14/04/2010

By Anne Beitel, Managing Director, Ececutives Online

In the current economic downturn, there is no room for error in recruitment. HR must ensure that a sustainable recruitment strategy is in place. But what is the optimal route to achieving such a strategy? A number of factors need to be considered in order for HR to guarantee an optimised workforce for the organisation.

Sustainable recruitment is the ability to employ an appropriately motivated candidate, for a specific role, within the required time frame, at a reasonable cost – whatever the economic climate. With redundancy figures rising every day, many more candidates are applying for fewer and fewer jobs. On the surface this situation may seem advantageous to HR departments given the fact that there are more people to choose from, however in reality this simply makes the process more laborious and time consuming. While the economy suffers, organisations will be doing what they can to retain their best staff and, due to financial commitments, employees in general will be risk averse and less willing to pro-actively consider changing jobs. This means that the right people are not necessarily available for consideration. However, the sheer volume of applicants makes the administration and screening procedure far more difficult. The net result is that HR departments have to work considerably harder and indeed smarter, to maintain any form of sustainable recruitment strategy.

A best practice recruitment strategy requires a comprehensive bank of knowledge and expertise including: knowledge of which media is appropriate in order to attract the right candidates for particular roles; interview techniques that get to the heart of a candidate’s suitability and finely-honed negotiation skills in order to secure the right candidate in the shortest possible time frame. These skills are all being pushed to the limit as more and more people enter the job market.

So what is the optimal route? Unfortunately there is no silver bullet and many factors need to be considered by the organisation in developing its recruitment strategy. Firstly, HR needs to look at the size of the organisation, i.e. the number of job roles recruited for every year, and the relative similarity or diversity of those particular roles. Also, part of this analysis should include determining whether or not the hiring decisions are centralised or dispersed throughout the organisation to individual business functions.

Large organisations that hire a number of similar roles every year such as delivery drivers or call centre agents may find that the most effective recruitment strategy is to establish a recruitment team whose mission is to attract, screen, interview and hire according to a standard specification. Although these teams are, in fact, an external supplier they are usually based in-house and are known as RPO (Recruitment Process Outsourcing) agencies. The agency will help to support more routine, volume recruitments by managing the whole process, whilst ensuring that the fees and margins are relatively low. Routine, high volume hires such as this should always be managed with the direct cost of recruitment in mind.

It is important to note, however, that small to medium sized companies which hire only occasionally, or an organisation of any size that hires very specific, specialised roles including executive level positions that are crucial to the company’s long term strategy and success will not find it efficient to dedicate staff to the task. The opportunity cost of a wrong or delayed hire is what should drive the decision making process in this situation and such organisations need to look at outsourcing the work to a recruitment partner. Having a vacant position such as a Sales Director can increase the opportunity costs the longer it is left vacant, i.e. the monetary loss to the organisation because there is no one managing and driving the team towards achieving the business objectives and therefore securing the necessary sales targets.

If working with a recruitment partner who specialises in executive level placements, organisations must, as part of their strategy work in partnership to ensure that job briefs are fully aligned with the company’s requirements. This will guarantee that the recruitment partner is sourcing exactly the right candidate for the vacant position and provides a high quality short list – as dictated by the requirements of a sustainable recruitment strategy set out at the start of this article. This issue of ‘reasonable cost’ then comes into focus, as the final component of ‘sustainable recruitment’.

Through its experience of dealing with traditional head hunting organisations many organisations build into their strategy the high, up front fees required to start the recruitment process but this doesn’t have to be the case. Recruitment partners need to realise that a more flexible fee structure is required as organisations face increasing financial pressure due to the current recession. Typically an executive search firm will charge a 30% fee on the entire package a person is going to earn which includes not just their salary but estimated bonuses, car allowance and health insurance. They will charge this figure in stages, for example: 10% following receipt of the job brief, a further 10% for providing a shortlist and the final 10% on completion. This means that a company could have paid 20% of the fee without even hiring the candidate which can often be quite a substantial figure when recruiting at an executive level – certainly not something that can be sniffed at for the smaller, medium sized organisation. A much more flexible fee structure whereby the high, up front fees are reduced needs to be more determinedly sought out by the client companies – because they are available.

There are many variables which need to be considered in order to achieve a sustainable recruitment strategy. HR departments must ensure that appropriate analysis is undertaken before any recruitment decisions are made in order to avoid mistakes – mistakes which are liable to have an extremely detrimental effect on the organisation’s future – both immediate and longer term.

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