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REASSESSING RECRUITMENT: HRM READERS SUBMIT THEIR RECRUITMENT QUESTIONS TO OUR PANEL OF EXPERTS
Chicago, IL - July 23, 2010
Lily Flores, Human Resource Director, Nautilus asks: Picking the right person for the job is a clear priority. What are the potential business implications of poor hiring choices?
Patrick Beharelle. For customer facing positions, making the right hire is often the difference between earning a new customer or not, receiving repeat business from a customer or not, expanding the breadth and depth of the relationship or not, or creating positive referrals or not. Of course, the top line and bottom line implications of making great hires versus an average hires can be significant for the reasons just mentioned.
Working in conjunction with clients, RPO providers have conducted several head to head comparisons to measure the impact of making a hire via an RPO engagement versus a client’s traditional hiring process. Recently, one such example involved a six month head to head pilot whereby a portion of the client’s position’s were recruited via the client’s traditional process and the remainder were recruited by PeopleScout via an RPO engagement. The pilot was carefully constructed to allow for a true head to head comparison. Key metrics such as 180-day attrition, sales quota attainment and hiring manager satisfaction were measured. The results were decisive. Attrition was cut by 10 percent and sales were 14 percent higher for candidates recruited by PeopleScout than via the traditional process. Hiring manager satisfaction was also favorably tilted toward the RPO hires. Following the conclusion of the pilot and based on the decisive results, the RPO engagement was expanded enterprise-wide.
Historically, the business case for RPO has been predicated on cost containment. More and more, we are seeing companies choose RPO due to the revenue implications of hiring higher quality customer facing employees.
Manoj Tiwari. Making a poor hiring decision can cost you time and money. Studies have shown that a bad hiring decision can cost as much as three times and employee’s annual compensation…not to mention any expenses associated with unemployment and exit activities. There are also less tangible items affected such as lost productivity, performance management, and even low morale. BALANCEtrak, an applicant tracking application, has been effective at helping companies identify quality talent and monitor the performance of their hiring practices. This allows them to uncover what works in selecting a good hire and eliminate what does not.
Craig Pintoff, VP, Human Resources, United Rentals, Inc. asks: Social networking technologies have become ubiquitous in recent years. Do you think that social techniques have a place in recruitment and applicant tracking or does it present more problems than solutions?
Manoj Tiwari. Since the technology is fairly new, we have yet to see the full impact social media may have on recruiting. However, there is a place for social media technology. Employers just have to be cautious and methodical in identifying the right sites to source for potential candidates. Recruiters also have to decide if they want to use sites like Facebook or MySpace as part of the screening process for evaluating applicants. They have to decide whether the content on these sites are really an indication of future job performance.
Terry Buzonik, HR Manager, ACE Controls, Inc asks: Many organizations might feel uneasy about outsourcing their recruitment processes. What clear benefits can an external provider bring that an in-house solution might be unable to?
Patrick Beharelle. It is important to note that most RPO engagements are not full end-to-end, enterprise-wide solutions encompassing all skills/locations. Many RPO clients choose to outsource part of their recruitment process or a subset of their positions.
There are several benefits that an organization can realize when it outsources part or all of its recruiting process. Rather than cover the gamut of possibilities, I’ll focus on two of the most common benefits: more scalability and a variable cost structure; and improved candidate quality.
More scalability/variable cost structure: An RPO engagement typically allows a client the flexibility to have resources scaled up/down in a more cost-effective manner. RPO pricing is typically on a per hire basis, hence hiring costs are more variable and more closely match fluctuations in hiring volume than an in-house solution affords (where costs tend to be more fixed). Moreover, given the RPO providers inherent advantage of having multiple clients to ebb/flow resources across, overall costs are driven down and true scalability is more easily achieved. Given today’s hiring volume uncertainties, a more scalable/more variable cost structure can add significant value and flexibility.
Improved candidate quality: RPO engagements often include a front-end review and redesign of the recruitment process, which can result in more structure, more consistency and higher quality candidates. At Peoplescout, we typically triangulate candidate quality by tracking multiple quality metrics such as: submittal/interview ratios, interview/hire ratios, hiring manger satisfaction, early stage attrition and post-hire performance metrics such as sales quota attainment. Although results certainly vary from situation to situation, most RPO engagements we have seen tend to show meaningful improvements, particularly for the more easily tracked metrics such as attrition and interview/hire ratios. No doubt improved candidate quality and reduced attrition can have significant top line and bottom line benefits.
Manoj Tiwari. Outsourcing allows companies to free up their resources to focus on more pressing tasks. External providers offer the advantage of concentrating their efforts on their client’s objectives. Outsourcing may also be cost-effective for some companies. For many of our clients, outsourcing is less expensive than the cost of internal resources, purchasing technology and the time it takes to find the right candidate. An external provider also brings expertise in researching, sourcing and tracking down candidates that meet their client’s talent needs.
Cherly Musgrove, HR Director, Goodwill Industries asks: The economic situation of the last few years has resulted in a wider pool of potential candidates in the job market? Does this make the job of a recruiter easier or does the larger choice make it more challenging to separate the wheat from the chaff?
Manoj Tiwari. The surge in job seekers resulting from the economy has been bittersweet. It has created more work for recruiters insofar as sifting through mounds of resumes to find qualified talent. That is why it is so important to have an applicant tracking system in place that can automate the pre-screening process and eliminate unqualified job seekers. What’s the sweet side? Companies have more quality candidates to choose from that can be acquired at a lower cost than in previous years.
Patrick Beharelle is the Chief Executive Officer of SeatonCorp, a best-in-class staffing and recruiting company that operates under the PeopleScout, Staff Management, and StudentScout brands. Beharelle has been a featured speaker at several key RPO industry events, a regular contributor to industry publications, and is a recognized thought leader in the RPO space.
About PeopleScout
PeopleScout is a leading provider of recruitment process outsourcing (RPO) services aimed at helping companies with their exempt and non-exempt hiring needs. The firm's suite of services includes RPO, employment branding, on-boarding, and employee retention. Annually, PeopleScout places over 180,000 hires via RPO engagements. Industries served include airline, financial services, telecommunications, retail, utilities, pharmaceutical, and transportation. PeopleScout's clients include some of the more recognizable names in the Fortune 500 list of companies. PeopleScout was recently ranked as a Top RPO Provider in HRO Today Magazine's Baker's Dozen in its fifth consecutive appearance on the closely watched list of industry-leading RPO providers as well as being named #1 in deal size. The firm also has been recognized as the #1 RPO Provider by The Black Book of Outsourcing on their "Top Ten HRO: Recruitment Process Outsourcing/RPO" list. For more information, please visit www.peoplescout.com or call 800-966-4803.