KeenHire Blog by Margaret Graziano

Recruitment Process Management

Every company is charged with the assignment of doing more with less. The movement to create efficiencies in every component of running a business has lead to a huge movement of outsourcing everything from office administration, technology, recruitment and manufacturing to accounting, supply chain, staffing and in some cases customer service.  Many of the largest companies in America have been among the first to explore Business Process Outsourcing (BPO) for some it is the best thing that they have ever tried, for others the results have been disastrous.

In the area of business that I specialize in I have been researching the RPO movement. Recruitment Process Outsourcing, is about removing the recruitment and staffing function from inside the company and having an outside vendor manage, execute and deliver people on an as needed basis. The choice to RPO has for the most part been about price, economies of scale and efficiency.  The most popular roles that I have read about RPO filling is call center, front line banking, customer service, retail, and medical.

Some user reports say this is the most efficient way for a National or Global organization to staff, others say their quality of hires has declined, unwanted turnover has increased and candidates are left with an ill feeling about the companies employment brand. 

What I have learned for sure is that RPO is not for every company; a company has to have certain staffing objectives that make an RPO offering appealing.

Just because RPO might not be the right answer for your company does not mean that there is not work to do to create an efficient, effective and highly successful recruitment function within your organization.  After all, your company is only as god as the people inside and an ineffective, inefficient recruitment process is a barrier between you and your next level of talent.

Over 10 years ago, when I owned Alliance HR Network, one of my mentors asked me for our operational quality ratio of interviews to hires. I did not have the number. He then asked me how many candidates we had to talk to, to generate a live interview, I did not have that number either. I began to see that my lack of managing those important numbers was in the way of me running an efficient recruiting operation and that was costing me money.

Efficiency

The journey was a painful one, back then we were interviewing 10 people to place 1 and we had to talk to 100 to interview 10. That meant that 90% of our time did not result in generating revenue. I began to understand more and more about lean manufacturing, operational excellence and performance ratios.  I chose to enroll in a certification program in organizational development and in that 12 month program I learned a great deal about why companies lay so many people off in recessionary times. 

I decided to go to work on my own company looking for ways to bring operational excellence, improve productivity, lower costs and continue to deliver a high quality of service.  What I learned and implemented was the impetus for the making of KeenHire. 

My team and I went to work on our business processes, we analyzed performance ratios in each of our core functions and worked on eliminating tasks that were irrelevant to effectiveness. We incorporated time saving technology that allowed team members to focus on high impact functions. We created a system for candidate intake that dropped our ratio from 10:1 to 3:1.  

Effectiveness

Considering quality was what my company was known for I knew I had to find a way to stand behind that claim beyond in words. This is what lead me to implementing behavioral interviewing and 'fit' assessments into our hiring and selection process. This not only aided us in the validation of the candidates we submitted, it save us thousands of man hours. It became much easier to select the best and eliminate the rest and was instrumental in my ability to quickly ramp up new hires. Our recruiters were making placements within 2 weeks on a desk, because I was hiring the right people and giving them a great process to follow. 

Our customers were delighted with the amount of data we had on each candidate we were representing. The real benefit was when our customers requested we manage the complete staffing of entire department, leadership and launch teams. The implementation of this conscious-hiring process not only saved us money and time, it was directly responsible for an uptick in work, sales and profitability.

Whether your company chooses to run recruitment from the inside or the outside it is up to you to manage performance in 3 key areas.  In no particular order, ensuring high quality hires, managing efficient recruitment processes and delivering a high quality of service to all of the stakeholders is critical to maximizing your return on your people investment and imperative to being an Employer of Choice.

Recruiting: Filling The Talent Pipeline

Filling the Recruiting Pipeline  

Sourcing and Selection are two very different worlds. One puts as many applicants in the pool as possible and the other sorts and selects the best fit for the fulfillment of the positions’ key objectives.  Given there is a War for Talent many companies fear that they can not afford to be highly selective in their recruitment efforts. The reality is while there is a war, there is also a recession which means certain industries are dying and with that is the emergence of talent from hidden sectors. 

If you strategize effectively you will easily attract solid ‘core’ talent from industries that are highly compatible to yours. Yes, you may have to train the candidate to your company, products and services. However if you conduct the hiring process with thoroughness and integrity you hire ONLY the best suitable talent - rather hiring the best suitable experience (which we all know backfires when it’s the wrong ‘fit’). Either way you have to train a newcomer to your firm, so it is your choice whether you want to train and fix bad behaviors or invest in up front industry, product and service training.  

