters streamlined on one platform helps companies maintain visibility into how their teams and resources are being allocated.

How a VMS helps with recruitment compliance

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A vendor management system is a cloud-based software platform that serves as a single portal for all staffing agencies a company works with. In terms of compliance, a VMS helps ensure that staffing firms adhere to company policies and regulations throughout the recruitment process—holding all firms accountable within a single system. Using a VMS can help organizations with improved communication, greater efficiency, and improved contract maintenance so as to avoid risking noncompliance. 

When choosing a VMS, compliance is one of the top features to look for, as well as data encryption and safety audits. Additionally, check to see if the VMS maintains compliance with regulations like GDPR (General Data Protection Regulation) as well as federal and local laws that help protect individuals' personal data as part of onboarding compliance.

In addition to compliance support, a VMS offers benefits like streamlined workflows to help with organization and prioritization when finding and onboarding talent. Plus, a VMS can provide enhanced visibility and data-driven insights, helping find opportunities for cost savings or improved efficiencies.

How Aquent Scout can help

By leveraging the right VMS, organizations can rest easy knowing they are correctly managing recruitment compliance risks. A strong VMS provides centralized oversight, ensuring compliance with all contract agreements, payments, and regulatory requirements. A VMS can also mitigate non-compliance risks, improve operational efficiency, and streamline hiring practices. In this way, HR and TA Teams can focus on what truly matters—onboarding top talent—without the burden of compliance anxiety.

Ready to improve your recruitment process and put those compliance nightmares to bed? Visit Aquent Scout to learn more about how we can help you attract and hire top performers, all while reducing risks and keeping your company in compliance. Contact our team today to learn more.