The global economy has changed, making recruiting and hiring the right candidates a lot more difficult. New economic conditions include global competition, lightning fast changing business conditions, high unemployment, skills shortages, and a war for talent. Finding and hiring the right people in this kind of recruiting environment requires keeping up with new recruiting technology and social media, developing relationships with successful candidates, and asking the right questions. Busy hiring managers and employers achieve all that when they outsource recruiting.
Cost containment and the need to focus on core business operations are at the top of the list of several common reasons to outsource recruiting. Outsourcing all of your recruiting or just part of your recruitment process puts the reins in the hands of experienced recruitment consultants, saving you time and money. Other reasons employers choose to outsource recruiting include a need to improve recruiting processes, reduce a high turnover rate, control rapid growth or seasonality that makes it impossible to keep up with hiring needs, develop competitive advantage, and coordinate recruiting and on-boarding .
1. Reduce Costs
In a volatile economy, reducing costs rises to the top of the to-do list quickly. Besides labor costs, the costs related to recruiting activities include advertising on job boards, background screening, applicant tracking systems, and recruiting technology. These costs are all rolled into one when companies outsource recruiting. And it’s usually less than trying to conduct an effective recruiting campaign in-house.
Cost-per-hire is a key HR metric and when companies outsource recruiting to an RPO, cost-per-hire is often reduced along with time-to-hire because of dedicated recruiting resources. Other ways costs get reduced through outsourced recruiting include shared risk and streamlined processes. Passing the responsibility of expanded or shrinking recruiting needs to a dedicated outsourced recruiter eliminates employing unnecessary staff for recruiting or being short of staff when business spikes. When employers outsource recruiting, they streamline recruiting processes by assigning them to an outside firm (ideally an RPO), eliminating delays ad duplication of tasks, and paying for specific recruiting activities.
2. Focus on Core Business
Whether or not a company has a dedicated recruiter or some kind of recruiting function, most are not in the recruiting industry. Any recruiting tasks and activities will be outside of the core business functions and take resources from core business operations. When the recruiting process is outsourced to recruiting specialists, it doesn’t take anything away from core business activities and enables employers to find the talent they need without distractions from business operations.
Human resources staff with recruiting responsibilities can quickly become overwhelmed with recruiting volume and unable to focus on their core HR responsibilities. When this happens, it can have a ripple effect, interfering with human resources productivity and workflows and their ability to provide service for benefits, payroll, compliance, and employee programs.
3. Improve Recruiting Effectiveness
With a competitive global job market, ongoing skills shortage, and limited locations for recruiting, it’s difficult for many organizations to find qualified candidates or improve their recruiting effectiveness with in-house recruiting. They may not be able to achieve recruiting process improvements with existing staff and when urgent recruiting needs start to back up, there is no good way to get caught up with hiring. When they outsource recruiting, they benefit from recruiting firms’ ability to reach more candidates, access passive candidates that they may not otherwise be able to engage, and realize more efficient use of recruiting resources.
4. A High Turnover Rate
High turnover costs money in lost and interrupted productivity, lower customer service, and lower employee engagement. But turnover may have less to do with recruiting staff abilities or compensation and more to do with the recruiting function. Companies can address high turnover when they outsource recruiting to get better qualified candidates, and a better recruiting process from experienced, dedicated recruiters. Companies enjoy higher quality hires of candidates who are vetted and well-matched to the company’s openings and culture. When ongoing high turnover starts to strain a company’s resources, the decision to outsource can be a quicker, cheaper way to stop recruiting-related turnover.
5. Rapid Growth
Companies experiencing rapid growth or seasonal spikes that make it difficult to meet recruiting needs often outsource recruiting to better control fluctuating recruiting activity’s impact on the business. Seasonal recruiting or periods of rapid growth or expansion strain existing staff and make in-house recruiting a huge challenge. Outside recruiting firms can take over an internal recruiting process with dedicated staff, more experienced recruiters, advanced recruiting technology, and social recruiting methods to meet unusual growth patterns.
6. Competitive Advantage
Small companies and start-ups that don’t have the same resources as their larger competitors can compete better when they outsource recruiting. A recruiting firm can more quickly and efficiently find top candidates to help small or new companies build their key staff and keep up with larger companies with more resources.
7. Coordinate Recruiting and On-boarding
Companies with disjointed recruiting and on-boarding processes can benefit from the services that outsourced recruiting firms provide to integrate sourcing, recruiting, hiring, and on-boarding. When one department is recruiting, the hiring manager is responsible for hiring, and the human resources staff performs on-boarding, interruptions in candidate experience and recruiting efficiencies can cause problems in other areas of the company. Productivity and turnover are among the first business areas to suffer when recruiting and on-boarding processes aren’t working.
When companies outsource recruiting, it’s usually in direct response to specific business needs. Whether it’s to save money, achieve process improvements, reduce turnover, or control an issue of recruiting volume, there are many situations where outsourcing the recruiting process, and possibly on-boarding processes as well, solves business problems. Recruiting firms can dedicate their time and resources to sourcing, engaging, contacting, hiring, and on-boarding top talent that is beyond the reach of small or new companies. Companies can better focus on their core business operations when they are well-staffed with qualified, engaged employees who have been hired with a good recruiting process. Outsourcing recruiting allows companies to meet their recruiting needs without causing other business problems.