Recruitment Process Outsourcing

Recruitment
Recruitment refers to the process of screening, and selecting qualified people for a job at an organization or firm, or for a vacancy in a volunteer-based some components of the recruitment process, mid- and large-size organizations and companies often retain professional recruiters or outsource some of the process to recruitment agencies. E ternal recruitment is the process of attracting and selecting employees from outside the organization. !he recruitment industry has four main types of agencies" employment agencies, recruitment #ebsites and job search engines, $headhunters$ for e ecutive and professional recruitment, and in-house recruitment. !he stages in recruitment include sourcing candidates by advertising or other methods, and screening and selecting potential candidates using tests or intervie#s. Difference between recruitment and selection %. Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organisation &'ERE() selection involves the series of steps by #hich the candidates are screened for choosing the most suitable persons for vacant posts.

Recruitment Process Outsourcing *. !he basic purpose of recruitments is to create a talent pool of candidates to enable the

selection of best candidates for the organisation, by attracting more and more employees to apply in the organisation &'ERE() the basic purpose of selection process is to choose the right candidate to fill the various positions in the organisation.

+. Recruitment is a positive process i.e. encouraging more and more employees to apply &'ERE() selection is a negative process as it involves rejection of the unsuitable candidates.

,. Recruitment is concerned #ith tapping the sources of human resources &'ERE() selection is concerned #ith selecting the most suitable candidate through various intervie#s and tests.

-. !here is no contract of recruitment established in recruitment &'ERE() selection results in a contract of service bet#een the employer and the selected employee.

Recruitment Process Outsourcing

Steps involved in Recruitment Process

The decision is made as to whether recruitment is necessary.

The job description is prepared.

The personnel specification is prepared.

Plans are made on how and when to advertise.

Applicants are short-listed.

References are requested.

Candidates are invited for interviews and selection tests.

The successful candidate is offered the job and si ns the contract of employment

Recruitment Process Outsourcing

Some regular methods of Recruitment are

1) Head Hunting: .any organizations have active formal employee referral programs, particularly in tight job mar/ets or #here the employer has difficult-to-fill or high-turnover positions. !hese programs re#ard employees for referring applicants to the organization. Other organizations have less formal programs and encourage employees to refer potential applicants, but do not provide an incentive for doing so. E perience and research sho# considerable benefit to the employee referral type of recruitment. 0irst, employees are not li/ely to refer applicants that #ould not be good employees. !hey do not #ant to be embarrassed by the performance or conduct of their referral. (lso, candidates that are referred by employees typically already have begun the orientation process and have some#hat of a realistic job previe# via their relationship #ith the current employee. 0inally, there is a positive correlation bet#een employee referral and employee retention of those hired as a result. !here is, ho#ever, one potential problem that can associated #ith employee referrals. Employees tend to refer their relative and friends, #ho most li/ely are of the same

Recruitment Process Outsourcing ethnicity or se as themselves. !herefore, this type of recruitment does not normally facilitate the achievement of diversity and affirmative action plan goals and can create

adverse impact. !his is particularly true if the organization has a past practice of discrimination. 2) Job posting on job sites ( au!ri" monster" timesjobs etc):

Job posting is the process of advertising and publicizing job openings to employees. !his might be accomplished by physically posting the opening on bulletin boards or by electronically posting them on the company1s intranet or 2nternet. 2t is then up to the employee to actually apply for the position.

#) $mplo%ment &gencies: (s mentioned earlier in the discussion of outsourced recruitment, employment agencies and job search firms often are good sources of job candidates. 0irst, all states have unemployment offices, displaced #or/er units, or similar agencies performing the same function. !hese are often sources of applicants. Private employment agencies can be viable sources of applicants. !hese firms most frequently charge the organization a fee for referral of candidates, either on a contingency or retainer basis. 3ontingency-based firms receive the fee only if the

Recruitment Process Outsourcing applicant is hired, #hereas retainer-based firms receive a fee for engaging in the search even if no one is hired. Employment agencies normally prescreen the applicants for the organization and refer only those that are qualified. !he agencies often have contacts and relationships that

the organization does not, and might be able to locate e cellent candidates for higherlevel managerial and hard-to-fill technical and professional positions. (lthough using employment agencies and search firms might be cost-effective and yield results that the organization could not achieve on its o#n, doing so can be e tremely e pensive. 3osts for using these types of firms often run *-4+56 of the yearly salary for the position being recruited.

