How does an organisation determine whether or not to outsource its recruitment?
In general, this comes down to a perception of value for money. Is outsourcing to a recruitment agency and paying for their service better value for money than performing the recruitment service in-house?
At Slater Austin, we agree that cost is a key factor, but not the only one. We argue that value is determined by a range of factors. In this article we uncover five more factors to consider, and provide a decision-making framework for each organisation to determine the answer to this question.
The value of time
How critical is time in both fulfilling the recruitment and in terms of effort expended?
Experience shows that the average time taken to fulfil a senior managerial / c-suite position from decision to recruit is up to 66 days. This is 66 days of searching, sourcing, screening, juggling interviews, negotiating packages and getting that all-important offer accepted.
This first question may therefore be answered mathematically. What is the cost of internal time spent per recruit and how does this compare to an outsourced solution?
The value of a full 360 recruitment process
How do your internal processes compare to those of your chosen recruitment provider?
The likelihood is that the more junior the position within the structure of the organisation, the more you can recruit against standard job specifications and job postings. Internal recruitment solutions, (if you are finding successful candidates in the current marketplace), will likely work well for operative, administrative and junior positions.
However, the more senior the position, the smaller the talent pool generally becomes, and the more you need to widen your search and extend the recruitment process.
Having full process support, including specialist assessments, critical applicant evaluation, and offer negotiation, will inevitably lead to a better recruitment outcome.
At Slater Austin, we have a full process suite to select from, from specification writing to offer negotiation.
The value of a candidate pool and industry sector network
We discussed the cost of time in the first question, but what if the timescale can be shortened? If the position being recruited is currently unfilled, the need to plug the gap may generally be considered as quite urgent.
An outsourced recruitment provider with access to a wide talent pool of current and active candidates, may well be able to realise a shorter time to fill each position, as candidates may be screened, interviewed, assessed and evaluated immediately.
Moreover, even if they do not have candidates to hand, they are likely to be able to reach out quickly to their industry sector contacts to find suitable early candidates.
This argument is further reinforced, where the recruitment partner also offers an interim management service. Consider how much an interim manager may add value, whilst you take for the time to find the perfect candidate, rather than select the best early candidate due to urgency.
Slater Austin’s Placement division only covers the supply chain sector, but does so with great depth, insight and knowledge, provided by its Consultancy and Training divisions. The Placement division provides permanent, interim and project management resource solutions.
The value of specialism
How much value does the organisation place on specialism when looking for a recruitment partner?
This is a fundamental question. We are often surprised at Slater Austin as to how few employers consider this element when outsourcing their recruitment. We argue that too many generalists are involved in recruitment, offering solutions across all positions within the organisation.
The best recruitment partners will be experts in their industry sector, and as such will be able to advise on key elements of skills, competencies, qualifications, salaries and benefits, and competition within that sector. They will have an instant ability to benchmark the organisation’s offer to potential candidates.
Slater Austin are supply chain experts. We know our industry, the skills required, the packages to apply, and how to help organisations build supply chains that outperform the competition.
The ability to add more value
This may only occasionally be relevant, but nevertheless a good point to consider. Can the outsourced recruitment provider add further value?
At Slater Austin, we offer supply chain consultancy and training services alongside our recruitment division. This means that we can also solve the problem of an unfilled position in more ways than one.
Our free services include a talent review. This provides a benchmarked current state and a roadmap for how to develop supply chain skills within the organisation over time, to a desired position.
The desire to share the burden of risk
Is the chosen recruitment provider prepared to share in the risk of a successful placement, or will they purely take the upside of the fee for placement?
This is an important question if you plan to have a commercial relationship with your recruitment provider based on partnership over time. In a transactional relationship, the organisation may well be prepared to accept the terms asked for by the training provider for one-off services.
Invariably this is always a double-digit percentage of the salary package, and invariably the best you will receive is a rebate if the new recruit does not last the probationary period.
At Slater Austin, we base our fees on the effort require by our team. If you do not require the full 360 recruitment process, then our fee is only a single-digit percentage of the salary package.
We also believe that the recruitment partner should share the burden of finding the right candidate, and the right candidate is one who stays with you. Examining cultural and values alignment secures greater longevity in post.
We therefore split our fee on acceptance of placement and on successfully completing the probationary period. We are then incentivised to do a thorough recruitment process.
A Framework for decision-making: insourcing or outsourcing your recruitment?
The following framework should be used against each position that you are recruiting for. You can weight each section and rank your recruitment provider against your internal solution.
The more the recruitment agency can offer value, according to the important factors to consider in each recruitment, the more you should consider outsourcing. At Slater Austin, we recognise that this will be different for each organisation.
Slater Austin works with various organisations. When a business has a vacancy to fill, Slater Austin can fulfil it immediately from its network of skilled supply chain experts.
Want to know more? Submit an enquiry or arrange a call with our placement team here.