I just wrapped up a webcast for SHRM today on a new recruitment model that I believe will allow all organizations to have the most effective and efficient recruitment strategy available. It’s called IRM (Integrated Recruitment Model). Below is the transcript of today’s session. Feel free to contact me with any questions or comments. A LinkedIn group has been created specifically for this topic to discuss IRM in an open fashion. You can join this group here.
The Best of Both Worlds: A Hybrid Approach to Talent Acquisition
Written by: Doug Douglas
Hello and I hope everyone is having a great day. I know all of you have busy schedules and lots of things that compete for your time, so I truly am grateful that you’ve chosen to invest an hour to listen to some of my thoughts around recruiting. The challenge that I always face is to be able to speak about a topic that is useful to a very wide audience. Some of you are working for very large, global companies and others of you are the only person at your company who handles recruiting, and you have other responsibilities in addition to that! Some of you are in a retail environment, or a call center, or manufacturing, or technology space, or a skilled trade. Are you beginning to see the challenge here? My goal is to be able share thoughts and ideas that are broad enough that you might be able to apply this information to your situation, with just a splash of details here and there that can get you to focus on very specific needs that you face.
We will have a question / answer time at the end of the broadcast, so I encourage you to send in questions there on your screen and our moderator will select some for us to address. I’ll also put up a slide at the end of the session with all of my contact information, social media links, etc., and I LOVE to hear from everyone at the end of the session…even if it’s just a quick message that says that you enjoyed it, or that you think I’m crazy. I do not receive any contact information for you, so the only way I can connect with you or communicate with you is if you reach out to me….so please do! I do my very best to try to reply personally to each person who reaches out to me.
Miley Cyrus became a household name when she began her TV and music career on the Disney Channel. During the day, when she was at school, she was known as Miley Stewart. But at night, she would transform into a teenage pop star known as Hannah Montana. The only distinguishable difference was a long blonde wig and a change of clothes. The idea was that she could live a normal, average, typical teenage life while also living an exciting, glamorous, high profile rock star life when she wanted. She could have the best of both worlds.
When it comes to recruiting, we have been led to believe that you can either have an internal corporate recruiting team, or you have to outsource your recruitment efforts through a RPO engagement. It’s one or the other – make a decision and stick with it. The debate has been going on for years about which model is the best. The truth is, every situation is unique, and the challenges each company faces are varied. To get an honest answer about which model serves your company best, it cannot be based on preferences, gut feelings, or what you are most accustomed to…but on performance metrics and data, but also what your company will respond to. Some of the key measurements would be based around:
- Quality of Hire
- Time to Fill
- Cultural Fit
- Candidate Experience
Even though your data will give you a more accurate picture, I’d like to look at each of these in general sense and see how internal vs external stack up against each other.
QUALITY OF HIRE
Obviously, both internal and external recruiters can make great hires. Every one of us can give examples of incredible hires that we’ve made. But consistency is what needs to be the focus when addressing the quality of a hire.
Most corporate recruiting teams have limited resources available to them when compared to a recruitment firm (agency). The reason being that an agency must be able to serve a wide variety of clients and solve many problems. Understand that when I say “limited,” it does not necessarily mean inadequate or insufficient. A few examples would be:
- A corporate recruiting team may have an Applicant Tracking System that provides the basic tools to move a candidate from point A to point B, while a recruitment firm may have multiple Applicant Tracking Systems that offer a wider variety of bells and whistles that could be useful for a specific company.
- A corporate team may have 1 or 2 job boards that they use for posting or resume database usage, but a recruitment firm may have 10 or more boards that they have agreements with to cover some very niche needs of their clients.
So when it comes to generating the largest pool of possible candidates, a recruitment firm would seem to have the best potential for success. Why does the size of the talent pool matter? Well, it is my opinion that if you can hire the best out of 100 people then it is usually better than hiring the best out of 10 people. When we have limited options, we usually find ourselves settling out of urgency instead of waiting it out until we find that rock star.
I’d also like to address the motivation factor of each recruiter. A corporate recruiter is generally self-motivated. If they want to go above and beyond, aggressively pursue and attack an opening, it is because that is the way the person is wired. It’s not because they have commission pay waiting on them to make that placement, and that they lose the opportunity to work on other searches until that one is filled (limiting other potential commission). They have no incentive to work harder, faster, creatively, or aggressively other than just for their own self-satisfaction.
An agency recruiter though, they are heavily incentivized. They have commissions riding on making the placement. Because they only have so much bandwidth, they have to be able to fill open searches quickly and efficiently in order to accept new searches and ultimately earn more commission. And most agency recruiters have some sort of guaranty on their placements, meaning that if the candidate isn’t the right fit for the role and is either released or quits, that recruiter needs to replace them at no additional charge – again, taking up bandwidth and reducing their opportunity to earn other commissions. They are driven to make sure they find the good, solid, quality hire the first time because it impacts them financially if they don’t.
