HR, Recruiting, Outsourcing – Making the Case for Not Doing it All!

Let’s face it—running a small to mid-sized business requires a lot of juggling – with resources always falling a bit short, decisions have to be made about what areas of the company needs what resources. HR and in particular the recruiting function in HR is often one of the trickiest pieces of the business puzzle. While who and how a company hires is critical to their success, to do that work well requires skills and expertise that falls well outside smaller businesses core competencies. Does the request to find new ways to get more done with less sound familiar??? ??

What Exactly is Outsourcing??

Outsourcing happens any time a company or some segment of a company, hands off specific tasks or services to an outside vendor. The reasons behind outsourcing are typically to give a company access to specialized expertise that will help them either upgrade the quality of their process or improve their results. Most outsourced services are delivered based on a negotiated contract or agreement that specifies both the process to be used and the results to be achieved. The success of the decision to outsource depends on the outsourced partner to perform or produce the results “as agreed”. ?? ???

HR has a long history of using outsourced services. Typical outsourced services range from reoccurring work like a weekly or biweekly payroll, to more specialized consulting level projects like compensation surveys, benchmarking, employee satisfaction surveys, employee development services, etc.?

On the recruiting side of the HR house, outsourcing all or components of the recruiting process are also commonplace ranging anywhere from a contingent or retainer based arrangement to provide full cycle recruiting or executive search services or decisions to outsource specific steps in the recruiting process on a per hour or per piece basis.

As the private sector economy weakened over the last year, we found many small to mid-sized companies starting to explore new ways to outsource some of the details of the recruiting process, either as a way to avoid having to add more staff to the HR team or to offload some of the more time-consuming components of the recruiting process to give them more time to focus on other types of HR work that only they can do. Many outsourced solutions simply evolve out of a client and their vendor being creative about ways to expand or change the scope of the services currently being delivered as a way to address a specific challenge.

As example, we’ve recently took on a full cycle recruiting project for a client not because they were actively looking for an outsourced solution but because they described a staffing challenge that was keeping them up at night. It was a challenge that couldn’t be addressed by using a traditional fee based recruiting solution that would end up being well outside their recruiting budget. By first listening to our client’s challenge and being willing to adjust our business model to meet their unique needs, we put together a more flexible, cost-effective way for our client to get their hiring goals met by putting together a team of full cycle recruiters and sourcers who would focus on our client’s challenge on a per hour basis. It was a quick way for our client to ramp up their recruiting resources quickly. To get to that place, our client had to reveal their challenge, and we had to be creative in our willingness to find a solution that met their needs and budget. Yes, it was an opportunity for PACE to utilize our expertise in a new way – ultimately adding a new product to our service menu.

?We consider this outsourced scenario and solution a win-win. It was time limited, not forever, but made our client’s HR team look like a hero during a time when they couldn’t possibly have met their organizations goals by themselves. For PACE, this was an ideal scenario to demonstrate our focus on partnership. Sometimes is means you have access to specialized expertise you don’t have. Sometimes it means you have access to technologies you don’t have. Sometimes it means you have access to a process that you can’t replicate on your own. ? ????

Is outsourcing on your radar??

The details of any business case used to rationalize a decision to outsource varies by situation, but typically boils down to being convinced (and convincing others) that 1) your outsourced solution can deliver better results and 2) will be delivered for less money than it would take to do the same work on your own. To outsource all or a component of the recruiting process, for example, you must show how by using a third party vendor you will be able to upgrade your recruiting process in ways that will improve your hiring outcomes and that the costs of that solution would be less than what you would pay to deliver that same service using your own resources.?

Here’s the questions you need to answer when making the business case for outsourcing all or a portion of the recruiting process…..

• How will giving your team access to specialized expertise, innovation, and technologies impact your ability to be compete for top talent?
• How much would it cost to develop and maintain the same level of expertise, innovation and technologies internally? (A budget showing the relative costs of both options might be helpful.)
• Operationally, what opportunities do you see to improve your hiring outcomes? Where are you having issues hiring right or running into issues with turnover?
• What is the impact of improving your recruiting performance? What is the impact of being able to hire better candidates faster with fewer hiring mistakes?
• How scalable is your current recruiting solution? Can it easily be scaled up or down as your business grows or contracts or are there too many times where your team is either overworked or sits idle? ???
• What is the likely impact for giving you (or your team) more time to do other types of work? ?

Yes, there is a downside to outsourcing – if you chose the wrong vendor, you run the risk of over promising and under delivering. We would argue that replacing a low performing vendor with a high performing vendor is much easier than re-engineering a team with underperforming employees and outdated technology.

What recruiting tasks or functions are great targets for outsourcing?

As we think about the multiple steps involved in today’s recruiting process, we see a wide range of recruiting activities that lend themselves nicely to an outsourced solution.