') &dvertisements on ne(s papers li!e )*+" Hindu etc,

-) .ontract staffing

Recruitment Process Outsourcing

*utsourcing
Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company. !he decision to outsource is often made in the interest of lo#ering cost or ma/ing better use of time and energy costs, redirecting or conserving energy directed at the competencies of a particular business, or to ma/e more efficient use of land, labor, capital, 7information8 technology and resources. Outsourcing became part of the business le icon during the %9:5s. 2t is essentially a division of labour. *vervie( Outsourcing involves the transfer of the management and;or day-to-day e ecution of an entire business function to an e ternal service provider. !he client organization and the supplier enter into a contractual agreement that defines the transferred services. <nder the agreement the supplier acquires the means of production in the form of a transfer of people, assets and other resources from the client. !he client agrees to procure the

Recruitment Process Outsourcing services from the supplier for the term of the contract. =usiness segments typically outsourced include information technology, human resources, facilities, real estate management, and accounting. .any companies also outsource customer support and call center functions li/e telemar/eting, 3(> drafting, customer service, mar/et research, manufacturing, designing, #eb development, print-to-mail, content #riting, ghost#riting and engineering. Offshoring is the type of outsourcing in #hich the buyer organization belongs to another country.

Outsourcing and off shoring are used interchangeably in public discourse despite important technical differences. Outsourcing involves contracting #ith a supplier, #hich may or may not involve some degree of offshoring. Offshoring is the transfer of an organizational function to another country, regardless of #hether the #or/ is outsourced or stays #ithin the same corporation;company. &ith increasing globalization of outsourcing companies, the distinction bet#een outsourcing and offshoring #ill become less clear over time. !his is evident in the increasing presence of 2ndian outsourcing companies in the <nited )tates and <nited ?ingdom. !he globalization of outsourcing operating models has resulted in ne# terms such as near shoring, noshoring, and right shoring that reflect the changing mi of locations. !his is seen in the opening of offices and operations centers by 2ndian companies in the <.). and <?. ( major job that is being outsourced is accounting. !hey are able to complete ta returns across seas for people in (merica.

Recruitment Process Outsourcing .ultisourcing refers to large outsourcing agreements 7predominantly 2!8. .ultisourcing is a frame#or/ to enable different parts of the client business to be sourced from different suppliers. !his requires a governance model that communicates strategy, clearly defines responsibility and has end-to-end integration. )trategic outsourcing is the organizing arrangement that emerges #hen firms rely on intermediate mar/ets to provide specialized capabilities that supplement e isting capabilities deployed along a firm1s value chain 7see 'olcomb @ 'itt, *55A8. )uch an

arrangement produces value #ithin firms1 supply chains beyond those benefits achieved through cost economies. 2ntermediate mar/ets that provide specialized capabilities emerge as different industry conditions intensify the partitioning of production. (s a result of greater information standardization and simplified coordination, clear administrative demarcations emerge along a value chain. Partitioning of intermediate mar/ets occurs as the coordination of production across a value chain is simplified and as information becomes standardized, ma/ing it easier to transfer activities across boundaries. >ue to the comple ity of #or/ definition, codifying requirements, pricing, and legal terms and conditions, clients often utilize the advisory services of outsourcing consultants 7see sourcing advisory8 or outsourcing intermediaries to assist in scoping, decision ma/ing, and vendor evaluation.

Recruitment Process Outsourcing Reasons for outsourcing Organizations that outsource are see/ing to realize benefits or address the follo#ing issues"

.ost savings. !he lo#ering of the overall cost of the service to the business. !his #ill involve reducing the scope, defining quality levels, re-pricing, renegotiation, cost re-structuring. (ccess to lo#er cost economies through offshoring called $labor arbitrage$ generated by the #age gap bet#een industrialized and developing nations.

/ocus on .ore 0usiness. Resources 7for e ample investment, people, infrastructure8 are focused on developing the core business. 0or e ample often organizations outsource their 2! support to specilaised 2! services companies.

.ost restructuring. Operating leverage is a measure that compares fi ed costs to variable costs. Outsourcing changes the balance of this ratio by offering a move from fi ed to variable cost and also by ma/ing variable costs more predictable.

+mprove 1ualit%. (chieve a step change in quality through contracting out the service #ith a ne# service level agreement.

2no(ledge. (ccess to intellectual property and #ider e perience and /no#ledge.

Recruitment Process Outsourcing

.ontract. )ervices #ill be provided to a legally binding contract #ith financial penalties and legal redress. !his is not the case #ith internal services.

*perational e3pertise. (ccess to operational best practice that #ould be too difficult or time consuming to develop in-house.

&ccess to talent. (ccess to a larger talent pool and a sustainable source of s/ills, in particular in science and engineering.

