Casually leafing through some older articles on last year’s Outsourcing Industry reports inspired me to put pen to paper (or rather fingers to keys).
2015 was a great year for outsourcing of HR functions. According to the Quarterly Outsourcing Index, carried out by industry analyst Nelson Hall, total UK HR outsourcing spend in the first three-quarters of 2015 alone was 50% up on the value of deals signed in the whole of 2014.
HR's share of all UK outsourcing in 2015 provided a very healthy picture of the state of the industry. Almost a quarter (24%) of all outsourcing deals signed between January and September 2015 were HR contracts. Demonstrating growth in the sector but also the importance of the recruitment and HR function.
There are probably many reasons for this. I think the top three are:-
1 - A desire for greater reach and speed – You want a partner with excellent reach to find the right candidates quickly – but no shortcuts!
2 - Need for better peer profiling – You want candidates profiling by subject matter experts. Someone who has performed the role you are looking to fill is the best person to recruit someone to deliver in that role. That means a Project Manager interviewing a Project Manager, and a Sales Director interviewing for a sales role.
3 - Commercial Simplicity - You want a simple and fair commercial model, even sharing risk with your partner. Partners confident in finding you the right candidate will even let you spread payments over the first year of their employment.
If you are considering moving your IT recruitment 'out of house', there are huge benefits to be gained, not least the three mentioned above but there is one golden rule I would advise you to never, ever, break.
GOLDEN RULE| Your outsourced recruitment and HR function should be tightly aligned with to your business culture, your business strategy and the needs of your customers to leverage the greatest value gain for your business.
Copy/paste it, write it in your diary, scribble it on a post-it and attach it to your desktop PC - whatever - but always stick to it. Always.
And here are three great habits to get into that will help you keep to the golden rule:-
1 - Always start the recruitment process with your business goals in mind. Know your USP, how you win in the marketplace and what your strategic mission is. Then identify how your talent helps achieve this. When you know your organisation's biggest objectives and you align your talent search to them you become a very potent and efficient recruiter. Make sure that your partner gets you goals too and how you work.
2 - Benchmark your success against this measure rather than distracting external 'best practices'. Focus less on how well your recruitment compares with others in measures such as 'cost per hire' and more on how well it delivers on providing talent to achieve your business goals. When Bersin by Deloitte researched this in the United States they found companies with developed talent recruitment functions often have a greater cost per hire - so less efficient, right? Apparently not, because they also fill their vacancies more quickly and with the right candidate reducing early talent turnover and operational disruption.
3 - Look for lessons YOU learned elsewhere. When you outsourced other transformational functions, like IT Project Management for example, what went well and where did you steer off course? Specific knowledge about how your organisation interacted with external service providers in other areas is powerful. Look for 'low hanging fruit' - can your IT partner (the people who delivered transformational IT Projects) help you recruit your next Project Manager, for example.
Truth is, from attracting talent to retaining and developing them, HR is a business critical function. Deciding to outsource all or part of it is a huge step that could cost you dearly or reward you richly.
These Nelson Hall figures show that more and businesses are seeing the value in looking beyond their tried and tested recruitment methodologies.
Choosing your partner well and aligning your recruitment function with your business strategy will ensure that you yield the rich rewards you deserve.
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