A recruitment agency can be an elephant

 

“There is an elephant in the room – believes Rebmormax Consulting – and it happens to be the high cost of the room.”

Sam Deuchar, CEO of Rebmormax Consulting, explains that she has, all too often, witnessed the pain that clients go through in trying to manage their recruitment costs. She cites the example of a leading player in the mining industry who spends R130million per annum on recruitment. Even a fraction of a saving on this figure would translate into a massive reduction in costs.

This can be addressed, she says, by setting clients up with a fully functioning internal recruitment offering that focuses specifically on their non-mandated recruitment requirements – with their own infrastructure, systems, procedures and staff. If done properly, the initiative could abdicate the use of up to 70% of an external agency, while the remaining 30% of an external agency is put to more strategic use in focusing on the key elements specific to executive search and change management.

On the face of it, it may seem a contradiction that Rebmormax would advocate this route – but as a consultancy rather than an agency – Rebmormax partners a client, and is bound by a common objective to solve recruitment challenges in the most effective and cost-efficient way possible. And if the best solution, as a consultant, is to set up an internal recruitment function on behalf of a client, then that is what they will recommend.

It may seem like a drastic move and a daunting task, but if it is done according to a set competency framework with established metrics, an effective internal offering could recruit all non-mandated roles.

The same, emphasises Rebmormax Consulting, is not applicable to executive and confidential placements or performance management roles – which require specialised recruitment capabilities.

Three key metrics – time to fill, quality of hire and cost – can be addressed more readily by an internal system.

Firstly, the global average of 60 days to fill a position – from date of requisition to the time the person starts – is more likely to be maintained by an internal offering.

Secondly, quality of hire – measured by post placement incubation – can also be monitored more effectively by an internal source. The hands on internal source is there to measure how quickly people get up to speed in the business, how effective they are in their appointed roles and how long the business is able to retain that person.

Thirdly, the cost saving element in a corporate sourcing one’s own candidates can be extensive. The prerequisite is to establish effective HR application systems and active employment reference programmes – a competency which Rebmormax can assist in helping a client to set up and manage.

And the proposition is not pie in the sky, says Sam. She cites an example of a company who employed 10 000 staff nationally and at the outset used a decentralized recruitment model for which an internal HR division was responsible.

The organization then internalized the function – excluding executive recruitment – and went through a rigorous process of establishing all internal and external SLA’s, templates and SOP’s. Internal recruiters were sourced and care was taken in selecting best source methodology, infrastructure and systems.

The next steps were to start building relationships with ‘internal clients’, across the group, gather and streamline the vacancies and build a current database. As relationships developed across the group and credibility was established, the internal function began to make more and more placements.

The company noticed a steep and aggressive growth pattern. By month twelve, a 98% reliance on the internal division on contingency-based recruitment was recorded, translated into savings of on average R1million per month. Time to fill was achieved 100% of the time (60 days from requisition to start date) and a 99% retention rate on 3 –month post placement was achieved.

A second case study was implemented by an organization with 4 000 staff nationally using a centralised, outsourced recruitment model (RPO). They underwent a rigorous analysis of processes, structure, statistics, infrastructure and service providers and then rewrote the SLA’s to expand the number of metrics to incorporate competencies including: candidate care, commercial acumen, passive and active candidate sourcing. They implemented an e-recruitment system (Taleo) and took a step further by amending salary structures to reward not only placement numbers, but the competency model (and penalized accordingly).

The results were astonishing.  Time to fill improved from 54% to 72% within three-months, the recruitment team headcount was reduced from 7 to 5 and complaints on quality and delivery from the customer reduced to zero.

There are other factors worth taking into account when considering an internal recruitment function.

An internal resource is in a better position to manage planned and non-planned vacancies – not just vacancy driven recruitment. They are at the face of internal shifts, can turn around a passive candidate database into an active one quickly and build networks of internal and competitor competencies effectively.

Why? Because the role of the internal recruitment consultant is to immerse themselves into the company culture, developments and language completely. When a position becomes vacant, the internal consultant can concentrate on the job specifications – because the rest is already second nature and the credibility of one’s standing has already been established with your internal customer – the line manager.

However, one form does not fit all.

An organisation with a strong brand capability – like Vodacom – is more likely to gain traction through their website. But smaller companies with less brand presence need to piggyback on job boards like PNet and Career Junction.

More importantly, the internal recruitment model does not apply to executive search – especially when one considers the three identified metrics. High-level executives often have three to six month notice periods – which would throw out the 60-day algorithm altogether.

Furthermore, when one considers the employment value proposition from a social media strategy point of view, one CEO is more likely to follow another CEO on Twitter versus a job feed. So a company needs two parallel social media strategies to ensure an appropriate footprint in the non-mandated recruitment space as well as the mandated recruitment space.

Who would manage this from an internal offering? It does not make internal business sense to run two such vastly different strategies from the same pot. The solution is to retain non-mandated recruitment internally and to outsource executive placements to a consultancy that makes it their job to focus on a high-level candidate base.

It’s a consultative process, believes Rebmormax, and one lid does not fit all pots. Before we make our final recommendation, we evaluate the environment thoroughly and implement in-depth research.

 

 


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