.apacit% management. (n improved method of capacity management of services and technology #here the ris/ in providing the e cess capacity is borne by the supplier.

.atal%st for change. (n organization can use an outsourcing agreement as a catalyst for major step change that can not be achieved alone. !he outsourcer becomes a 3hange agent in the process.

$nhance capacit% for innovation. 3ompanies increasingly use e ternal /no#ledge service providers to supplement limited in-house capacity for product innovation.

Reduce time to mar!et. !he acceleration of the development or production of a product through the additional capability brought by the supplier.

.ommodification. !he trend of standardizing business processes, 2! )ervices and application services enabling businesses to intelligently buy at the right price.

Recruitment Process Outsourcing (llo#s a #ide range of businesses access to services previously only available to large corporations.

Ris! management. (n approach to ris/ management for some types of ris/s is to partner #ith an outsourcer #ho is better able to provide the mitigation.

4enture .apital. )ome countries match government funds venture capital #ith private venture capital for startups that start businesses in their country.

)a3 0enefit. 3ountries offer ta incentives to move manufacturing operations to counter high corporate ta es #ithin another country.

&ctivities for outsourcing Research 5 6evelopment !he competitive pressures on firms to bring out ne# products at an ever rapid pace to meet mar/et needs are increasing. (s such, the pressures on the R@> department are increasing. 2n order to alleviate the pressure, firms have to either increase R@> budgets

or find #ays to utilize the resources in a more productive #ay. !here are situations #hen a firm may consider outsourcing some of its R@> #or/ to a contract research organizations or universities. Reasons #hy a firm could consider outsourcing are"

ne# product design does not #or/ project time and cost overruns

Recruitment Process Outsourcing

loss of /ey staff competitive response problems of quality;yield.

!he /ey drivers for R@> outsourcing are emerging mass mar/ets and availability of e pertise in the field. 2n this conte t, the t#o most populous countries in the #orld, 3hina and 2ndia, provide huge pools from #hich to find talent. =oth countries produce over *55,555 engineers and science graduates each year. .oreover both countries are lo# cost sourcing countries. Other strategic drivers for outsourcing R@> are access to e pertise and intellectual property, filling gaps in the capabilities of the R@> function, managing ris/ better, reducing the time to mar/et, and focusing on the core competence or activities of the firm. .riticisms of outsourcing 7ualit% Ris!s

Buality Ris/ is the propensity for a product or service to be defective, due to operationsrelated issues. Buality ris/ in outsourcing is driven by a list of factors. One such factor is opportunism by suppliers due to misaligned incentives bet#een buyer and supplier, information asymmetry, high asset specificity, or high supplier s#itching costs. Other

Recruitment Process Outsourcing factors contributing to quality ris/ in outsourcing are poor buyer-supplier communication, lac/ of supplier capabilities;resources;capacity, or buyer-supplier contract enforceability. !#o main concepts must be considered #hen considering observability as it related to quality ris/s in outsourcing" the concepts of testability and criticality. !estability, in the conte t of quality ris/ in outsourcing a product or service, refers to a product1s or service1s coverage, or the ease of inspecting every single unit. !estability also refers to a product1s or service1s thoroughness, or the ease of inspecting for single possible defect. !hus, the testability of a product or service is measured by #here it lies on the coverage and thoroughness a es"

Co# !horoughness D Co# 3overage E Products or )ervices #ith Co# !estability 'igh !horoughness D Co# 3overage E 3omplete 2nspections of 0e# Products or )ervices

Co# !horoughness D 'igh 3overage E 2ncomplete 2nspections of .ost Products or )ervices

'igh !horoughness D 'igh 3overage E Products or )ervices #ith 'igh !estability

3riticality, in the conte t of quality ris/ in outsourcing a product or service, refers to the potential negative impact of a quality defect - the higher the criticality of a product or

Recruitment Process Outsourcing service the higher the potential negative impact. !he quality ris/ in outsourcing a product or service can thus be summed as a function of its testability and criticality"

Co# !estability D Co# 3riticality E 'igh probability of minor defects 'igh !estability D Co# 3riticality E Co#est Buality Ris/ 'igh !estability D 'igh 3riticality E Co# Probability of 3ritical >efects Co# !estability D 'igh 3riticality E 'ighest Buality Ris/

