We have to look deeper and deeper into how we can make savings,” says Gillian Hibberd of Buckinghamshire county council. The authority has spent more than a year choosing a recruitment outsourcing (RO) supplier and is convinced that the move could cut its £9m recruitment bill by up to 10%.

Hibberd, corporate director of people and policy, is taking the unusual step of including school posts in the proposed 10-year contract, due to be awarded in the new year. “The current recruitment processes throughout the organisation need to be standardised for temporary and permanent staff so we know exactly what skills we have,” she says. “Schools tend to have very individual needs, so our 200 schools can still choose which supplier they want to use, but we are confident this new arrangement will be superior.”

Considerable savings will come from cutting the council’s £1m recruitment advertising budget, which could fall by up to 40%. Hibberd, the vice-president of the Public Sector People Managers’ Association, a human resources trade body, also believes that outsourcing will help to plug skills gaps in areas such as planning and social care by promoting the authority more effectively.

“Councils have to become employers of choice to attract talent and this partnership will allow us to brand ourselves more efficiently and cast our recruitment net wider,” she says. “There can be too many generalists in in-house recruitment teams.”

The contract is due to start in April and the two companies on Buckinghamshire’s final shortlist will be crossing their fingers over Christmas as the public sector is regarded as something of a safe haven for RO firms during times of economic difficulty. Central and local government staff numbers tend to rise when there is a downturn.

Lesley Briant, relationship manager at Parity Solutions, which supplies contractors to public sector clients including the Ministry of Defence and the Department of Health, says applications for civil service jobs have risen 20% in the past few months. She highlights a large migration of IT professionals from the private sector: “The public sector is working hard to promote ‘professions’ within government, and with the credit crunch more private sector workers are looking to switch.”

Lorraine Butler, a client relationship director at Carlisle Managed Solutions, which works with councils and bodies such as the Healthcare Commission, says public organisations have different needs and priorities to private companies when it comes to recruiting during an economic slump: “They always have to provide certain services but clients are more mindful of how they are spending taxpayers’ money and whether they are meeting their corporate social responsibility and diversity targets. An RO supplier must understand this.”

Public sector clients are becoming more demanding as a result. They want greater evidence from RO providers that outsourcing will improve the culture of their organisations as well as the skills base. They also want to be able to measure accurately the performance of candidates recruited using this method, and to see if retention rates are good.

Cumbria county council is bringing recruitment back in-house temporarily from March because it believes that its current contract, agreed 10 years ago, is out of date. Jim Savege, corporate director for organisational development, says: “Our contract does not give us room to modernise the service easily or take out particular processes we want to bring back in-house from time to time. After March we can rip the guts out of it to ensure it is still working well for us. We want to work more closely with other councils to attract talented people into the public sector.”

Those who argue against recruitment outsourcing in the public sector point to the large volume of staff being processed and the tight margins some RO suppliers are asked to work to. The concern is that some candidates are not being screened or tested thoroughly, which could have serious consequences when recruiting for sensitive posts within local councils or healthcare trusts.

East Sussex county council, which is reluctant to outsource recruitment despite admitting it can struggle to fill some posts, such as teachers and care workers. “For many forms of recruitment, such as for people who will be working with children or vulnerable adults, extra levels of checks are needed and we need to be totally confident in the checking procedures,” says Leatham Green, assistant director of personnel and training.

Concern about tight margins has also led to claims that some RO providers have been increasing their income by marking up contractors’ pay rates. De Poel Consulting believes its system ensures transparency. It analyses how much an organisation is spending on temporary staff and calculates an optimum rate for each job. “We then work with a panel of recruiters who agree to charge what we consider to be favourable rates,” says John Simmonds, managing director. “We save clients at least 6% on their recruiting bill.”

Chris Stirling, a director at consultancy Deloitte’s public sector practice, expects more public sector organisations to follow the Buckinghamshire example next year as pressure mounts on employers to become more efficient and find new ways to attract and develop talented people. “There is a need to manage recruitment more effectively in the public sector to ensure all the skills an organisation needs do exist, either among temporary or permanent staff,” he says.

While outsourcing is proving popular in the public sector – partly because the selection process can be so onerous, especially for higher-level jobs – the real test during an economic downturn may be whether it actually helps organisations to recruit and retain the best people.

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