Advantage here: External Recruiter
TIME TO FILL
In many ways, the same reasons for Quality of Hire are the same for Time to Fill. We already spoke about the urgency that recruitment firms operate under. There is a very legitimate bonus for corporate recruiters in this area. Corporate recruiters walk the halls and interact with various managers who are making the hiring decisions for open positions. An agency recruiter would BEG for that opportunity so they can prod the manager along to keep interviews moving forward and not stalling at various times. Gaining feedback is far more convenient for a corporate recruiter for the same reason. Apart from locating qualified candidates, the biggest slowdown in the recruitment process is waiting for a manager to provide feedback or to schedule an interview. Having someone there to keep it moving is of high value. Is it more valuable than having more resources by which to locate candidates, and having recruiters who are incentivized to fill positions quickly – I’m not sure.
Advantage here: Draw
One of the major factors in making a good hire is the cultural fit. Understanding the make-up, values, and priorities of an organization, and then having a personal make-up that matches those same things, usually make the difference between an okay hire and a great hire. Corporate recruiters know the company’s culture because they live it and experience it each and every day themselves. It is a distinct advantage to completely understand the types of people, personalities, motivations, and behaviors that fit in seamlessly. Granted, some agency recruiters work on assignment at client locations and can have this same type of advantage, but keep in mind that I am speaking in general terms.
Advantage here: Internal Recruiter
This has become a major focus in the past few years after many organizations – corporate and agency – went too far in letting technology take over their recruitment efforts and losing the human element of this function. I want to be clear on this: corporate recruiting and agency recruiting are both, generally, doing a horrible job at focusing on the candidate experience. The #1 thing that candidates hate is falling into a black hole where they receive no feedback, communication, or clear expectations. They hate long application processes where all sorts of personal information must be shared without any guaranty that they are even a potential fit for the job.
Generally speaking though, recruitment firms seem to have focused more on addressing candidate concerns. The highly competitive nature of their firms have forced them to look for advantages everywhere they can. Corporate recruiters are making strides in this area as well, but it appears to be a much slower change for them. Technologies are essential to making the recruitment function effective and efficient, but that human element cannot be abandoned.
Advantage here: External Recruiter
Cost can vary greatly from one company to another based on lots of factors:
- Complexity of the roles to be filled
- Availability of candidates who can do the job
- Number of hires that need to be made each year
- Geographic regions where recruitment efforts are needed
- Technologies available to support the recruitment efforts
If you are in a small company that does very little and infrequent hiring, then it may not be worth it to have an internal recruiter. Outsourcing that allows you to have a recruiter when you need one and not have the ongoing costs of supporting that recruiter when there aren’t any needs.
For larger companies who have hundreds or thousands of hires to be made, then recruitment costs are obviously going to be significant regardless of a corporate or an outsourced structure. In a corporate recruiter model, you have:
- Federal and state taxes
- Worker’s Comp
- Paid Time Off (PTO)
- Office space
- Soft costs like training a new employee
Estimates are that your true employee costs are actually 40% more than their actual pay that you provide to them. So if you have a $14/hr employee, your actual cost is around $19.60/hour.
Then, you have your actual recruitment costs above the employee expenses:
- Job boards
- Career Fairs
- Web site
- Background checks
- Drug tests
- Social media fees (LinkedIn)
With an outsourced recruitment model, you trade those expenses for service delivery fees based on performance metrics to be maintained and priced mainly on the volume that will be hired. There are other factors that impact that pricing as well, but the volume of hiring is the main consideration. For those who do large amounts of hiring, RPO can typically can save you up to 30% on your recruitment costs.
Advantage Here: External Recruiter (for those who hire consistently and with a somewhat high volume)
ADVANTAGES TO BOTH MODELS
So, as you can see, there are distinct advantages to both models. It only makes sense that the very best model, that would accomplish the most, to get the best of both worlds, would be a hybrid model that includes a mix of corporate recruiting and outsourced agency recruiting. This allows the company to play to the strengths that each part brings. By establishing very clear objectives across that hybrid team, each can work together as a team for the ultimate good of the company.
We have a lot of acronyms within recruiting:
- RPO – Recruitment Process Outsourcing
- HRO – Human Resource Outsourcing
- CDR – Certified Diversity Recruiter
- CIR – Certified Internet Recruiter
- TS – Talent Sourcer
- ATS – Applicant Tracking System
I am of the persuasion that thinks there is always room for one more, so I have created a new acronym specifically for our topic today – IRM. Integrated Recruitment Model. I would have preferred to have made it Integrated Recruitment Strategy, but then the acronym would have been IRS and no one would have ever liked that!