Buality fade is the deliberate and secretive reduction in the quality of labor in order to #iden profit margins. !he do#n#ard changes in human capital are subtle but progressive, and usually unnoticeable by the out sourcer;customer. !he initial intervie# meets requirements, ho#ever, #ith subsequent support, more and more of the support team are replaced #ith novice or less e perienced #or/ers. 2ndia 2! shops #ill continue to reduce the quality of human capital, under the pressure of drying up labor supply and up#ard trend of salary, pushing the quality limits. )uch practices are hard to detect, as customers may just simply give up see/ing help from the help des/. 'o#ever, the overall customer satisfaction #ill be reduced greatly over time. <nless the company constantly conducts customer satisfaction surveys, they may eventually be caught in a surprise of customer churn, and #hen they find out the root cause, it could be too late. 2n such cases, it can be hard to dispute the legal contract #ith the 2ndia outsourcing company, as their

Recruitment Process Outsourcing staff are no# trained in the process and the original staff made redundant. 2n the end, the company that outsources is #orse off than before it outsourced its #or/force to 2ndia. Public opinion !here is a strong public opinion regarding outsourcing 7especially #hen combined #ith off shoring8 that outsourcing damages a local labor mar/et. Outsourcing is the transfer of the delivery of services #hich affects both jobs and individuals. 2t is difficult to dispute that outsourcing has a detrimental effect on individuals #ho face job disruption and employment insecurityF ho#ever, its supporters believe that outsourcing should bring do#n prices, providing greater economic benefit to all. !here are legal protections in the European <nion regulations called the !ransfer of <nderta/ings 7Protection of Employment8. Cabor la#s in the <nited )tates are not as protective as those in the European <nion. On Gune *H *559, Geff 2mmelt, the 3EO of Ieneral Electric, called for the <nited )tates to increase its manufacturing base employment to *56 of the #or/force commenting that the <.). has outsourced too much and can no longer rely on consumer spending to drive demand. 8anguage s!ills 2n the area of call centers end-user-e perience is deemed to be of lo#er quality #hen a service is outsourced. !his is e acerbated #hen outsourcing is combined #ith offshoring to regions #here the first language and culture are different. !he questionable quality is

Recruitment Process Outsourcing

particularly evident #hen call centers that service the public are outsourced and off shored. !here are a number of the public #ho find the linguistic features such as accents, #ord use and phraseology different #hich may ma/e call center agents difficult to understand. !he visual clues that are present in face-to-face encounters are missing from the call center interactions and this also may lead to misunderstandings and difficulties. Social responsibilit% Outsourcing sends jobs to the lo#er-income areas #here #or/ is being outsourced to, #hich provides jobs in these areas and has a net equalizing effect on the overall distribution of #ealth. )ome argue that the outsourcing of jobs 7particularly off-shore8 e ploits the lo#er paid #or/ers. ( contrary vie# is that more people are employed and benefit from paid #or/. On the issue of high-s/illed labor, such as computer programming, some argue that it is unfair to both the local and off-shore programmers to outsource the #or/ simply because the foreign pay rate is lo#er. On the other hand, one can argue that paying the higherrate for local programmers is #asteful, or charity, or simply overpayment. 2f the end goal of buyers is to pay less for #hat they buy, and for sellers it is to get a higher price for #hat they sell, there is nothing automatically unethical about choosing the cheaper of t#o products, services, or employees.

Recruitment Process Outsourcing

7ualit% of service Buality of service is measured through a service level agreement 7)C(8 in the outsourcing contract. 2n poorly defined contracts there is no measure of quality or )C( defined. Even #hen an )C( e ists it may not be to the same level as previously enjoyed. !his may be due to the process of implementing proper objective measurement and reporting #hich is being done for the first time. 2t may also be lo#er quality through design to match the lo#er price. !here are a number of sta/eholders #ho are affected and there is no single vie# of quality. !he 3EO may vie# the lo#er quality acceptable to meet the business needs at the right price. !he retained management team may vie# quality as slipping compared to #hat they previously achieved. !he end consumer of the service may also receive a change in service that is #ithin agreed )C(s but is still perceived as inadequate. !he supplier may vie# quality in purely meeting the defined )C(s regardless of perception or ability to do better. Buality in terms of end-user-e perience is best measured through customer satisfaction questionnaires #hich are professionally designed to capture an unbiased vie# of quality. )urveys can be one of research. !his allo#s quality to be trac/ed over time and also for corrective action to be identified and ta/en. Staff turnover