• Candidate Profile Consulting – is the work that needs to be done with hiring managers to help them craft the right candidate profiles that will lead to better hiring decisions. Not all hiring managers know what attributes a preferred candidate needs to have to be successful in the role they are trying to fill or what results in a candidate’s work history are most relevant to hiring success. Helping hiring managers create effective preferred candidate profiles can have a big impact on hiring results and can be purchased on per hour ad hoc basis when you uncover a pattern of hiring mistakes.

• Candidate Sourcing – A type of outsourced services that ranges anywhere from writing compelling job postings to initiating unique candidate sourcing campaigns that allow you to dig into new candidate communities that you haven’t yet explored. Candidate sourcing services are typically charged by the hour or per qualified candidates sourced.?

• ?Candidate Screening – One of the most time-consuming components of any hiring project is the time spent on reviewing incoming resumes, making decisions about which candidates need to be contacted for further screening or evaluation. Screening services are typically purchased on a per hour or per piece basis and not only are a way to offload the more time consuming and tedious components of the recruiting process but prevents “process fatigue” which is of a source of hiring errors. Typical screening services subject to outsourcing include….Resume reviews and rankingSpecialized phone screensBehaviorally based assessmentsReference or background checking ????

• Professional Assessments. If your goal is to improve your hiring outcomes, an outsourced partner can administrate specialized skill or aptitude assessments that can be designed to anticipate how a candidate will perform on your job, in your work environment post hire. Assessment tools can often have a significant impact on hiring outcomes if administered consistently. ? ??

• The Hiring Audition. There is no amount of pre hire screening or evaluation processes that can fully replace the value of a workplace audition as a step in the hiring process. A partnership with a temporary staffing company that will facilitate that workplace audition prior to hire is one of the most valuable outsourced services offered by the staffing community. Even if you want to orchestrate your own hiring process, using a temporary staffing company to hire and assign the employee you’ve selected to a period of “audition” is one of the quickest ways to improve your track record of hiring success.?

• Full-Cycle Recruitment and Staffing – Hiring is not a simple process…and hiring right requires both time, expertise, and the right technology tools to provide direct access to the right candidate pools. Yes, most full cycle recruiting projects are fee-based services but your vendor might also provide a project based recruiting service that would deliver multiple hires on either a per hour basis or substantially discounted fee arrangement based on volume of hires. Full cycle recruiting services allows you to quickly tap into extensive candidate pools and databases filled with ready-to-work, proven talent and includes every step in the recruiting process executed at high levels.??

When should you think about outsourcing all or part of your recruiting process??

Knowing when to outsource all or a component of your recruiting process can become a key component of your hiring strategy. We encourage you to pay attention to the red or pink flags that suggest you might benefit from additional “hiring help”.?

• Do you have certain departments or even the entire company where the rate of turnover is higher than you’d like?
• Do you ever get concerned that you are not attracting the right level of talent to your organization or have the right processes in place to make hiring outcomes more predictable?
• Is your HR team overworked, or without the resources it needs to “do it all” as they are so often asked to do?
• Is your hiring process working fast enough – or is it taking too long to go from point of need to start date??
• Is some of your high impact HR work going undone because too much time is absorbed by the hiring process??
• Do you have the right recruiting technologies in place to handle the changes in the local marketplace?
• Is your recruiting work load tend to be stable or is it subject swings where you’re super busy one month and have nothing to do the next?
• Are your hiring managers complaining about how much time it takes to execute all the steps in your hiring process?

How to choose your outsourced partner?

Choosing the right outsourcing partner is all about finding a vendor who aligns with your business’s unique needs, goals, and culture. Many times that vendor is already doing business with you and is already behaving like someone who wants to be your partner – not just a vendor. You should evaluate any vendor relationship based on their understanding of your business and their ability to adapt their work to align with what’s important to you – your values, your culture. They should already feel like an extension of your team, eager to make you look good by helping you meet key business goals.?

When it comes to crafting your outsourcing agreement, transparency is key. Make sure they provide a clear scope of work, the timelines needed, and their pricing structures clear. Expectations for how you work together, communication protocols, etc. are key to a successful partnership.?

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Outsourcing pieces of your hiring process is often the best way to give your team the tools and support they need to most effectively achieve the hiring RESULTS your organization needs. While PACE is likely known as a full service staffing or recruiting organization, we have a whole menu of outsourced services called HIRING HELP that focuses on finding more cost-effective solutions for customers who don’t have room in their budget for full service fees. Employers can choose from services like candidate profiling, resume reviews, specialized candidate evaluation and skill testing services, and reference checks – all custom desiged to fit into your current recruiting process. Our service team enjoys partnering with small to mid-size local employers to find new ways to tackle the toughest hiring challenges. Finding the right talent to keep your teams competitive shouldn’t be a challenge that keeps you up at night. Contact PACE today to learn more!