Welcome to

Recruitment Process Outsourcing The lifeblood for many businesses

By CPG Executive Consulting Ltd Presented By Helen Roberts - CEO

Purpose of seminar

Never before has it been so important to get your hiring right. Learn the true value of RPO and what it can do for you & your business. Recognize the pitfalls of recruitment and learn how to avoid common hiring mistakes allowing your company to grow seamlessly.

What is RPO?
Recruitment Process Outsourcing is quite simply using the expertise of recruitment professionals to manage the internal recruitment in your business.
Recruitment is a complex procedure that requires thought and planning

Company staff needs analysis Recruitment and budget planning Assistance with recruitment process development Conducting recruitment drives Employee induction Talent Management program

Who uses RPO?

All companies. SMEs and Blue-chip and PLCs

Statistics
There was an increase of 27% in RPO contracts in 2011 representing $1.4 billion in revenue. 70% of companies rehired the same RPO provider 10% re-used RPO with a different RPO provider 12% used RPO for once off projects Only 8% did not reuse RPO again 62% of RPO projects were multi-country projects
(Source: Everest Group)

Whats in RPO for me?

Time. Enabling key personnel to get on with growing the business. Gain access to a team of professionals for a fraction of the cost. Have a consultant who can assist you with end to end recruitment planning and role out. Reduce the total fixed and variable costs associated with recruiting. Scale recruiting capacity up or down on-demand. Institute a consistent and predictable recruit-to-hire process. Increase candidate quality. Reduce time where roles are vacant. Increase hiring manager satisfaction and have required staff in place so the business does not suffer. Assist with marketing and enhance employment branding. Reduce turnover and impact on business & other staff members.

What do I need to think about when recruiting?

Discover the current and future talent needs for the company. Budget planning & analysis. Identifying recruiting timeframes. Media strategy best route to identifying talent. USPs and how to market yourself to attract the right calibre candidates. Identify the possible hidden costs of recruitment process. Cost of induction, training and staff integration.
Recruitment takes a well thought out plan and the assistance of experienced professionals

Benefits of Proper Recruitment Planning

Reduce possible tension with current staff by getting staff input and their buy in

Decrease risk of making a mistake by spending or using unnecessary money/resources

Ensure all hires are necessary and will compliment current staff and add to the bottom line

Reduce time spend on recruitment taking away from normal day to day operations

Reduce staff turnover by hiring the right people that fit with the team.

Identify the realistic current and future talent needs for the company CASE STUDY

A growing media group hired a large number of backend web and application developers in a short period of time to take care of a large current project that was falling behind schedule. The project was estimated to last a further 9 months.
The staff were taken on permanently on the assumption that new applicable business would come in by the end of the project. This assumption was not communicated to the sales staff who were operating on previously set sales targets focusing on a different business sector. Due to the additional staff the project was completed 6 weeks in advance, but no additional work was available.

What happened

CEO was not happy and quickly put pressure on the sales staff to bring in immediate work to fill the gap. This changed the focus of the sales teams efforts and sales they would have closed were pushed out and one large deal was lost. An analysis of the skills of the new employees was done and some team members were moved to new projects which was positive apart from some personality frictions that ensued. This took some extra time to resolve. 3 of the team members from specialised development areas were let go. This led to two Team Managers losing confidence in the management, due to the in house friction and future uncertainly in the company. They left stating they needed greater certainty in their employment.

Learning Outcomes
Company realised they need to be more focused on forward planning and ensure all hiring was proactive & less reactive Company had not considered the impact of their actions on current staff and asked for feedback and buy in on future recruitment. Company had not considered the knock on effect and additional costs they would incur. They implemented careful analysis procedures to identify possible future hiring risks.

Failing to plan properly and communicating those plans could cause impractical hiring and in house turmoil resulting in staff turnover or business loss or both.

Understanding what is involved in recruitment

Meeting with management to understand growth plans for the company. Understand the actual positions that must be filled and in what length of time. Learn from past mistakes and create a new structure and recruitment process that must be adhered to. Provide detailed job descriptions outlining the position and the length of time person required. Ensure all skill sets and personality traits and competencies have been identified.