Recruitment Process Outsourcing

!he staff turnover of employee #ho originally transferred to the outsourcer is a concern for many companies. !urnover is higher under an outsourcer and /ey company s/ills may be lost #ith retention outside of the control of the company. 2n outsourcing offshore there is an issue of staff turnover in the outsourcer companies call centers. 2t is quite normal for such companies to replace its entire #or/force each year in a call center. !his inhibits the build-up of employee /no#ledge and /eeps quality at a lo# level. .ompan% !no(ledge Outsourcing could lead to communication problems #ith transferred employees. 0or e ample, before transfer staff have access to broadcast company e-mail informing them of ne# products, procedures etc. Once in the outsourcing organization the same access may not be available. (lso to reduce costs, some outsource employees may not have access to e-mail, but any information #hich is ne# is delivered in team meetings. 7ualifications of outsourcers !he outsourcer may replace staff #ith less qualified people or #ith people #ith different non-equivalent qualifications. 2n the engineering discipline there has been a debate about the number of engineers being produced by the major economies of the <nited )tates, 2ndia and 3hina. !he

Recruitment Process Outsourcing argument centers around the definition of an engineering graduate and also disputed numbers. !he

closest comparable numbers of annual graduates of four-year degrees are <nited )tates 7%+A,,+A8 2ndia 7%%*,5558 and 3hina 7+-%,-+A8. /ailure to deliver business transformation =usiness transformation has traditionally been promised by outsourcing suppliers, but they have usually failed to deliver. 2n a commoditised mar/et #here any half-decent service provider can do things cheaper and faster, smart vendors have promised a second #ave of benefits that #ill improve the client1s business outcomes. (ccording to Jinay 3outo of =ooz @ 3ompany K3lients al#ays use the service provider1s ability to achieve transformation as a /ey selection criterion. 2t1s al#ays in the top three and sometimes number one.L Often vendors have promised transformation on the basis of #ider domain e pertise that they didn1t really have, though 3outo also says that this is often do#n to client1s un#illingness to invest in transformation once an outsourcing contract is in place.M 9or!" labour" and econom% et labour movements Productivit%

Recruitment Process Outsourcing Offshore outsourcing for the purpose of saving cost can often have a negative influence on the real productivity of a company. Rather than investing in technology to improve productivity, companies gain non-real productivity by hiring fe#er people locally and

outsourcing #or/ to less productive facilities offshore that appear to be more productive simply because the #or/ers are paid less. )ometimes, this can lead to strange contradictions #here #or/ers in a developing country using hand tools can appear to be more productive than a <.). #or/er using advanced computer controlled machine tools, simply because their salary appears to be less in terms of <.). dollars. 2n contrast, increases in real productivity are the result of more productive tools or methods of operating that ma/e it possible for a #or/er to do more #or/. Non-real productivity gains are the result of shifting #or/ to lo#er paid #or/ers, often #ithout regards to real productivity. !he net result of choosing non-real over real productivity gain is that the company falls behind and obsoletes itself overtime rather than ma/ing investments in real productivity. Standpoint of labor 0rom the standpoint of labor #ithin countries on the negative end of outsourcing this may represent a ne# threat, contributing to rampant #or/er insecurity, and reflective of the general process of globalization 7see ?rugman, Paul 7*55H8. $0eeling No Pain.$ New York Times, .arch H, *55H8. &hile the $outsourcing$ process may provide benefits to

Recruitment Process Outsourcing less developed countries or global society as a #hole, in some form and to some degree include rising #ages or increasing standards of living - these benefits are not secure. 0urther, the term outsourcing is also used to describe a process by #hich an internal department, equipment as #ell as personnel, is sold to a service provider, #ho may retain

the #or/force on #orse conditions or discharge them in the short term. !he affected #or/ers thus often feel they are being $sold do#n the river.$ )he :,S, OOutsourcingO became a popular political issue in the <nited )tates during the *55, <.). presidential election. !he political debate centered on outsourcingOs consequences for the domestic <.). #or/force. >emocratic <.). presidential candidate Gohn ?erry criticized <.). firms that outsource jobs abroad or that incorporate overseas in ta havens to avoid paying their fair share of <.). ta es during his *55, campaign, calling such firms $=enedict (rnold corporations$. 3riticism of outsourcing, from the perspective of <.). citizens, by-and-large, revolves around the costs associated #ith transferring control of the labor process to an e ternal entity in another country. ( Pogby 2nternational poll conducted in (ugust *55, found that A%6 of (merican voters believed that Koutsourcing jobs overseasL hurt the economy #hile another H*6 believed that the <.). government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased ta es on companies that outsource. One given

