There is a war going on in the recruitment market – the war for talent. In a
global economy facing the threat of recession, acquiring and managing talent
are two of the biggest HR challenges faced by organisations today. And the
key question many companies are wrestling with is this: is finding the right
talent, quickly, best put in the hands of outside specialists, or should
recruitment be managed in-house?
“Whoever you get to work for your business becomes part of that business and
will change it, so you have to trust whoever is handling that process for
you,” says Zain Wadee, director of corporate solutions at Hyphen, the
recruitment process outsourcing (RPO) arm of Spring Group, which helps
companies make the most of their employees’ skills and knowledge.
Firms need to assess how effectively they handle recruitment, then decide
whether it might be worth outsourcing all or part of these activities. “You
have to ask yourself, what are you prepared to give away?” says Martin
Reddington, co-editor of Technology, Outsourcing and Transforming HR, a
recently published analysis of developments in RPO. “You want to be able to
get a more competitive rate for recruitment without any service degradation.
If you have a superb internal recruitment function already, then there’s no
reason why you can’t continue to do it as well as any outsourcer.”
Maureen Robson, principal HR consultant with IT specialist Fujitsu Services,
says that companies need to understand their own requirements before
deciding whether to turn to RPO. “If recruitment is a big part of their
intellectual property, then they might not want to outsource it, and if they
have a distinct set of values and behaviour, then they either need to find a
similar outsourcing company or keep recruitment in-house.”
Compared with such commonly outsourced HR functions as payroll administration,
RPO is relatively new. The market for it is growing quickly, however, and is
already thought to be worth about £280m in the UK. But RPO, as a developing
concept, can mean different things to different companies. Tim Palmer, head
of HR practice at EquaTerra Europe, which advises firms on outsourcing,
defines RPO as “the independent sourcing of job candidates and the handling
of associated administration” – but definitions still vary widely, he says.
Many large organisations, including Prudential, Barclays, HBOS, Siemens,
National Grid, the NHS and local and national government departments already
use RPO, and research shows that the benefits in terms of cost and time
savings can be high. Client companies, according to outsourcing specialists,
can expect to save 20%-30% on the cost of hiring and 35%-50% on the time
taken to recruit.
Leaps in service quality have also been made, thanks to rapid advances in IT.
Current recruitment technology falls roughly into three categories:
recruitment manager systems, which manage the hiring process; service
management systems, which track agreements and monitor performance
indicators; and web-enabled systems, which allow companies to sift through
candidates more efficiently and build their brands at the same time.
Groups such as Ernst & Young, the global business consultancy, are
spending time and money building a presence on Facebook, the social
networking website, where job candidates can find information on the
company, ask questions and interact with existing employees. “There is going
to be more use made of social networking sites,” says Fujitsu’s Robson.
“They are an ideal channel for organisations to get their brand identity
across.” But not everyone involved in RPO agrees. “The jury is still out on
whether building a brand on Facebook would really add value, although for
lower-skilled, high-volume work it could be phenomenally successful,” says
Hyphen’s Wadee.
Many of the initial stages of the recruitment process can be performed online
via automated systems, from screening CVs to arranging interviews and
carrying out psychometric tests. Marika Hall, HRO business manager at
Northgate HR, a division of the software and outsourced solutions supplier
Northgate Information Solutions, says her company offers an integrated HR
and recruitment package that links job applications made through clients’
websites to Northgate’s own recruitment system and database. “The web is
definitely the way forward,” she says. “It’s faster, paperless and makes
things much easier. And the beauty of the web is that it’s 24/7 – people can
log on whenever it is suitable for them. It puts them in a nice, calm
environment to do psychometric testing, and via the web you can have
selection criteria input, set specific questions, filter who gets through to
the next stage and eliminate ones who can’t progress if they don’t have the
right qualifications.”
Advances in IT offer other benefits, too. “Technology is increasingly being
used to deal with compliance issues, such as proof of a person’s work
permit,” says Wadee. “Historically, it has been very difficult to keep tabs
on the volume of recruitment. When it is paper-based, it is an
administrative nightmare. Now you can do it all online by creating a data
warehouse, with criminal record checks, for example. Candidates can check
their information and there is a much better audit trail, so it is easier
for all parties to identify gaps and problems.” Technology has its limits,
however. Says Robson: “It can take the admin burden out and speed up the
time to hire recruits, but it is not going to work unless you have got the
right people in place to operate it. There has to be a good relationship,
which is then underpinned by technology.” If outsourcing goes wrong, warns
Reddington, it can be expensive to fix. “You’ll be locked into an
outsourcing contract for years, so it’s not something you should go into
lightly.” Last year Sodexho, the multinational catering group, brought all
its recruitment back in-house after a three-year outsourcing contract with
Berkeley Scott ended. The group, which employs 48,000 people across five
business sectors, said it needed a “quicker and more efficient” recruitment
process.
Robson has seen several companies take their recruitment back in-house. “It
has happened that companies have outsourced without understanding the scope
or requirements of the contract. Or perhaps they didn’t realise that they
should have been more precise.”
And, says EquaTerra’s Palmer, in outsourcing, as in life, “you get what you
pay for”. Research by his firm found that clients who paid more were more
satisfied with their outsourced service. “I’m not advocating paying over the
odds,” he says, “but if you let the RPO make money, then you’ll be happier.
Because if the RPO is not making money out of you, then it won’t have the
available funds to sort out issues that arise or to innovate.”
Central services
FINDING and hiring the right people is a challenge for any company. Doing so
when your firm is virtually unknown, despite its £750m annual turnover, is
even harder. And keeping track of the cost and time spent on every person
hired in a high-turnover industry is nigh on impossible when your
recruitment technology consists of thousands of separate Excel spreadsheets.
It’s no wonder, then, that SSP International, which runs catering franchises
at railway stations and airports for brands such as M&S Simply Food,
Burger King, Upper Crust and Caffè Ritazza, decided to overhaul its
processes radically.
The company recruits 5,000 team members and 400 managers each year, of which
1,000 are required only during the summer travelling season. “We looked very
seriously at outsourcing our recruitment,” says Karen Shotbolt, left, the
company’s UK human resources director, “but we really wanted to get people
into our company who would understand our business and build relationships
within it on a strategic level.”
Maria Harrop was brought in as UK resourcing manager and now heads a
centralised team of five people. Gone are the days when local line managers
recruited on a case-by-case basis, leading to pay and contract disparities
across the company. Now vacancies are processed centrally with technology
from HR and payroll specialist Ceridian, recruiting has switched from 90%
agency-sourced to 80% direct hire, and time to hire has been cut by about
two weeks. In the first three months of using the system, the company saved
£120,000, which has more than paid for its £70,000 spend on technology and a
new website.