Research salary market rates and agree salary brackets and benefits .
Control costs. Create a budget for recruitment Agree recruitment and interview process which is adhered to across the company to ensure quality standards are upheld. Conduct market research to identifying the best mediums to advertise and costs of same. Ensure response is measured. Get clear on the company position, where its at and where its going. The values across the business.

Understanding what is involved in recruitment

Place adverts and review quality of applicants and update ads or change recruitment project as necessary to increase quality applications. Acknowledge applications received and measure response. Prepare questions and format for interviews.

Set up and conduct first interviews. Liaise with key management personnel to identify and compile a candidate short list.
Notify applicants of their rejected applications. Set up and conduct second interview and / or third if necessary. Action any employment testing (psychological, physical or medical). Do reference and background checks.

Understanding what is involved in recruitment

Qualifications checking with the relevant body.
Notify applicant of decision and negotiate any conditions. Extend formal offer and record acceptance of the same. Complete and send out formal contracts with all conditions and duties listed ensuring all laws have been adhered to. Create an induction and training plan with line managers to ensure employee will be properly integrated into the company efficiently and effectively. Prepare and organise the induction and ensure that all necessary resources have been ordered and are in place before the employee starts. Keep in contact with candidate to ensure no additional problems arise and ensure employee starts.

Recruitment is a complex and detailed process where disregard for any step can cause costly challenges for the company and management

Discover the current and future talent needs for the company
Basic questions to consider

What are the current staffing levels and how are they performing? What is the turnover? Are all employees efficient, properly trained and what duplication is happening? Do you really need new staff and have you implemented process improvements? What are the current employee costs (per employee)? What hidden costs are there (floor space, pcs, telephone costs, etc.)? What is the current margin and what can be spent on hiring?

Discover the current and future talent needs for the company

What additional revenue needs to be generated to pay for new employees? Will the hire be permanent or contract? Do you have the space and resources to take on more staff? What additional revenue will the new employee need to generate to justify the hire? When are the employees needed? Who will manage the recruitment process? How long will the process take? How does the company compare to competitors for attracting staff? Have the proper training plans been created?

Proper Planning

Avoids costly mistakes

And ensures a smooth transition

Recruitment needs analysis Case study

An expanding Investment Management firm hired a senior Portfolio Manager to the team.

They hired an individual with an excellent skill set 20 years of experience in the required area. They had however overlooked how this new employee would gel with the existing team. There were personality clashes that severely impacted the working environment. During ensuing discussions it was discovered that the new staff member was brought in on a higher salary than his line manager which caused additional friction and dissatisfaction amongst the team.

What Happened

A recruitment and industrial relations expert was brought in to investigate and resolve the situation. Senior Management were interviewed and in-depth discussions took place to find the best course of action. Senior Management realised their mistake on not involving enough line managers in the recruitment process. They also recognised that they had not compared or benchmarked the salaries of their employees versus external. The consultant negotiated with the conflicting personalities to see if a tenable solution could be found. It could not. The new employee was offered a new position in a sister company with a slightly downwardly revised salary. A complete survey of all employee salaries and benefits was conducted and benchmarked across the market. It was found that salaries were slightly below market rates, but not significantly. At the next performance review all employees within the department were properly reviewed and salaries were adjusted.

Learning Outcomes
Senior Management realised that they needed to be very clear on what they were looking for in all areas not just skills

Senior Management realised that they needed to include all relevant staff in the recruitment planning process

Senior Management learned that they need to benchmark salaries externally and keep salaries within the range they have within their business.

Lack of proper planning can cause untold damage and the cost of rectifying these errors can be massive and have a major impact on business and staff satisfaction

Budget planning & analysis

Typical costs
Sourcing Costs: Print ads, online job boards, and/or CV banks, Social Media. (divide the cost by the number of positions you are filling). How much time and expense do your administrative staff expend to open, respond, and route CVs to the hiring team? What is their cost per hour and what overtime do they need to spend completing this and all normal duties? Interview Costs: How much time does your hiring team / recruiter spend screening through CVs? (All CVs viewed not just those brought for interview)? If your organisation conducts preliminary phone interviews, how many were conducted and how much time was spent by the recruiter to prepare, conduct, summarise and communicate the results of those interviews? Do you have an automated applicant tracking program? This is an indirect cost that you may choose to spread across your hires for a specific period of time. Did your hiring team or the interviewee incur any travel expenses that were reimbursed by the company? How much time is spent scheduling interviews? How many staff members were involved in the interviews? How long per interview? How many interviews? What is the average cost of the interviewers time?