IRM is the combination of an internal corporate recruitment team that has a very specific and well-defined set of objectives who partners with an outsourced recruitment organization who also have very specific, well-defined, but a very different set of objectives so that when combined, it provides the most complete, effective, and efficient recruitment model possible.
Consider this: How awesome would it be if Superman and Batman teamed up? Batman didn’t have any special human powers, but he had the coolest gadgets imaginable! Superman had intense special human powers, but no gadgets. Combined – they would have it all! That’s what I’m talking about with the IRM model – creating a Super Hero like recruitment model.
Now that I’ve peaked your interest, you’re probably wondering how it might be possible. What would an IRM look like? How would it be structured? Admittedly, details would vary based on your company and your specific and unique recruitment needs, but generally speaking – this is how an IRM might look.
Let’s first identify the various roles that would be needed in this model, and then we can assign who would be responsible for it based on strength and expertise.
This role would be responsible for receiving the notice of an open requisition, gathering any existing job descriptions, salary details, and other job specific information so the requisition can be built and assigned to a recruiter. This person would build the requisition inside the ATS and be responsible for advertising the opening at the locations the recruiter strategically wants to target. Depending on other details of your strategy, this roll could potentially assist with other support.
This role is the person tasked with locating, screening, and presenting candidates to the manager in need until a suitable person has been hired. This is more than just calling through candidates who have applied. It is a strategic thinker who maps out the recruitment process and then executes it with precision. This is the influencer for the organization – hearing thoughts, ideas and concerns of the hiring manager, and then working with the qualified candidate to make sure all is addressed and acceptable. Negotiator with the candidate to a successful end.
This role is tasked with generating a pool of potential candidates for any given open position. This can be done through a wide variety of means: job boards, internet data mining, social media, career fairs, networking groups, university or trade school partnerships, military exit programs, etc. These candidates would then be funneled into the open requisition for the recruiter to evaluate. This role could also assist with scheduling candidates for interviews with the recruiter or with hiring manager interviews.
SOCIAL MEDIA SPECIALIST
This could potentially just be a single person to handle this responsibility, or possibly a small team if you are dealing with a large volume of candidates and people who are willing to engage. The purpose of social media is engagement – not just posting and leaving. This person would be responsible for creative postings, videos, blogging, and building a recruitment brand for your company.
Depending on the size of the recruitment team, there could be several Recruiting Leads that focus on a division, subsidiary, geographic region, etc. as needed. This role is one where recruitment issues can be escalated for resolution, approval of ideas, mediation between opinions, etc. This person can also be responsible for recruiting, but would be a more senior member of the team with more experience to draw from.
This role is the person is to have oversight and leadership for the entire IRM strategy. This person manages the internal corporate recruiters, along with holding the outsourced team accountable for their aspects of daily delivery and escalating any issues that may arise.
Now the decision needs to be made on if the internal or external team holds responsibility for each of these roles. As I assign these now, I am generally speaking based on which side typically has strengths in these areas.
|Social Media Specialist
One of the biggest challenges that RPO firms face time and time again is the fear of internal corporate teams feeling like they are about to lose their jobs if a RPO firm is engaged. Because of this, they often are hesitant to do things to make the RPO firm successful. By structuring the recruitment team in the IRM model, it alleviates the concern among the internal team and sets up a true team environment where everyone wants to be successful. Quite simply, it should eliminate the US vs THEM mentality that often comes through a blended engagement.
Additionally, one of the drivers for agencies wanting to be successful and working urgently is the reward of commissions when they are successful. I would change the way the entire team is compensated in the IRM structure. I would put into place a quarterly bonus program for the entire team – not just the external team. When the TEAM hits the established key performance metrics as a whole, they are all rewarded with quarterly bonus pay. By having this structure, again, all team members are striving for success and rooting for each other to be successful, instead of having an every man for himself mindset. Depending on how you and your IRM partner decide to price this engagement, it will need to be decided what the bonus pay would be and who would be responsible for those payments – the company or the agency or should each side be responsible for paying their people for financial record keeping purposes.
Since both sides are working in unison, all candidates and records should be kept in a single ATS. If the company has an ATS that is compatible for the recruitment strategies and processes that are being established, then everyone should use that system. If the company does not have an ATS, or they have one but it just isn’t compatible, then the agency should be able to create a new talent portal through their ATS and link it to the company’s web site to process all candidates.
