Will Your In-House Recruiting Be Outsourced?

ABC, Inc.’s three recruiters are overwhelmed with requisitions. At the end of last week, they had more than 150 open positions to fill, many of them requiring hard-to-find candidates. Most of these requisitions had been open for more than two weeks, and hiring managers are upset. Most of the managers have not seen any candidates, and the few who have want to see more. At this week’s staff meeting, Peter, the director of staffing, announced that the VP of HR, his boss, was considering outsourcing a large portion of the recruiting function.

The reasons are obvious: a perception by hiring managers of poor quality candidates and long delays in presenting candidates. His two recruiters and most of the HR team were not pleased with this decision and felt that they understood the company and its needs better than any agency. They also felt that hiring managers were unrealistic in their expectations and that they were a bargain compared to the costs of outsourcing. This situation is increasingly common. I find that many organizations are turning to outsourcing as a solution to either the problem of too many requisitions and too few recruiters, or to that of too many hard-to-fill positions and no talent pool or legitimate candidate sources.

There’s nothing wrong with outsourcing the recruiting function (I’m on the board of the Recruitment Process Outsourcing Association), and many organizations have done so with great success. Kellogg’s has outsourced recruiting for a number of years and has been pleased with the results. Some organizations have outsourced recruiting for one or two functions only, and leave the internal recruiters to do the rest. Given the scarcity of many types of talent, more organizations are turning to outsourcing as a last resort. Historically, there have been few options available to organizations, outside of keeping an internal recruiting function. Most agencies cannot (and don’t want to) recruit for all positions. They tend to focus on a market segment or a particular function and do less well at recruiting outside that. They are also expensive. But with the rise of recruitment process outsourcing organizations and the creation of broadly-skilled and capable agencies, there are a variety of choices. However, if your goal is to not be outsourced, here are a few things that you will have to do to remain successful.

Know What You Offer That Is Unique

What makes you better than a recruiter at an agency? What do you know and do that is unique or different enough to be difficult for an outside recruiter to reproduce or learn? Perhaps your recruiters have in-depth knowledge of the services or products you sell and can use that knowledge to better evaluate potential candidates and to sell the organization to these candidates. Or, maybe your team has the capability to evaluate both internal and external candidates together and make more useful recommendations. Whatever it is, you need to be very aware of it and communicate that uniqueness to everyone. If managers feel that you are a commodity, then anyone can do your job as well as you can. It is your responsibility to communicate your unique contributions in any way that you can. This includes face-to-face conversations, discussions, email, or whatever else can help hiring managers understand you better.

Learn to Build Internal Relationships

Most of the time internal functions are outsourced because hiring managers or senior managers are unhappy with the speed with which candidates are presented, or with candidate quality. They also believe that an external group can provide faster and better service. The only solution to these issues is to have built good relationships with the management team. Managers have to believe that you are not only well-qualified and capable, but also that you are trustworthy and deeply understand their needs. You can only attain that trust by, over time, getting to know these managers and letting them know you. You will need to spend time educating them about the talent pipeline and your sourcing activities, and you will need to present them with believable and quantified data when their expectations are unrealistic. I have found that in recruiting functions where the recruiters are physically close to the hiring managers and who spend time with those managers on an almost daily basis, there is no talk of outsourcing.

Suggest Outsourcing When it Is Appropriate

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Sometimes, it makes a lot of sense to outsource some part of the recruiting function. This happens when there are large numbers to recruit and you have a limited staff, or when there are just a few very open positions that require hard-to-find skills. When these are the case, it is better if the proactive suggestion to outsource comes from the recruiting team and is supported with data, numbers, and facts to show the savings and to show why quality will not decrease.

Improve Your Recruiting Processes

Do you know that recruiting remains one of the least efficient processes in an organization? Transaction costs (cost per hire) are large, and there is almost no effort being made to connect that cost with delivering value (quality of hire). At conference after conference, I hear the same old measures being touted proudly: cost per hire, time to fill, number of interviews to offer, and so forth. It seems like no one is measuring the effects of our recruiting activities. Senior executives are starting to ask what value we are delivering to them, and sadly, few of us have any answers. You need to establish some time and cost reduction goals (once you have clearly determined what your current numbers are), and then set out to achieve them as quickly as possible. At the same time, you should be open about what you are doing and why, and be accountable for the results. Let hiring managers know that you are working hard to bring in better candidates and enlist their help to do so. They can be great allies once they are part of the team and understand how what they do affects what you do.

As mentioned above, the relationship between the recruiter and the hiring authority is the most important factor in the success equation. Your goal should be to be seen as contributing to the success of the organization. By acting openly, getting data and facts to support your arguments, improving your recruiting process in a systematic way, and accepting accountability for your results, you should be able to remain productively employed for a long time to come.