Budget planning & analysis

Typical costs continued: Offer and acceptance costs: How much time and what was the cost for follow-up with candidates during negotiations and to notify those who were not hired? What is the cost of referral fees from a recruiting agency or an employee referral? What are the relocation costs? Some costs may include moving company, airplane tickets, hotel accommodations, temp housing etc. What is the cost for background investigations and/or reference checks? Drug screens? Employee Starting costs: If there was a signing bonus, how much was it? What costs does the company typically incur to bring someone on-board orientation, mentor/ training, benefits enrolment, computers, cell phones, uniforms, etc.? Hidden costs How long did it take to fill the position from start to hire date? What could you have done to reduce the time to hire? What was the impact on productivity while the position was left vacant? This can be difficult to calculate especially depending on the position. However, it does have an impact on the hiring manager and the organization as a whole. How satisfied was the hiring manager / organization with the hire? This assessment can be done following the hiring but should be repeated again 3 6 months to get a real sense of how successful the hire was.

Average cost per hire

Average overall cost per hire in 2011 in the USA for all industries was $3,479. Average for small companies (100 to 999 employees) was $3,665. For midsize companies (1,000 to 9,999 employees) average cost was $3,632. For large companies (10,000 or more employees) average cost was $1,949. Total U.S. market for talent acquisition is currently about $124 billion including the cost of internal staff salaries, advertising, technology and other external service providers. None of the above includes hidden costs
(Source: New Bersin & Assoc)

Analysing the budgets for recruitment Case study

A manufacturing company miscalculated their operating costs and therefore their margin which was 6% lower than anticipated.

Due to a large contract they needed an additional 43 staff members on a contract basis to complete the work.
They had not properly identified the cost per employee as they would now have to run a late shift which after negotiations with the union was costing 22% more per employee on that shift. They had anticipated that they would be able to source temp workers by advertising in local papers and had a budget for this. However with the reduced wages they were getting no applicants. They promised the client delivery on the project and now realised they couldnt afford to resource or pay for the necessary staff.

What Happened

The company quickly brought in a recruitment professional to see how they could resource staff that would be willing to work at lower cost. A small number of temporary staff members were brought on and worked with experienced employees to learn the process. The recruitment professional had ties with another manufacturer who he negotiated with to provide an outsourcing facility for the additional overtime work. Negotiation with the client took place and an additional 3 weeks lead time was given The contract was completed at a 25% loss but within the new timeframe. The RPO specialist worked with the company to put in a scorecard in place to properly identify the employee costs for future projects and they signed with the RPO to provide recruitment at a fixed cost per contract.

Learning Outcomes
Senior Management realised they need to cost out a project fully before agreeing a deal and bringing in new business.

Improper planning had a massive knock on effect with staff and client satisfaction. Senior Management learned that resource planning is vital to success. Senior Management realised that it was imperative to have experienced professionals to consult on future needs and that they could not do it by themselves.

Proper analysis of budgets is necessary not just for recruitment staff but for management so they can properly price new business.

Identifying recruiting timeframes Case Study

A logistics company had a need for a senior executive to drive new business growth due to the signing of a multinational client. There was a specific skill set within food distribution needed for the executive The directors decided to give the responsibility to the Hiring Manager to fill this role as well as another drive to fill a further 28 jobs related to this new business. Due to the volume of recruitment and the complexity of the executive role the Hiring Manager couldnt give the necessary time to the recruit the executive. The Hiring Manager filled the majority of the lower level roles however the current management structure didnt have the expertise or ability to manage such a rapidly growing team. 3 experienced staff members including a team leader left due to the extra work load. With the disorganisation of the new staff 4 of the new staff members left and the client was complaining as the required skill set and resources were not in place. The recruitment drive was already running for 2 months and only 12 of the necessary staff had been hired and only 4 had started due to their notice period.

