Revolutions in recruitment - how can you find the right people?

Written by
Changeboard Team

08 Dec 2011

08 Dec 2011 • by Changeboard Team

How can you reach out to top talent?

With globalisation and a shift in demographics, the talent businesses are on the hunt for are not necessarily where they’re needed, making it harder for organisations to reach them. What talent want is also changing and the appeal of large pay cheques is decreasing as employees look at the added value for them.

With this in mind, there are three big drivers for HR professionals when it comes to building recruitment and talent management strategies:

  • Developing a direct relationship with the marketplace and key candidates in a way which has not been required before
  • Pipelining talent to stay ahead of the curve
  • Integrating recruitment into the talent planning process to increase retention.

So what are the options for HR professionals when it comes to recruiting against these issues?

Recruitment agencies

The traditional route of recruitment agencies has several benefits and in a difficult market some organisations cannot do without them. These agencies use the expertise and candidate connections to fill the recruitment gaps quickly. Their ready supply of people means they have access to talent an organisation may have no links to.

As an external resource which is removed from the company some of the control is lost and it can often be the case that the company’s culture is misunderstood leading to a mismatch between the personal traits of new recruits and the environment they will actually be working in.

One of the pros of this route also brings to light a downside. Whilst the candidate connections an agency has can be beneficial, an organisation is essentially losing the opportunity to build a direct relationship with candidates in the market, one of the key drivers for talent strategy.

Talent pipelining is key issue in a changing business economy, but it is not necessarily something which is in an agency’s real interest to do. As one of the more expensive options available then, you get only a short term return on your investment.

The in-house recruitment function

Developing an in-house recruitment function is another option which is becoming more appealing to HR professionals as they look to cut costs. Obviously it is cheaper to do it yourself, but this option also allows the company more control and the opportunity to build, and retain, its own knowledge and intellectual property (IP).

But the in-house function option can be tricky, and it can take a lot of work to get it right. Take Electrocomponents, the world’s largest distributor of electronics and maintenance products, for example. They have an in-house recruitment team of four with three members focused on the UK and one on continental Europe. 

When the in-house function was set up its emphasis was on administration rather than active talent sourcing- something which they have worked hard to completely turn around. As a result Electrocomponents has been able to markedly cut average time to hire and direct costs, mainly because the organisation has been able to reduce reliance on agencies by using online channels such as LinkedIn for management appointments. In the UK, for example, only 20% of recruitment is now done through agencies, down from as much as 60% in the past.

While this example shows that it can be done well in-house, the journey to this position is never easy and it can be a long process; not an ideal solution when organisations need expertise quickly.

Although cheaper, this option will involve bringing in fixed costs at a time when organisations are looking to reduce this. Ultimately, the in-house function is always going to be a compromise and you’re never going to have the perfect solution in-house for all situations a company may face.

Recruitment outsourcing

The third option, recruitment outsourcing (RPO) can be split into two types; first and second generation. First generation recruitment outsourcers looked to bridge the gaps between the two options listed above and have brought a lot of benefits to organisations. They saved the fixed costs of the in-house team whilst allowing access to expertise immediately. This service also helped give a degree of control back to organisations in terms of compliance and data.

However first generation RPO is focused heavily around costs and you could almost class it as a 'same mess for less' situation. Yes it is a cheaper option, but there are no drivers for RPO to reduce the needs to recruit and increase retention, meaning an organisation could still lose its IP and knowledge to someone else.

Second generation RPO consultancies like Ochre House bring the cost savings, but also turns counter the negative aspects of first generation RPO with embedded, integrated models which bring both cost savings and value. They provide external experts who are really tuned into your market and act as a recruitment partner who become more of an extension of the company, helping to plan for the future and develop people and talent pipelining strategies.

This second generation of recruitment outsourcing doesn’t just supply the talent for the job needed at a specific time at a cheaper cost. Instead consultants work with HR and line managers to build talent strategies, looking at all stages of the recruitment process from identifying talent right through to the induction period to ensure the organisation retains this resource which they have worked hard to attract.

Choosing the best option

Every organisation faces different constraints and targets which will determine the recruitment route taken. There are several things HR professionals will need to consider during this process; weighing up the long and short term needs, budgets and talent strategies for example.

But it should also be taken into account that these functions can work with each other. Yes, RPO companies do often push aside some traditional recruitment providers as they develop their clients’ capabilities, but, at least in my view, only those who are not delivering real value.

RPO consultancies and recruitment agencies that provide real return on investment, we can be allies rather than enemies, helping to create greater clarity around roles and more realism about what is and isn’t possible within employment markets.

Getting recruitment and talent management right can be tricky at the best of times, but in such an uncertain economic climate it is important that HR weighs up all options available to choose the right route to their talent.