To attract, hire and retain the “right” talent Keep in mind there are now a multitude of cost effective options and alternatives.  If you are choosing to pay a fee, or hire a contract recruiter ensure your recruiter is highly skilled in both search and selection, or consider outsourcing pieces of the processes to firms or people who are highly skilled in a specific area, or make certain that your internal resources have all the tools & training  they need to improve their hiring batting average.

Options for Generating Candidates at the top of the funnel:

A. Hire a Contract Recruiter, a full scale Search Firm or a local Employment Agency

Interviewing & Hiring A Recruitment firm or Professional Recruitment Contractor:
Questions you may want to ask.
1) How many placements have you made in our field/niche/industry/position level?
2) What is your passive candidate strategy? Please outline it.
3) What system are you utilizing to evaluate your candidates strengths, behaviors,and competencies as they compare to our immediate and long term needs for the role?
4) What is your due diligence process? Who pays for that?
5) What is the average tenure of your placements?
6) Will you consider a fee arrangement with a percentage weighted on retention
7) How many customers have you retained for 5+ years?

B. Sourcing Candidates through the Boards & Internet

1) If you using the boards to source candidates – hiring a 3rd party sourcing company might be a prudent option; these companies have armies of people who scour the job boards while we in America are sleeping. The average cost of this service is $1500.00 per search to $2500.00 per month.  Different companies charge based on the deliverable. This emerging industry is rapidly taking their stake in the talent acquisition sector.
           
2) Resume Search Aggregation and Filtering – these are software as a service subscriptions that take your job specifications and pull appropriate resumes from a multitude of job boards. This type of software can save your internal Sourcers or Recruiters hundreds of hours.

3) Posting technology - There is job board and social media posting technology that takes your single job posting and delivers it to hundreds of specialty sites in seconds. Pretty cool!

C. Passive Candidate Acquisition: Social Networking 

1) If you chose this route make sure you are hiring/contracting with a person who has no fear of rejection, is willing and able to make an abundant of outbound calls on a regular basis and who has strong talent in navigating around the internet.

2) Linked in and Face Book are by far two of the most effective ways to find passive talent. 

D. New Fashioned Head hunting

How is your recruiter planning on building the list of who to call? Do they have the resources for list building; will they outsource this function; if so how much will that cost?  There are excellent technology solutions that your recruiters need be using to maximize their efficiency and effectiveness. 

E. Create an EVP and promote the hell out of it

Find out why people work for your company, find out why they stay. Create an Employee Value proposition and promote it on social media, industry sites, internally, to customers, to local colleges and vocational schools, etc. 

F. Pay Referral Bonuses

G. Build Your Internal Recruitment Team to Maximize Your People ROI

Consider implementing B-F with a carefully selected and trained internal recruitment team. The internal team must be evaluated based on hiring metrics, retention, efficiency and value they provide.

The bottom line is make sure you are investing in the right solution for your unique situation.

Hard Won Staffing Lessons And Where We Go from Here

 

Although staffing employment traditionally is a leading indicator of recovery, professional recruiters today look forward with caution. This recession feels different -- not just a slowdown, but a disruption of the way business has been done.   As you formulate a strategic plan for 2010, ask yourself: "Can I afford a return to business-as-usual?"  Monster spoke to leaders in staffing whose hard-won wisdom points to a better future.

Staffing Solutions that Innovate

Dan Boersma of Laguna Source in Laguna Beach, CA specializes in finding talent for pharmaceutical, biotechnology and medical device makers. He's managed the downturn with a three-part strategy of client service, industry knowledge and old-fashioned hustle.

"In this recession, you're working twice as hard to make three quarters as much money," Dan asserts. "The big positive is you have a little bit of free time, to say, 'Hey, we have some time on our hands, what can we do that's going to help us long-term?'"

Talent shortages in his niche have helped, but as even successful companies try to do more with less, Dan finds he has to narrow his focus to develop deeper relationships with clients. This is the time to listen, to learn more about coming technologies and the skills needed to harness them, and to build trust.

Dan and his team watch for announcements on venture funding and company earnings that signal staffing opportunities. Press releases and news articles are obvious conversation-starters with potential clients. Less obvious is Dan's observation that his best currently-employed candidates are more reluctant to move to a new employer. They need reassurance that a medical technology firm, for example, will have staying power. Whether positive or negative, industry developments point to hidden corners where top talent and new prospects on both sides of the recruitment equation are open to change. Dan says, "If a company's doing layoffs, I want to be the first to talk to their people."