Recruitment Process Outsourcing rationale is the e tremely high corporate income ta rate in the <.). relative to other OE3> nations, and the peculiar practice of ta ing revenues earned outside of <.). jurisdiction, a very uncommon practice. 2t is argued that lo#ering the corporate income ta and ending the double-ta ation of foreign-derived revenue 7ta ed once in the nation #here the revenue #as raised, and once from the <.).8 #ill alleviate corporate

outsourcing and ma/e the <.). more attractive to foreign companies. )arbanes-O ley has also been cited as a factor for corporate flight from <.). jurisdiction. Policy solutions to outsourcing are also criticized. Securit% =efore outsourcing an organization is responsible for the actions of all their staff and liable for their actions. &hen these same people are transferred to an outsourcer they may not change des/ but their legal status has changed. !hey no-longer are directly employed or responsible to the organization. !his causes legal, security and compliance issues that need to be addressed through the contract bet#een the client and the suppliers. !his is one of the most comple areas of outsourcing and requires a specialist third party adviser. 0raud is a specific security issue that is criminal activity #hether it is by employees or the supplier staff. 'o#ever, it can be disputed that the fraud is more li/ely #hen

Recruitment Process Outsourcing outsourcers are involved, for e ample credit card theft #hen there is scope for fraud by credit card cloning. 2n (pril *55-, a high-profile case involving the theft of Q+-5,555 from four 3itiban/ customers occurred #hen call center #or/ers acquired the pass#ords to customer accounts and transferred the money to their o#n accounts opened under fictitious names. 3itiban/ did not find out about the problem until the (merican customers noticed discrepancies #ith their accounts and notified the ban/.

$valuating Recruitment $ffectiveness

!he )P'R provides leadership in evaluating the efficiency and effectiveness of recruitment activities. Efficiency evaluation is largely operational in nature, #hereas effectiveness evaluation is strategic. <nfortunately, organizations tend to do a rather good job at developing efficiency metrics, but a poor job of developing effectiveness measures. !he efficiency metrics provide information regarding the accomplishments of short-term objectives. 'o#ever, the critical issue is the long-term strategic impact of recruitment activities on the success of the organization 7effectiveness metrics8. !ypical efficiency metrics are as follo#s"

7uantit% of applications !his is a gross measure of the effect of recruitment activities #ith the philosophy that the more applications an organizations gets,

Recruitment Process Outsourcing the more li/ely it is to fill its openings #ith highly qualified individuals. Buantities can be evaluated by source, giving a gross estimate of the costeffectiveness of television versus ne#spaper advertising, for e ample.

7ualit% of applications Organizations might #ant to evaluate the percentage of applications that #ere considered qualified for the job or that #ere actually offered an intervie#. (gain, this is a gross measure of the impact of the recruitment program and can be analyzed by the source of the application.

)ime to fill .ost organizations evaluate the time it ta/es to fill a position, typically in terms of the number of days from the date the request is received in the 'R department until ne# employee actually reports onboard. !hese data are then compared against goals, historical averages, and benchmar/s to evaluate recruitment efficiency.

;ield rates Rield rates #ere discussed earlier in this chapter. Recruitment is often evaluated in terms of yield rates from one stage of the process to another. 0or e ample, the organization needs to /no# #hat percentage of applicants #ere actually considered to be qualified for the job, #hat percentage that #ere qualified passed the initial screening, #hat percentage passing the initial screening also passed the pre-employment tests, #hat percentage passing the preemployment test #ere offered in-person intervie#s, and so forth. !his provides

Recruitment Process Outsourcing an additional measure of efficiency in that higher yield ratios reduce #asted staff effort and produce more viable candidates for the organization to consider.

.ost per hire .any organizations trac/ the average cost to hire employees, typically by dividing all recruitment-related e penses by the number of actual hires. !he measure provides an indication of the efficiency of the recruitment program in terms of costs, but yields little information regarding effectiveness. (lso, the calculation of recruitment costs is often difficult.

Selection rates )election rate provide some indication of efficiency because they evaluate the number of ne# hires against the total number of applicants. 0or

e ample, if -5 hires #ere made from an application pool of %55, the selection rate is -56. 'o#ever, one cannot really necessarily evaluate that metric in terms of effectiveness. Presumably, the higher the selection rate, the more efficient and effective recruitment process. =ut are selections being made using the $any #arm body$ philosophy because positions must be filled #ith any applicant that is minimally qualifiedS )election rates along #ith other measures of efficiency do not give the organization any indication of the actual performance of an individual after being hired, nor do they tell the organization anything about employee retention.

