The importance of auditing your recruitment supply chain

Where organisations engage multiple suppliers for the resourcing and management of their contingent workforce, this extended supply chain can often be difficult to monitor and assess for performance.

Using an external compliance partner to develop clear supply chain audit processes, can ensure that organisations remain compliant and up to date with how their suppliers are performing, as well as drive engagement at every level.

Managing compliance

The temporary employment of workers is a complex task, especially given the large amount of legislation and regulatory compliance required to meet HMRC’s requirements.

Whilst many of these rules are the recruitment agency’s responsibility to fulfil, organisations will still want to consider their brand perception and any potential damage to their reputation that could occur where a supplier is not compliant. Whilst the organisation in their role as the client may not be directly accountable for non-compliance, the impact of any high-profile issues can have a lengthy and damaging affect none the less.

Reviewing performance

It’s crucial that an organisation has good overall management and insight of how their supply chain is performing and whether all regulatory compliance is being met. Understanding what to measure and how to benchmark effectiveness though can be difficult when there is nothing to compare against.

It is therefore important to collaborate with an experienced partner, who can draw down from their industry knowledge – to ensure robust auditing measures, service levels and key performance indicators are in place to gauge the effectiveness and compliance across the supply chain.

Engaging the supply chain

A well devised compliance-led supply chain audit can provide a fantastic opportunity to open two-way dialogue with suppliers – ensuring they’re given the appropriate mechanism to air any concerns they may have and suggest potential improvements.

At Linx, we work with clients to ensure that all parties best benefit from the audit, so it is not seen as a one-way formal process which leaves no room for recruitment agencies to get fully involved. Taking an independent approach to auditing, such as engaging a partner like Linx, can encourage suppliers to be more open and forthcoming with feedback, and allow them to feel part of the overall compliance strategy.

“Implementing supply chain audits can be daunting for both the client and supply chain, so it’s essential that the entire process is open, transparent and well communicated. This approach ensures that suppliers don’t feel daunted by the prospect of being audited. Helping them to understand that the process has not been devised to challenge them, but to simply ensure standard checks are in place to check compliance and give them a forum to get involved.”

– Will Fossey, Linx Director

Devising the right auditing approach

How you approach auditing your supply chain will depend on what your aims are. What are you trying to establish? How frequently do you want to check compliance? How in-depth should the auditing be? How regularly can you genuinely expect your supply chain to dedicate time and resource to complete auditing processes?

Finding the right balance, will help to ensure the supply chain continues to be engaged with the process.

Creating insightful reporting

Once the right information has been captured from the supply chain, the various data points come together into a meaningful management information suite. Allowing organisations to instantly gauge overall performance and compliance, as well as digging deeper to assess individual suppliers and conformance with specific legislation. This information allows organisations to put a strategy in place to identify and implement any required changes, as well as taking onboard supplier feedback and improvement suggestions.

Linx’s Compliance as a Service is tailored to suit each client, looking at what’s important for their organisation, what regulatory compliance needs to be met, and how they can best engage their supply chain. The team then work with stakeholders to develop and introduce supply chain auditing, ensuring there is a careful balance between capturing the data and maintaining an engaged supply chain.