And then there's plain old bearing down in tough times. "In a downturn, recruiters tend to get down on themselves and the business," Dan says. "It's easy to blame things on a bad economy, but we get here early, stay late, work on weekends…staying aggressive like this has just kept us going."

Service, research, and hard work deliver. It's a simple plan, and it works for Laguna Source.

Rethinking Staffing Services

Margaret (Margo) Graziano of KeenHire in San Jose is taking the reinvention route; she believes that the fundamentals of staffing have shifted, and the future belongs to those who broaden their services.

Margo has moved her Talent Management Division from "getting people into chairs" to a form of human capital management consulting. KeenHire's clients, also caught in the disruptions of the Great Recession, face many hiring complications that boil down to doing more with less. They profit from expertise she's developed across the entire talent acquisition timeline, such as:



Risk Mitigation
"Clients are asking us to help them not hire the wrong people, because they can't afford to make mistakes," says Margo. Staffing can't just supply candidates and hope it works out (or blame a bad hire on a client's managers). Risk mitigation means helping a client design teams. What's the right mix of talents for a new initiative or product? How should the team work? Can the company adapt, and how?

It also means retention. "We see a lot more effort and money being spent on keeping the good people," observes Margo.

Hiring Improvements
Job descriptions can be a vise, squeezing the wrong person into a job because she happens to have the right skills. Margo counters this problem by assessing people well beyond skills. "I look carefully at the people who are already doing well in the job and build what we call a 'DNA thumbprint' of what the ideal candidate looks like -- not their resume but their values, beliefs, competencies and behaviors. We actually find and staff organizational development professionals, industrial psychologists, training and development people, HR, talent management people, talent acquisition, full-time and contract recruiters."

Human Resource Management
Human capital consulting from staffing companies can add value to processes like onboarding, top-grading and retention strategies. Once the staffing company has supplied great talent, it can help the client hold onto those people. This is more service, and while it reduces churn (and -- let's admit it here -- churn can make short-term profits for staffing companies) it deepens customer attachment and creates new services to sell.

"It goes beyond the hiring moment," Margo concludes. "We work with companies to help them develop coaching programs and training and development programs for their high potential people."

Where Staffing Goes from Here

As you plan for 2010, consider these likelihoods:

1) Staffing will see a resurgence but not a return to business as usual. The collapse of whole business areas and re-alignment of money (think automotive and health care, for two examples) means that client needs will change.

2) The super-candidate syndrome will continue. Margo Graziano suggests that staffing lead the conversation away from "Super Resume" to "Super Candidate" by finding greater alignment in values and capabilities than single skills.

3) There is no substitute for persistence and hard work, especially with your most creative employees. Open your business to their suggestions. Experiment. Be aggressive. Learn and change.

Great practitioners of staffing recognize a tectonic shift brought by such a brutal recession. Companies big and small will have to do more with less. Even as business picks up, the opportunity to lead change -- for your clients and your business -- is too exciting to miss.

By Doug Hardy: Monster Staff Writer

The Threat Of Recruitment Process Outsourcing

I've been fortunate in getting the opportunity to speak at a lot of conferences about the successes I've generated in the staffing world.  Those speeches tend to focus on ways to make third party staffing firms more competitive, because I come from that world, and I've seen what works.

One of the key takeaways from any speech I give is the need to understand what your clients are looking for, and what your competition will look like in the future.  Us old-school phone jockeys pride ourselves on our connections and the speed of our dialing finger, but in the complex world of corporate human resources, the comprehensive staffing firm is going to have a lot easier time then the smilers-and-dialers.

Corporate Human Resources departments are looking for partners who understand that making a few placements with a company is a net loss.  The time, focus, and money of making a few key placements spread out over numerous firms often turns HR executives into cold-calling punching bags.  They get so many calls that it often interferes with their ability to do their own work.  At the same time, smart companies recognize they can't fill all of their positions, and respect the work of genuine headhunters.

The threat to the industry isn't more technology, better job boards, and robust internal staffing departments.  The threat to staffing firms is Recruitment Process Outsourcing firms that offer full-service employment consulting in addition to recruiting.  We see some of this in the run to VMS systems in the last decade. There's not a recruiter out there that wasn't furious at being forced to make placements through a third party software vendor.  We adjusted (mainly by large staffing firms co-opting the model), and the model has shown some real weaknesses, but it's a warning sign to the third party recruiting industry.

