HOWZAT

However, the council has decided to keep permanent recruitment in-house. “There are greater complexities around the recruitment of senior roles and this requires the active involvement of recruiting managers,” says Richard. “Until workforce planning is more sophisticated, it will be difficult to consider outsourcing the recruitment process.”

Retail

When your business employs more than 47,000 people, spending on recruitment can run into millions of pounds. So DSG International (DSGI), parent company of retail chains Currys and PC World, decided last year to reassess how it went about hiring staff. It found that with so many different operating divisions, there was a high level of duplication in the company. HR or local line managers contacted agencies directly when they needed to hire staff, leading to different rates paid to each agency, a large number of suppliers to deal with, no control over how the company attracted people and limited tracking of where the hires were in the company.

In June last year, a team at DSGI was charged with investigating ways to improve its procedures, including looking at recruitment outsourcing (RO) by visiting other large companies to find out how it had benefited them. It decided to build a centralised “resourcing centre of excellence” in-house. Sharon Ridgway, head of resourcing in the UK, explains: “We decided that having recruitment in-house means it absolutely understands the business and is an integrated part of the business. A third party may not understand the culture or the business objectives and priorities.”

The company was also concerned about whether its employees would feel they had good career prospects if they were hired by an outside company.

It developed a centralised recruitment division built around an in-house online recruitment system, concentrating on increasing the number of direct hires and cutting agency fees. All vacancies go through a central recruitment team after being raised by line managers and signed by a director, and vacancies are publicised across the whole group before being advertised externally.

“We have more control now over how we attract people and how many temps we’re hiring, and we’re cutting down the time it takes to hire,” says Ridgway, who estimates the company has saved £200,000 and reckons that more savings will come when the number of direct hires continues to rise.

IT

Recruitment outsourcing in the IT sector can throw up some rather interesting dilemmas. RO is a technology-led process — so when it comes to IT clients contracting out their recruitment division to a third-party technology supplier, well, the relationship can become a little fraught.

Alan MacKinnon, head of resourcing at Northgate Information Solutions, which provides IT systems, says that for his company, it felt like a “racing car driver hiring a chauffeur. You are always going to feel that you could be doing it better”.

This possible pitfall hasn’t stopped the IT sector becoming one of the most enthusiastic adopters of RO. Financial services and IT are the most advanced sectors in dealing with RO and, as a result, the market has become highly competitive. Analyst Nelson Bostock estimates that the global RO market within IT is worth £100m.

Two years ago Northgate, based in Hemel Hempstead, called in consultant Price Waterhouse Coopers to investigate how to run its business functions more efficiently, in particular procurement and human resources. It recommended that recruitment, then handled in-house by a central division, could be run better by outsourcing it.

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