I also have been saying repeatedly for the past 3-4 years that the strategies and processes for reaching Millennials will be far different than those we have used for the past 5-10-15-20 years. It will have to be more collaborative and interactive with a recruiter focused more on influencing rather than recruiting. The IRM model lends itself nicely to the new recruitment ways that will be most effective over the next 10 years.
Everyone, on the corporate side and the agency side, would be responsible to the IRM Manager. If an issue needs to be addressed, the IRM Manager would have the ability to initially address the issue with the individual(s) from the agency side. If it is not successfully addressed, the IRM Manager would escalate the issue to the agency Account Manager for satisfactory resolution.
Obviously, cost will vary based on the specific engagement – size, scope, team size, number of hires needed annually, etc. However, when you look at IRM vs RPO, the cost could be significantly less because you are not requiring the RPO provider to supply as many external headcount to run the engagement.
You must also factor into this that improved effectiveness from the recruitment team (filling open positions) means that your company is operating at peak performance – meaning it is producing more and likely generating more revenue by having increased personnel in place. That could mean that you are accepting new work that you could have been turning away recently because you didn’t have the headcount to execute on the additional work. It could mean that you are saving overtime money that was being spent for being understaffed.
Remember back a few minutes ago and I walked you through the various expenses associated with having an internal recruitment team? Now, in evaluating the pricing – keep in mind that not all of those costs stay consistent and then you add IRM pricing on top of all of that. Some of those expenses will go away because the IRM partner will supply them for you. There is no sense in both the company and the agency paying for job posting costs, or for career fairs, or travel, etc.
If you are interested in this type of model, the first thing that I would suggest that you do is a full evaluation of your current strategies, processes, technologies, people, social media efforts, metrics – every aspect of your recruitment efforts to see what the most critical issues are that need to be addressed. Now, keep in mind, you very well could have a strategy or a process that is doing okay today, but being able to anticipate that it might be an issue down the road is something to take note of. What I’ve also found is that HR leaders and recruiters very often get too close to their own strategies and processes to evaluate them objectively. I would strongly encourage you to have an outside, unbiased, objective person lead this evaluation effort for you so you can have the very best data possible in your hands to make future changes to better equip your recruitment efforts. I do these evaluations often for all types of companies and I can tell you that I have never had an instance where the HR/Recruitment leadership, and others within their company were in agreement about how recruiting efforts were doing and their effectiveness. The HR leadership usually feels like they are doing a good to great job, but when I go speak with hiring managers, recruiters, executive leadership – they have a very different take on things. Believing something to be true does not necessarily make it true – use someone else to do this evaluation for you.
Now in a couple of minutes, we will be taking some questions regarding this presentation. If you want to go ahead and submit your questions, feel free to do so – just keep in mind that we have a very broad audience listening today. The ideas and concepts that I have presented to you were very general in nature as to introduce this strategy to a wide audience. If you have a very specific question that you’d like to ask, I will be putting up a slide at the end with all of my contact info on it and I would encourage you to contact me directly with those questions.
And again, I really do want to hear from each of you – even if it’s just a quick sentence with your take on today’s session. I do not get a list of people who attended today – or any contact info of yours – so the only way I can communicate with you is if you reach out to me at the conclusion of this presentation.
If you have been around sports much at all, you have no doubt seen the sign that says, “TEAM – Together Everyone Achieves More.” The old models that we are accustomed to have led us to an US vs THEM mentality, and when we operate from that standpoint, what we get is secrecy, self-serving, self-preservation, and competitiveness. You may say, “Well, isn’t competition a good thing?” Yes and no. Yes, it leads to urgency and energy and production, but inside a company environment – it can also lead to, “Well, we did our part. Your team didn’t.” And as long as we did our part, then we feel satisfied. In the IRM strategy – no one is satisfied unless the company is successful. It’s not about this team or that team, this group or that group, our side or your side – it’s about the company as a whole.
Executives typically evaluate a recruiting solution by looking at cost, scale, and intelligence. In all three of these areas, the IRM strategy is a winner. It is reduced costs over a traditional RPO model. An agency has the ability to plug and play quickly, meaning it can scale up or scale down almost immediately when called upon. And because we are all working in unison, all candidates and their information are placed directly into the company’s ATS – meaning they own the data.
I have lived in the RPO world for almost 10 years. I know the advantages to it – many of which can still be present in the IRM strategy. I know the challenges that RPO causes internally and externally. I mean, even just having the word “outsourcing” in your name causes a negative reaction by some because of the way the word has been used in recent years. IRM is a new, improved, more cost effective, more efficient, and more client friendly alternative to RPO. No more US vs THEM. Working as a united team is the best path forward – Together Everyone Achieves More.