Think about it.  Pundits have been forecasting (and sometimes wishing for) the demise of the staffing firm for decades.  Every new technology is supposed to end the era of the third party recruiter, and yet through early adoption, recruiters have actually grown in size relative to the industry.  We serve a useful function as the lubricant of corporate hiring.

There is no real alternative to our services that can dominate industry wide.  But what happens when a firm comes along that offers placement services, but backs them up with better hiring practices, benchmarking, and actually improves the overall hiring posture of our clients? What happens when Recruiting Plus becomes the model? 

The Value Of HR Outsourcing

The promise of outsourcing is economies of scale.  Executives know their companies do certain things well, and to succeed, one must focus on one's strengths.

Human Resources has spent the last thirty years evolving into a catch all of the employer-employee relationship, and on paper, it makes sense to outsource the more troublesome, or less efficient pieces of your HR operation.  Bringing in a company that specializes in background checks, or recruiting, or employee evaluations allows your company to focus resources, training and management on the processes, materials and services you excel at.   

So why doesn't it seem to be working?  The HR Marketer asks the question that is currently making the rounds of the HR conferences:  What's the Matter With HR Outsourcing.

From an outsider looking in, it honestly does not seem like the HR outsourcing industry has evolved all that much since Exult pioneered the concept of large-scale HR outsourcing in the late 1990's (Exult went public at $10 per share in 2002 and was purchased by Hewitt in 2004 for  for $6.30 per share). Even the experts disagree about the fundamentals of HRO as captured by Jessica Marquez in her story about HRO from last year's NY HR Week Conference & Expo - I'd expect the dialogue amongst HRO experts to be a little further along at this point in time.

The issue is possibly one of complexity, but also control.  Complexity comes from the processes that are built up over time to handle a company's hiring and employee policies.  People are not machines, and so the standard economies of scale might not apply across every industry.  The deals might be too focused on revenue, and not on quality.  Or it could just be a matter of adjustment.

Outsourcing is a discipline that should be graded on a curve.  There is an adoption curve to getting the maximum value out of an outsourcing agreement, and companies just aren't far enough along that curve yet, perhaps because the rate of change in the global economy and the local workplace has accelerated in the last thirty years.

The key, as in all projects, is to focus on manageable goals.  Setting realistic milestones and  building a trust factor between vendor and client takes real commitment.  Large projects require people who mesh together well, and when the focus is on revenue, the urge to cut corners is usually stronger then getting the job done right.

Outsourcing has a strong future, but it's going to grow from small successes, not enterprise-level agreements.

Being A Recruiting Tour De Force

I am looking forward to participating in & facilitating an Executive Briefing a the NAPS conference on November 1st in San Antonio with my three colleagues:

Shally Steckerl

Jim Durbin

Joyce Gioia

I am a runner. I bike. I swim. I compete in triathlons: not to win, just for fun and adventure. I really thought I was doing all this training to look and feel great in my fabulous forties. I did not realize that all this training would actually position me to become better at my job. But training has re-built the stamina that got me here in the first place. Training has enhanced my ability to climb those recruiting hills and glide down the other side.

Before the Fordyce conference (The Fordyce Forum) I planned to change my approach in my business. I was set to launch my new consulting firm this October and slowly hand over my recruiting business to another. At the conference, my love for the actual art of recruiting was re-awakened. There’s just something about making the right match and creating the right placement I can not give up. I figured out what I was causing me to feel burned out from doing the day to day hunt. When I came back, I made a declaration to become a Recruiting Tour De Force and committed myself to making the necessary changes I needed to make to have that happen.

After analyzing my business, it became clear that we had a pretty large base in one general industry that I have now labeled as Drug & Medical Information.  With only a few changes of ink, I re-branded my company as specializing in that field and I flew out to the DIA conference only 3 days after I returned from the Fordyce forum. My son went online and built a plan for me so that I could use my 4 hours of time as wisely as possible when I arrived in Atlanta. I quickly walked the floor of the exhibit hall and met the players I set out to meet, made my contacts as an EXPERT in Drug & Medical  Information and flew back home the same night. I came back and called every referral I had and within 2 months, I had five new key clients in medical education, drug launch, and drug development.   