What Happened

Initially they hired in a part time Recruiter however they were not able to cover the workload due to lack of time. Plus the cost was expensive in comparison to the work they could complete. An RPO firm was then brought in to conduct a head hunt search for the Senior Executive. This was completed within 3 weeks and the executive started 3 weeks later. The recruitment firm was then employed to help replace the lost staff and assist with the new employees. This took an additional 6 weeks. The Account Manager for the new client conducted several meetings with them to show how they were going to resolve the situation and a reduction in their fees for the initial period was negotiated and agreed to. A new recruitment process was put in place to ensure critical hires were dealt with first and a new management and resource control training program was rolled out for team managers so they could better manage their team. The RPO firm conducted an in house training session for management so they could better understand the recruitment function, the supply of candidates in the market and how to plan for future needs. The RPO firm was contracted on a project basis to ensure future needs could be met quickly

Learning Outcomes
Senior Management understood that they had greatly underestimated the time it would take to hire employees. They further had not recognised the additional stress they had put the Hiring Manager under and the additional over time salary costs required to complete the recruitment project. They also recognised the value of the use of an RPO firm. As the company had never allowed assistance from outside recruitment firms previously. They further learned the danger of not having qualified staff on hand to manage the business which cost them on fees and also on turn over of staff which was an additional expense that they would not have incurred with appropriate planning.

Misunderstanding your recruitment time frame and the realistic abilities of your staff will lead to delays in recruitment and additional unnecessary costs

Media strategy best route to identifying talent

Case study
A small accountancy firm has remained steady for many years and had an MD who retired.

In the last 2 years they had only brought on one staff member who came in as a referral from a staff member. The new MD who came from a large firm wanted to grow the business and to bring in a new Business Development Manager to start aggressively growing new business. A recruitment budget of 10k was allocated and the new MD had his assistant put a large advert in the national newspaper.

The response was poor and no hire was made.

What Happened

The CEO was given a referral to an RPO firm. After the meeting with the CEO an updated job description was created and the recruitment firm already had 3 potential candidates for the role. The RPO firm re interviewed the candidates and presented 2 CVs to the CEO. Both candidates were interviewed and 1 candidate was offered the position who immediately accepted starting 5 weeks later. The cost of the hire was $4,700 and took the RPO firm less than a week from initial contact to placement.

Learning Outcomes
The CEO had not understood that the cost of paper advertising was very expensive though it was what he had always used. He realised he was out of touch with the best resourcing methods. He had not anticipated the advertisement not working and learned that you need to be flexible and try several avenues to get the right candidates He learned that a recruitment firm often has the candidates already in their network so time need not be wasted on expensive advertisements. That the cost of making the hire through an RPO was significantly less than the advertising cost alone.

The cost of advertising can be significant and there is no guarantee of any positive results. Thought must be taken to use the right mediums and to not rely on one particular type only.

USPs and how to market yourself to attract the right calibre candidates

Case Study
A growing risk management software company wanted to hire 8 additional developers.

They posted adverts on several job boards stating employer confidential. They provided little information on the company as they didnt want to waste time with a large number of applicants or take calls from agencies trying to get the roles on.

At interview stage, which took over 4 weeks to organise due to lack of applicants, they got a few good candidates who they wanted to hire. 3 of the 5 applicants turned down the position.

When asked why two said that they hadnt been that interested in the role in the first place as it was difficult to find out about the company. They did not feel that they got enough additional information on the company at interview and with so many IT opportunities on the market there were better more exciting roles available. The third candidate had similar feedback and admitted they were using the interview for practice as another big group were interested in him.
All candidates said they didnt feel there would be a good opportunity for progression or diversity in the software company.

What Happened

An RPO firm was brought in. They spent several hours in the firm asking questions and putting together a candidate information pack. They worked with the line management to train them on interview techniques and how to demonstrate what it was like to work in the firm. The RPO group took over the recruitment of the staff and re-wrote the job spec to include the companys working environment and development opportunities. Through a combination of candidate referrals and continually refreshed ads on job boards, including experimenting with different copy of the jobs they successfully got over 30 applicants. 15 were brought to interview and through a detailed interview process they highlighting the benefits of working for the company. 7 out of 8 offers were accepted on the first round. An additional offer was sent out to a late applicant who accepted the last position.