Kevin Wheeler is a globally known speaker, author, futurist, and consultant in talent management, human capital acquisition and learning & development. He has founded a number of organizations including the Future of Talent Institute, Global Learning Resources, Inc. and the Australasian Talent Conference, Ltd. He hosts Future of Talent Retreats in the U.S., Europe, and Australia. He writes frequently on LinkedIn, is a columnist for ERE.net, keynotes, and speaks at conferences and events globally, and advises firms on talent strategy. He has authored two books and hundreds of articles and white papers. He has a new book on recruiting that will be out in late summer of 2016. Prior to his current work, he had a 20+year corporate career in several San Francisco area tech and financial service firms. He has also been on the faculty of San Francisco State University and the University of San Francisco. He can be reached at kwheeler@futureoftalent.org.

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4 Comments on “Will Your In-House Recruiting Be Outsourced?

  1. Kevin,

    I have been in this business for 15 years and have found that a combination of the 2 is what will work in today’s environment. HR partnering is crucial, so is the interaction with hiring managers. Setting standards and procedures is the #1 priority for a Recruiter, after performing a needs assessment and educating the client. Strict compliance and adherence is only possible if the Recruiter takes the responsiblity of initiating decision making.

    45 days to hire is a long time, almost as long as it takes to sell a home. 3 weeks should be the maximum time to hire. Nothing should allow the ideal candidate to slip through the cracks because finding a replacement is a frustrating process whereby the Recruiter loses credibility.

    I advocate taking control and only working with clients who comply with your process. Sending resumes to companies that do not comply with your method of doing business does not make sense.

  2. There is also a cost effective alternative available now for Corporate Recruiters/Managers. There are companies that can add a virtual offshore recruiter or Internet researcher to your team.
    Some advantages of this approach
    – You retain control within the organization
    – Costs far less than using an agency
    – They function as part of your team

    There may be some minimum committment period – should be similar to hiring a contract recruiter here

    Caveat: This is a new area so most of the offshore companies would not be very established names. Look for companies that promise quality and not just cost advantage. Understand their SLAs. Managing offshore recruiters is a headache so make sure you don’t get burdened with that. Talk to a few of their recruiters. Comm skills may be a big problem when considering offshore recruiters

  3. Hello,

    I am an internal recruiter, but I started my career as an external with a staffing firm. I am a huge advocate of using firms for those tough to fill positions. Having been on both sides, I see the need for both options. Relying solely on external firms however, is not always the best way to go for several reasons. Internal recruiters not only need to make the placement and please managers, but they have to consider key factors like career development/growth opps vs the candidates needs, and of course succession planning comes into play. External firms have only a rep to protect and need to retain the client, however they are not concerned for the long-term. They also have access to the candidate for the remainder of their career, and beleive me from experience – they will place that candidate somewhere else when a better opportnuity arises. I also feel strongly that an external recruiter need only work thru the HR dept or with internal recruiters. I see too many head-hunters cut corners and go directly to Hiring Mgrs. This will not fly in a big corp., all it does is cause confusion, and damage relationships between HR and Hiring Mgrs. The best way for an external recruiter to retain a client is to make initial contacts with Hiring Managers, and then follow through with HR.

  4. 1. Recruiting should NEVER be part of HR. Recruiting, if anything, should be tied to business development. HR deals with managing existing employees. Recruiting deals with finding new talent. The two are not related, either in concept or practice, and combining the two often leads to conflict.

    2. You say you are a former agency recruiter, so why would you advocate outside recruiters dealing with HR, or even worse, the internal corporate recruiting staff? Do your hiring managers really need you to interpret who is a good candidate for them? When I do agency side placements, I don’t waste time with companies that make me go through HR. I’ve had too many internal HR people try and pull something like ‘this guy applied to us back in 1997, so we can’t pay you a fee’ after we’ve made the effort to search out the candidate, interveiw them and work them through the offer process. If he was in your database, why didn’t you find him on your own?

    3. If you are a corporate recruiter, especially a contract recruiter, and you need an agency to fill your jobs, how does your conscience allow you to cash your paycheck? Ok, there are a couple scenarios where you might need help. Maybe you have 20 open reqs for senior sales people, or your company doesn’t give you any tools or resources to work with, or you need to fill a position in less than 10 days, but it amazes me how many well funded internal recruiters sit back and watch outside agencies take money from their company because they aren’t aggressive enough to fill jobs on their own. When I work contracts, I’d sooner fall on my sword than let a position be filled by an agency. I guess it’s a matter of pride.

    4. Lastly, putting internal HR or recruiting staff in charge of managing outside agencies sets up a situation that encourages bribes and kickbacks. Agencies make a lot of money on a per placement basis and there are people want some of that action. Requests are usually small like asking for dinner or ballgame tickets. These we don’t mind if they fit within normal policies and practice, but sometimes we get blatant requests for cash like ‘I’ll make sure your company gets X number of fills a month if you’ll pay me $xxx per fill.’ We just tell them to piss off. If we can’t do business without bribes, we write that company off until the offender moves somewhere else.

    Funny thing – I have never had a hiring manager ask for anything other than for us to get them the best possible candidate as quickly as possible.

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