Recruitment Process Outsourcing

&cceptance rates )ome organizations trac/ selection rates, #hich are typically evaluated as the number of applicants that accept the position divided by the number of applicants that #ere offered the position. !he higher the ratio, the more efficient the recruitment program is considered to be. 'o#ever, acceptance rates can be significantly affected by outside influences that have nothing to do #ith the quality of recruitment efforts. 0or e ample, acceptance rates could be e pected to be appreciably higher during periods of high unemployment. !his metric is frequently used to evaluate both individual recruiter and recruitment sources. &hen evaluating individual recruiters, the interest is in ho# effective the recruiter is in actually convincing the applicant to accept the job.

!his might be a critical issue, especially #ith higher-level jobs #here the costs of recruiting are substantial. !he organization is also interested in /no#ing #hether the acceptance rate differs among the various recruitment methods so that it can adjust its strategies. Effectiveness measures are those that evaluate the long-term strategic impact of the recruitment program.$'uman Resource >evelopment,$ in the conte t of evaluation of training and development there is often an inverse relationship bet#een the value of data and analysis and its difficulty. 'o#ever, this is the value added by the )P'R. !he )P'R

Recruitment Process Outsourcing must develop metrics that strategically evaluate recruitment efforts in terms of their impact on organizational effectiveness and strategic success. (n effectiveness measure frequently overloo/ed is that of customer satisfaction #ith the recruitment process and results. 2n this case, customers can be defined in a number of #ays. 0irst, management satisfaction should be evaluated. .anagers should be questioned as to their overall satisfaction #ith the recruitment process and the timeliness of actions and the quality of recruits in particular. =ecause managers at different levels often have different e pectations, satisfaction should be surveyed at multiple levels in the organization. !he second, and probably more important, customer group is the actual recruits themselves. !his includes both those #ho #ere hired and those #ho #ere rejected for employment. !hey should be questioned about their perspectives regarding the various stages of the recruitment and selection process. !hese data often provide

valuable information regarding recruitment effectiveness and identify areas that might need improvement. !he effectiveness of recruitment efforts should be evaluated in terms of eventual employee performance and retention. !herefore, the )P'R should lead the 'R function in engaging in longitudinal studies in these areas. 2n the press of current requirements historical research is often ignored. Ret these data are the ones that allo# the organization to fine-tune current operations. Organizations that have effective

Recruitment Process Outsourcing recruitment evaluation programs periodically 7usually yearly8 evaluate a sample of hires from previous years, correlating retention, promotion rates, and performance data #ith recruitment sources, selection tests, and other employment practices. Evaluation of individual recruiters can also be done using the same process. !hese data provide rich information as to the long-term effectiveness of recruitment programs. !he potential value of these types of evaluations is, ho#ever, moderated by the nature of the organizational environment and the organizational strategies. !hese data have the greatest impact in planning and engaging in activities to improve the recruitment program #hen the environment is relatively stable.

Recruitment Process *utsourcing

Recruitment Process *utsourcing 7RPO8 is a form of business process outsourcing 7=PO8 #here an employer outsourcers or transfers all or part of its recruitment activities to an e ternal service provider. !he Recruitment Process Outsourcing (ssociation defines RPO as follo#s" $#hen a provider acts as a companyOs internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting;hiring process from job profiling through the

Recruitment Process Outsourcing on-boarding of the ne# hire, including staff, technology, method and reporting. ( properly managed RPO #ill improve a companyOs time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance.L !he RPO (lliance, a group of the 'uman Resources Outsourcing (ssociation 7'RO(8, approved this definition in 0ebruary *559" $Recruitment Process Outsourcing 7RPO8 is a form of business process outsourcing 7=PO8 #here an employer transfers all or part of its recruitment processes to an e ternal service provider. (n RPO provider can provide its o#n or may assume the companyOs staff, technology, methodologies and reporting. 2n all cases, RPO differs greatly from providers such as staffing companies and contingent;retained search providers in that it assumes o#nership of the design and management of the recruitment process and the responsibility of results.$ Occasional recruitment support, for e ample temporary, contingency and e ecutive search services is more analogous to out-tas/ing, co-sourcing or just sourcing. 2n this

e ample the service provider is $a$ source for certain types of recruitment activity.!he biggest distinction bet#een RPO and other types of staffing is Process. 2n RPO the service provider assumes o#nership of the process, #hile in other types of staffing the service provider is part of a process controlled by the organization buying their services.