Learning Outcomes
The company made the mistake of assuming that candidates would want to work with them and had not anticipated the viewpoint of the applicants or the level of competition. By going through the exercise of identifying why people would like to work with them they saw an improvement in the attitudes and productivity of their current employees who had not recognised many of the benefits. By getting interview training they were better able to identify the right candidates as they understood their company offering & fit better.

By using an experienced RPO firm they were able to recruit faster and lowered their turnover rates due to the improved employee attitude that created a better gelling team.

Knowing who you are as a company and the benefits to sell to potential employees dramatically increased your chances of attracting the right staff.

Cost and hidden costs of recruitment process Case study

A furniture distribution company lost 3 sales executives.

The PA of the CEO was instructed to advertise for 4 sales executives across various mediums and got a good response.

It took several days to go through the CVs and she set up 15 interviews with 3 executives meeting each candidate. The process took 24 hours of interview time to finish over a six 6 week period. It took a lot of time to organise the diaries due to management travel etc.

What happened

The top candidates chosen had already accepted other roles and those left were not good enough. A new recruitment campaign had to begin. As the PA of the CEO had two large time sensitive projects a recruitment firm was brought in for 2 of the hires and the other 2 were left in the hands of the PA. Due to the stress of the additional sales revenue to be generated they lost a Sales Manager An additional cost for the new advertising was spent A new round of interviews was scheduled. The recruiter filled 2 sales roles and one sales manager. The PA found the 3rd Sales Executive through her efforts. One sales role was left vacant.

The Outcome and analysis of the costs

Advertising and staff time Additional 1,700 (3 jobs boards and 1 paper with 3 ads) 2 full days of PA sorting though CVs and arranging interviews at a cost of $15 per hour = $266 and 7 hours of overtime to catch up on additional work at $25 per hour = $175 24 hours of 3 different executives who charge 300 an hour = 21,600

$ 3,400 266 175 21,600

6 weeks without sales executives in place targeted at 10k a week per sales consultant = loss of $240k in potential earnings
Losing 1 manager Who was too stressed as targets could not be reached due to lack of personnel and spending 16 hours a day trying to make up for the sales Recruitment and training of additional Sales Manager = 11,500. Loss of revenue from Sales Manager ( 6 weeks to rehire Manager and a hidden loss of direction with sales team reducing normal sales of team of = 160k Cost of using Recruiter 2 sales Executive 7,000 each 1 Sales manager 10,000

240,000

11,500 160,000

14000 10,000 - 460,941

The real cost of recruitment is often far more significant than employers believe. The loss of earnings can often be one of the biggest factors, much more so than the actual advertising and staff time costs.

Identify the possible hidden costs of recruitment process Case study

A manufacturing firm was looking for a new Finance Manager. They didnt want to spend money on advertising so relied on asked for referrals from staff They also put up some free ads on various job boards. They got very few responses.

After 2 months searching and putting pressure on staff to find referrals they agreed to use a cheap recruiter and got mediocre CVs.
Management offered the role to the best of those CVs due to time pressures. Within 2 weeks the new finance manager had incorrectly overcharged a client by 30% and was aggressive on the phone looking for collection. The client was lost.

What Happened

The new Finance Manager was let go. A new recruitment firm was hired paying a 20% rate. Within 3 days 3 candidates had been presented. Within 1 week an offer had been made which was accepted. The new Finance Manager put in place some new accounting analysis procedures to streamline how business was costed. A simple reporting structure was set up. Both sales staff and management were trained on how to use it for costing purposes. After significant analysis 3 process changes were made that reduced overall manufacturing costs by 8%. An itemised billing process was implemented allowing clients to see all costs in an online portal which stopped all complaints and improved customer satisfaction and led to an increase in orders.

Learning Outcomes
Management had not anticipated that their recruitment efforts would only attract unsuitable applicants. They chose the best candidate from a mediocre bunch. They realised they should have gone back to the start and re looked at a better pool of candidates.