My message to these companies and candidates is clear and simple. I am the person to know in the Chicago market. I am different because I benchmark each role. I meet the key players. I assess not only the candidate, but each opportunity, and the company, and I only present the best of the best. Oh..…and I almost forgot the caveat is that I source names of people who are already working at your competitor or a targeted company or in a targeted industry of your choice.  AND it is working!   My largest customer even delivers me a fresh list of source names to call each month.

Do You RPO?

Recruitment Process Outsourcing (RPO) is a form of business process outsourcing (BPO) where an employer outsources or transfers all or part of its recruiting, selection & on-boarding activities to an external service provider.  We have all seen the sweep of the human resources outsourcing craze (HRO) as how it has led the way for many companies to stay focused on their core competencies and not worry about the things they never meant to worry about in the first place, like payroll, benefits, compensation succession planning, performance programs, etc. The BPO movement has greatly impacted the staffing, search, and recruiting industry as we know it today.

As companies strive to stay competitive, they are exploring ways to create efficiencies in their operation and BPO, HRO and RPO is a way to narrow their focus, play to their strengths and leverage their power.   

The concept of an employer outsourcing the management and ownership of part or all of their recruiting process wasn't first realized during the late 1990s, however it is permeating through Corporate America like the smell of freshly baked apple pie. It is claimed that the cause for RPO was a shortage of skilled labor created by the late 90’s dotcom boom coupled with the Y2K crisis and RPO was created to fill the gap.

Cutting costs is often cited as the main reason for other forms of business process outsourcing and this may also be the case for RPO.  In most instances when organizations consider RPO it is not necessarily to cut costs, but rather to make their recruitment costs more variable and more closely aligned to organizational business cycle dynamics.

The use of RPO is also said be influenced by labor force trends.  Workers change employers more often than previous generations which were often employed by the same organization for their entire working life. The clear impact of having less people in the skilled labor workforce, the increase of international presence and overseas work assignments as well as the effect of de-regulated labor markets have all led to the shift towards contract and part-time labor and shorter work tenures.  These trends increase recruitment activity and may encourage the use of RPO. 

While there is certainly a need for temporary staffing, executive search and contingency recruiting, where RPO dominates is in the area of multiple hires for a similar or a group of similar roles.

The biggest distinction between RPO and other types of staffing is Process.  In RPO the service provider assumes ownership of the process, while in other types of staffing the service provider is part of a process controlled by the organization buying their services.
A main point to consider is that once the RPO masters their clients staffing requirements and creates efficiencies in the recruitment process it could very easily come to fruition that they become the single source provider for a company’s hiring needs.  With the mass access to off-shore, virtual and contract recruiters what is to say that a great RPO can not master every level of the clients hiring needs, including the executive level.

The Benefits of RPO.
RPO's promoters claim that the solution offers improvement in quality, cost, service and speed.  RPO providers claim that economies of scale - enable them to offer recruitment processes at lower cost while economies of scope allows them to operate as high-quality, specialists.  Economies of scale and scope are said to arise from a larger staff of recruiters focusing on individual clients rather than jumping from one assignment to the next, a continuous population of a customized databases of candidate resumes, investment in peer to peer networks, associations, and educational affiliations, capital investments in sourcing tools, as well as high volume buying power of hiring and selection tools.

RPO solutions are also claimed to change fixed investment costs into variable costs that vary with fluctuation in recruitment activity.  Companies may pay by transaction rather than by staff member, thus avoiding under-utilization or sacking recruitment staff when activity is low.

Potential Concerns with outsourcings of company recruitment processes may fail if not implemented correctly and with the right mindset.  An improperly implemented RPO could reduce the effectiveness of recruitment.  Additionally, the costs charged for recruitment transactions may total more than the cost of the internal recruitment staff, if the internal staff is not using agencies and tools that increase their overhead. Additionally, an RPO solution may not work if the service provider has inadequate recruitment processes or procedures to work with the client.

RPO may not resolve difficulties that organizations have hiring staff when they are perceived negatively by potential employees.  This instead requires improved branding and an adjustment of image.

Organizations with efficient hiring processes that are viewed as employers-of-choice by potential staff may stand to gain negligible benefits from RPO.

Competing in the HRO market allows you to leverage your economies of scale and scope while improving your efficiencies, making more placements, guaranteeing you a steady stream of direct placement income, and grow your market share! What are you waiting for?