Histor%

Recruitment Process Outsourcing &hile temporary, contingency and e ecutive search firms have provided staffing services for many decades, the concept of an employer outsourcing the management and o#nership of part or all of their recruiting process #asnOt first realized on a consistent basis until the %9A5s in )ilicon JalleyOs highly competitive high tech labor mar/et. 0astgro#ing high tech companies #ere hard-pressed to locate and hire the technical specialists they required, and so had little choice but to pay large fees to highly specialized e ternal recruiters in order to staff their projects. Over time, companies began to e amine ho# they might reduce the gro#ing e penses of recruitment fees #hile still hiring hard-to-find technical specialists. !o#ard this end, companies began to e amine the various steps in the recruiting process #ith an eye to#ard outsourcing only those portions that they had the greatest difficulty #ith and that added the greatest value to them. 2nitial RPO programs typically consisted of companies purchasing lists of potential candidates from RPO vendors. !his $search;research$ function, as it #as called, generated names of competitorsO employees for a company and served to augment the pool of potential candidates from #hich that company could hire.

Over time, as business in general embraced the concept of outsourcing more and more, RPO gained favor among 'uman Resource management" not only did RPO reduce overhead costs from their budgets but it also helped improve the companyOs competitive advantage in the labor mar/et. (s labor mar/ets became more and more competitive, RPO became more of an acceptable option. 0urthermore, through the advent in the

Recruitment Process Outsourcing %9:5Os and %995Os of human resources outsourcing 7'RO8 companies that began ta/ing on the processes associated #ith benefits, ta es, and payroll, companies began recognizing that recruiting--a significant cost of 'R--should also be considered for outsourcing. 2n the early *555Os more companies began considering the outsourcing of recruitment for major portions of their recruiting need. !here have been fundamental changes in the <) labor mar/et that serve to reinforce the use of RPO as #ell. !he labor mar/et has become increasingly dynamic" #or/ers today change employers more often than in previous generations. >e-regulated labor mar/ets have also created a shift to#ards contract and part-time labor and shorter #or/ tenures. !hese trends increase recruitment activity and may encourage the use of RPO. 2t should also be noted that even in slo#er economic times or higher unemployment, RPO is still considered by companies to assist in an increasing need to screen through a larger candidate pool.

0enefits RPOOs promoters claim that the solution offers improvement in quality, cost, service and speed.

RPO providers claim that leveraging economies of scale enables them to offer recruitment processes at lo#er cost #hile economies of scope allo# them to operate as high-quality specialists. !hose economies of scale and scope arise from a larger staff of

Recruitment Process Outsourcing recruiters, databases of candidate resumes, and investment in recruitment tools and net#or/s. RPO solutions are also claimed to change fi ed investment costs into variable costs that vary #ith fluctuation in recruitment activity. 3ompanies may pay by transaction rather than by staff member, thus avoiding under-utilization or forcing costly layoffs of recruitment staff #hen activity is lo#.

Problems 2f a company failed to define its overall recruitment strategy and hiring objectives, then any recruiting program may fail to meet the companyOs needs. !his is especially true for outsourced programs li/e RPO" RPO can only succeed in the conte t of a #ell-defined corporate and staffing strategy. (s #ith any program, a company must manage its RPO activities. ( company must provide initial direction and continued monitoring to assure the desired results. Overall, providing guidance to e ternal activities can present a significant management challenge. Outsourcing of company processes may fail or prove a poor organizational fit. 2mproperly implemented RPO could reduce the effectiveness of recruitment. !he costs charged for outsourced recruitment transactions may total more than the cost of the internal recruitment department.

RPO service providers may fail to provide the quality or volume of staff required by their customers.

Recruitment Process Outsourcing Placing all recruitment in the hands of a single outside provider may discourage the competition that #ould arise if multiple recruitment agencies #ere used. (n RPO solution may not #or/ if the companyOs e isting recruitment processes are performing poorly. (n RPO solution may not #or/ if the service provider has inadequate recruitment processes or procedures to #or/ #ith the client. RPO may not resolve difficulties that organizations have hiring staff #hen the organization is perceived negatively by potential employees. !his #ill instead require improved branding and an adjustment of image. !he perception is that very fe# RPOs can successfully integrate their clientOs brand and therefore do not represent their clientOs brand as #ell as a retained search or internal recruiting resource may drive brand representation and or mar/eting. 0urther, most RPOs perform their staffing functions and service offsite, further disconnecting the clientOs gro#th @ recruiting strategy from the actual #or/force #ithin the client company. !his is important because during a period of rapid recruitment gro#th, one of the many positive effects that a company typically enjoys is an increase in the #or/force #ellness or an overall #or/force positivity of sentiment of optimism that comes #ith personnel additions... this may be lessened #ith an offsite recruiting function. Organizations #ith efficient hiring process that are vie#ed as employers of choice by potential staff may stand to gain negligible benefits from RPO.