They learned that, through the use of a professional recruitment firm, they were able to have access to a large pool of talent with the skill set required and make a good hire.
They learned the consequences of a bad hire by having to fire a staff member and the costs involved. They lost a good client as a result of a poor hire. Systems and procedures were put in place, there was a process to avoid any future issues

Making a bad hire will work against the company even if it takes time to show up in the results. Its simply not worth it.

Cost of induction and integration Case Study

A sales outsourcing company were growing quickly and had large recruitment drive to bring on 20 staff members within 1 month. Managers were already over worked and there was no dedicated person to training. As the company was quite young there were no processes in place to manage such a large volume of staff and there was a lack of management structure & expertise to quickly adapt. 4 new staff members did not have a desk or PC for 3 days when starting. Due to the layout of the office it was discovered that there was not enough room to fit in the additional desk s for 3 new starters.

6 people were put into induction to shadow the wrong team.

There was no training manual and so new sales staff lacked direction and started (un-knowingly) misrepresenting the company to potential clients. It was a surprise to management when 2 new starters came in at 9 am. One of these hires did not come back after lunch.

Outcome and how this was solved

16 of the new starters left within 3 months and 4 within the first week. Cost of recruitment: Loss of potential revenue: 5k per month per employee for 3 months A RPO and HR company was hired after the 3 months to try and recruit more sales staff. The RPO firm placed all 16 sales roles for a fixed cost per hire (3k) The RPO firm spent 2 days observing the business of the company and with the help of management put together a 2 day training program for new sales staff. The office layout was addressed by changing the types of desks used and for the next recruitment drive they hired additional office space. Cost of new desk and chairs: 300 per set for 52 staff Loss of existing desk and removal charges: 260 per set

18,000 240,000 48,000 3,700

15,600 8,320 1,900 700 -336,220

Management was given training on how to bring on a new staff member A resource plan and checklist was put in place to ensure all tools were in place for new starters

Total

Learning Outcomes
The company realised that fast growth was only possible with proper planning. That an induction program and training manual is essential to ensure the quality of sales and staff integration. That all resource planning must be completed in advance before recruitment begins. That management training is necessary to ensure that staff is not lost due to mismanagement. Proper communications and tracking of candidates is necessary so no one is forgotten.

Thinking about and planning induction and training is a far larger part of recruitment than most companies realise. Failing to have a plan here will lead to confusion, high turnover and increased stress on existing staff.

How to chose your RPO provider

There are many providers of RPO on the market. It is vital that you understand your needs and properly match the skills of the RPO provider to your needs.
Examples of things to consider Your provider has a history of success. Ensuring you like and trust the actual RPO consultant assigned and not just the company as a whole. Ensure they have local knowledge necessary to assist you. Access to a wide reaching candidate network. They have access to job boards that will meet your requirements. Ability to head hunt for ideal candidates rather then rely on contingency recruitment. Ability to set up recruitment department and all processes. Ability to pre-screen candidate properly having had detailed discussions with you on required skills and personalities. Skilled in account management and experience working with line managers for interviews. Access to a comprehensive candidate tracking system. Compare all costs hidden and fixed to ensure using an RPO makes financial sense. The RPO has an aftercare assistance with starters to assist with management of the candidate and reduce fall out of candidates.

How to manage the relationship with your RPO provider?

Ensure you are clear on what your recruitment goals are. Work with your RPO provider to conduct a SWOT analysis of your current recruitment process and see where processes need to be changed or created. Ensure you communicate with your RPO provider as you would your internal staff. Company changes effect them too. Create a measurable set of KPIs that are achievable and are understood fully by your RPO provider. Ensure your RPO provider is aware of all the applicable policies that will effect recruitment. Ensure the RPOs processes are aligned with the organisations. Ensure regular meetings with your RPO to discuss progress and any required process changes. Give honest feedback to both positive and any possible negative feedback. Awareness of issues will lead to improvements.

Summary
Plan your recruitment drive carefully.
If you do not have the expertise the wisest and cheapest solution is to hire a recruitment professional. Analyse and track costs both hidden and fixed.

Create a clear strategy to attract and recruit the right staff.

Never hire the wrong candidate no matter what.

Questions and answers

Contact
Helen Roberts CEO
hroberts@cpg-executive.com http://uk.linkedin.com/in/helenmroberts

www.cpg-executive.com