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GROUNDHOG
DAY
The business case for
recruitment process outsourcing
Tim Meehan
MANY FIRMS STRUGGLE
TO FIND TOP TALENT.
THIS ISNT A NEW
PROBLEM, BUT SOLVING
IT CAN BE AN ENIGMA.
The inventor Charles Kettering once said, a problem well stated is half solved,
so heres how we define the problem.
Sound familiar?
Given that business-planning cycles are now much shorter and more likely
to change, organizations need a far more agile talent acquisition model to
keep pace.
Start by grouping your investments into strategic and operational. Strategic might include employer branding,
workforce planning, mobility, HRIS, regulatory, talent communities, and digital, just to name a few. Operational
includes investments directly supporting a hiring transaction such as job postings, sourcing, screening, logistics,
recruiters, recruiting managers, hard-to-fill escalation tools, and on-boarding.
These strategic and operational resources are combined and represented in the dark charcoal line in figure 1.
TIME
The structural challenge Talent Acquisition faces with this planning approach is reflected in the purple line in
figure 2. The line shows how actual requisition demand often doesnt come in a nice smooth line like planned.
Economic conditions, site expansions, mergers, or competitive activity all affect hiring and thus the demand for
Talent Acquisition resources. The result is periods of imbalance, or disequilibrium, between requisition demand
and the supply of recruiting resources.
Recruitment Resources
Requisitions
QUANTITY
TIME
The light blue line in figure 3 shows how talent acquisition departments often use supplementary resources such as
contract recruiters, borrowed resources, and agencies to respond during peak periods.
Note how the light blue line never quite syncs up with the purple line. This reflects a lag between requisition demand
and the supply of operational recruiting resources. The lags during growth or peak demand cycles are caused by
the time to onboard, and make productive recruiting, borrowed, or agency resources. It is further exacerbated by
leaderships own inability to find and train resources because they are themselves most busy dealing with unplanned
hiring volumes. The lags during decline or valley cycles are caused by the hesitation to release these resources once
the volume drops, since they worked so hard to add them.
Requisitions
Supplemental Resources
QUANTITY
TIME
The yellow areas in figure 4 reflect periods when demand for Cycle times increase because experienced resources are diverted
recruitment services exceeds the supply of available recruitment to training roles. Next, candidate quality declines as new resources
resources. During these periods, talent acquisition managers engage and take time to be effective. Combined, cycle times
experience a range of obstacles that result in reduced KPI increase and quality of candidates decrease. By now, hiring manager
performance and higher costs. satisfaction has declined so Talent Acquisition is focused on filling
requisitions, not strategy. Unfortunately employment brand is
During periods of peak demand, recruiters have more requisitions impacted as job seekers encounter undertrained recruiters and
than they can reasonably support. Leadership must divert resources slow hiring processes. Finally, and most costly, contingent search
to recruit and train supplementary recruiters, borrowed resources, fees increase.
and agencies so they can recruit the talent. In effect, Talent
Acquisition leadership must go backwards to go forwards. Counted together, these outcomes can greatly reduce Talent
This negatively impacts the business in many ways. Acquisition productivity and cost effectiveness and thus business
performance.
Requisitions
Supplemental Resources
QUANTITY
TIME
The red areas in figure 5 reflect the periods of time when Talent Another less obvious cost is the increased cost of quality. While
Acquisition leadership has more resources than requisition demand KPIs improve during valleys, its typically because the organization
warrants. This is caused by a hesitancy to release recruiting is over-resourced. Thus they are spending too much to deliver an
resources and agencies until they are certain demand has subsided. acceptable quality of service.
These requisition valleys result in a range of cost and
quality implications. Finally, if the valley is deep or long, than Talent Acquisition
leadership must in the costs associated with downsizing. The
The first and most obvious cost is contract recruiters and pending most obvious one is severance to right size teams, but perhaps
agency fees for candidates already in process. But whats important to even greater is the impact on team morale. Watching team
understand isnt their total cost, because they were supporting a real members and friends, who helped the organization survive a peak,
business need. Its more important to understand the cost, in lag time, be released, impacts team morale, employee engagement, and
between when requisition volume started to decline and when they ultimately loyalty to the organization.
(and their tools, licenses, systems, etc.) were actually off-boarded.
Recruitment Resources
TOTAL COST OF OWNERSHIP - FIGURE 5
Requisitions
Supplemental Resources
QUANTITY
TIME
The green shaded areas in figure 6 represent the equilibrium periods equilibrium periods to explore their career options elsewhere. Thus,
when Talent Acquisition resources meet the demand for recruitment the team members most needed to support the next peak may not be
services. However, even this period harbors a hidden cost for there further exacerbating the challenge.
employers.
No one wants to repeat the stress-filled disequilibrium
Organizations must deploy solutions that increase agility. Otherwise,
cycles. In fact, they probably expect their leadership to
it will be like Phil Conners, Bill Murrays character in Groundhog Day,
who awoke every day to the same problem over and over again.
deploy solutions that will ensure they dont keep living the
Leadership must take heed to adapt their strategy. If they dont same day over and over again, like Phil Conners, Bill Murrays
integrate agility into their delivery structure, team members will character in Groundhog Day.
not want to repeat the pain of past peaks and valleys and thus use
Requisitions
Supplemental Resources
QUANTITY
TIME
Recruitment Resources
Requisitions
Supplemental Resources
QUANTITY
TIME
Recruitment Resources
Requisitions
Supplemental Resources
QUANTITY
RPO Core
TIME
Recruitment Resources
Requisitions
RPO Core
TIME
Recruitment Resources
Requisitions
RPO Flex
QUANTITY
RPO Core
TIME
1. Review current recruitment practices 4. Consider testing the waters Many RPO
Be honest: how does your firm respond to programs start off focusing on recruitment
unexpected peaks in recruitment demand? Do for one aspect of a business. Engage the
you see them coming? Or are you one phone stakeholders where a critical challenge exists
call away from another Groundhog Day? and determine if a pilot program may be
beneficial. Keep in mind that an RPO program
requires enough volume in the pilot to warrant
2. Tally the costs Look at the cost implications
the assignment of dedicated resources over an
we described in Part 2. How long does it take
extended time. Ideally a pilot with a core team
you to train and make a recruiter productive?
in place would run a minimum of one year.
How many quit before succeeding? Do search
That core team then becomes the gateway
fees increase? Do you keep the recruiters too
to an extended RPO engagement.
long? What about severance costs?
If you are seriously exploring options for outsourcing your recruitment process, KellyOCG
would love to discuss your current state with you and make recommendations on how to get
started. Send a request for consultation to solutions@kellyocg.com or visit kellyocg.com for
more information on our full suite of Talent Supply Chain Management and RPO solutions.
19
About KellyOCG
KellyOCG, the Outsourcing and Consulting Group of workforce solutions provider, Kelly Services, is the
leading global advisor of talent supply chain strategies that enable companies to achieve their business
goals by aligning talent strategy to business strategy. We recognize each clients goals are unique to their
business drivers. Whether your talent requirements are focused on speed, quality, compliance or cost, we
apply supply chain management principles to help companies fully leverage talent across all categories: full-
time employees, temporary employees, freelancers, independent contractors, and service providers, as well
as alternate sources of workers like retirees, alumni, and online talent communities.
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owners. An Equal Opportunity Employer. 2016 Kelly Services, Inc. 16-0067