Aligning Recruitment with Growth: How to Choose the Right Setup for Your Company

Talent Acquisition and HR teams are crucial when building a successful company.?However, given the overhead costs of hiring such teams, selecting the proper recruitment setup is a strategic decision that should align with the company's growth stage, growth trajectory, and overall business objectives.

This week, we delve into practical recruitment options tailored for companies at each growth phase.?Whether you're a startup founder or entrepreneur just beginning your journey, or a seasoned business leader steering your company's strategic growth, this exploration of recruitment strategies is a must-read.?In this article, we will define HR and TA, explore their interplay, and discuss potential setups.?We will then apply these concepts to different types of companies at various growth stages: multinational corporations with an entity in Japan and domestic Japanese companies.

Defining HR and TA: Focus on the Present vs. the Future

Human Resources is a broad function that manages the overall administrative activities of an organization.?This includes but is not limited to employee relations, payroll, benefits, and compliance with labor laws.?HR focuses on managing the "now" - taking care of the current employees and ensuring the company's smooth operation.

On the other hand, Talent Acquisition is a strategic function that focuses on the "future." TA is concerned with finding, attracting, and hiring skilled individuals to meet the company's long-term objectives.?It involves understanding the company's future talent needs and developing strategies to meet them.

Exploring Different HR and TA Setups

The setup of HR and TA teams can vary based on a company's size, growth stage, and strategic goals.?Here are some possibilities:

• TA operates independently from HR but collaborates: In this setup, TA is a separate function from HR but works closely with HR to ensure alignment with the company's strategic objectives.?This setup allows TA to focus on the company's future talent needs while HR manages the current employees and administrative activities.
• There is no TA, and HR controls all recruitment activities: In smaller companies or startups, HR may handle all recruitment activities besides its other responsibilities.?This setup can be cost-effective for companies with limited resources or simpler recruitment needs.
• Outsourcing certain or all HR and TA functions to external providers: When in-house resources lack particular expertise, outsourcing can improve efficiency in managing short-term, high-volume recruitment needs, recruitment for specialized roles, or handling complex HR activities.?

Now that we've explored the different potential setups of HR and TA let's look at how these apply to different types of companies.

Multinational Corporations (MNCs) With an Entity in Japan

Startup Phase: During the startup phase, MNCs initiating operations in Japan encounter unique challenges. They must acclimate to a new cultural and legal environment, establish brand recognition, and attract talent in a fiercely competitive market. Despite these hurdles, MNCs often have more substantial resources and budgets for recruitment than domestic startups. Some companies collaborate with a local executive search firm to recruit the Country Head and initial startup members. To accommodate time zone differences and ensure a smooth recruitment process, these MNCs may choose to establish a lean, local HR team or engage a local Recruitment Process Outsourcing (RPO) service provider.

Growth Phase: As the MNC expands its operations in Japan, recruitment becomes more complex.?The company may need to recruit for a broader range of roles and manage a larger volume of recruitment activities.?Establishing a dedicated Talent Acquisition team at this stage can be strategic.?This team can focus on attracting and hiring the talent needed to fuel the company's growth while the HR team manages other aspects of human resources.?RPO may also work in parallel with existing TA teams on a project basis to address high recruitment demand.?

Mature Phase: The recruitment strategies must be effective and efficient for MNCs with established operations in Japan.?They may need to manage high-volume recruitment, recruit for specialized roles, and retain top talent in a competitive market.?At this stage, MNCs may choose to have a large in-house TA team, use RPO services for specific roles or departments, or combine both.

Domestic Japanese Companies

Startup Phase: Unlike their MNC counterparts, domestic startups in Japan often operate with limited resources.?At this stage, a single HR professional or Chief Operating Officer (COO) might handle all aspects of human resources, including recruitment.?While companies in this phase rely on employees to attract talent through their networks and referrals, some may also depend on recruitment agencies to introduce talent outside their networks for specific roles.

Growth Phase: Similar to MNCs, the recruitment needs become more complex as the domestic company grows.?The company may need to recruit for a broader range of roles, manage a larger volume of recruitment activities, and compete with larger companies for top talent.?While some companies opt to have HR (generally HR Managers or HR Business Partners) control recruitment, establishing a dedicated Talent Acquisition team at this stage can be a strategic move if hiring demand is high and consistent.?RPO is also a suitable option as a mid to long-term strategy.?

Mature Phase: Large, established domestic companies in Japan must manage high-volume recruitment, recruit for specialized roles, and retain top talent in a competitive market.?They may also need to manage stakeholders' expectations, including employees, customers, and shareholders.?These companies may have a large in-house TA team, use RPO services for specific roles or departments, or combine both.?They may also invest in employer branding initiatives, advanced recruitment technologies, and competitive compensation packages to attract and retain top talent.

Conclusion

All companies are diverse and require unique, tailored solutions.??While a solution may work for one company, it may not work for another in a similar category.?Regardless of your growth stage and company type (MNC or Domestic), if you are in a committed position to determine the proper setup, answering these questions will aid in your assessment:

1. What is your company's current size, and what growth do you project in the next one to three years?
2. What strategic objectives does your company have, and how does talent acquisition align with these goals?
3. How would you describe the volume and complexity of your current and future recruitment needs?
4. Does your company have the resources and expertise to manage recruitment in-house, or would outsourcing some or all recruitment activities be more efficient and cost-effective?
5. How does your company's culture and brand influence your recruitment strategy?
6. What is the level of collaboration and alignment needed among HR, TA, and the business side in your company?
7. What is your budget for recruitment, and how can it be allocated most effectively to meet your company's talent needs?

Having in-house expertise is undoubtedly beneficial but is not always feasible or cost-effective, especially for startups and small to medium-sized businesses.?Outsourcing some or all recruitment activities can be a strategic move, allowing you to leverage the expertise of a specialized provider while freeing up your internal team to focus on core business activities.?

At ACG, we offer Modular Talent Acquisition Solutions tailored to your specific needs.?Whether you need support with sourcing candidates, managing the recruitment process, or developing a strategic talent acquisition plan, we're here to help.?Connect with us today for a free discovery session to learn more about how ACG can be your partner in driving your business forward.?

Stay tuned for more Japan Recruitment Insights from ACG next week!