When Recruitment Outsourcing Fails

Last week I read a blog that stated recruitment outsourcing has increased 4.5% this year.  This is after a year of many recruitment outsourcers failing, restructuring or redefining how they do business.  On the corporate side, this is no different.  What lends to the confusion is as a buyer you have many choices around what you get to outsource when it comes to recruiting.  You can outsource: Sourcing, Screening, an entire process, vendor management, contingent workforce processes or a blending of each of these.  As a provider of these services, you get to chose what your offering is, what is the market you are targeting and how you are going to sell best practices?

Each of these worlds are colliding quickly, both wanting to solve a problem and succeed at the need.  Yet buyers of these services need to understand why these services fail and adequately prepare for success.  Sellers of services know your strengths and honor them.  Your business will grow as a result.

So when does recruitment outsourcing fail. I will break this down from the buyer and seller perspective to provide some level of clarity and scope.

Buyers:

1.  Not preparing clarity in understanding of the process and how organizational culture and stakeholders impact the success. One of my favorite clients was a company that was in need of hiring sales executives. Their desire was to outsource the entire sales recruiting process.  This process was also a huge source of pain for the HR leadership, because the organization had an unrealistically high bar for what they determined was “qualified talent”.  This was compounded by a culture of change, where their competitors were paying more and seeking less and managers inside the company were just beginning to understand the impact.

During the first presentation, our team solutioned a thoughtful process that we were hoping to deploy with some caveats around what we did not know.  We presented a dashboard that clearly articulated how we would monitor this from a metrics perspective.

The truth of this situation was, the RFP asked for capabilities yet it was void of the cultural and data related details that would lead us to success.  The client came back to us and shared the limitations and the outcome resulted in a more expensive solution, higher level recruiters, clearer defined operational metrics and a higher touch process.  This was not the going in approach.

Learning’s  to prevent a solution from failing: The culture and current state assessment of an organization is important to provide the providers you select, so they can adequately design a solution that encompasses the right process, the right level of recruiters and operational metrics to manage the effectiveness.

Solely focusing on a low price solution, would have resulted in the RPO to deploy a transactional process that is supported by lower level recruiters. This process would have failed, because they needed a higher level of recruiter to consult with both candidates and hiring managers.

Due to the complexity inside the organization, performance and ramp up expectations needed to be adequately discussed to manage everyone’s expectations.

Just because the process is similar, HOW this process is executed will vary depending upon culture, technology, organizational complexity and volumes required.

2.  Outsourcing parts of the process, the more changes of hands the greater the risk. Another area of recruitment that is commonly outsourced is the sourcing and screening, than the provider hands off the candidates to the internal recruiter.  There are organizations such as Hirevelocity and Talenrise that take on these types of project sourcing and recruitment initiatives.   The recruitment outsourcing term associated with this service is commonly known as QAI or qualified and interested.

These types of firms get engaged when someone says “we need more qualified talent”.  There are two methods of response.  1st method is assessing WHY and looking at the data to see if it is a talent volume issue, talent quality issue or a recruitment process issue.  2nd method which I see more is throw more bodies at it.  This method has a higher degree of failure, because the current state process has not been analyzed.   Let’s provide some insight around how this may fail:

1. The buyer does not provide the outsourcer access to their ATS system and does not count talent that is already inside the technology.

2. What is determined as qualified by hiring managers is not clearly articulated and described in the requisition process.

3. The provider hands off to the internal recruiter and either the internal recruiter perceive the external provider is not providing enough or the external provider perceives the recruiter to not taking action on the QAI candidates.

4. No project oversight to monitor the data in the process to refine the program and the roles each party plays.

5.  Compliance risk – such that the provider has limited access into the system and candidate cannot be tracked or appropriately dispositioned.

6.  The company has the provider submit candidates through the search firm portal to track candidates and it confuses the business process that is already in play.

Now that I have provided some insight around how the buyers can impact the success, let’s talk about the providers.

Providers

I worked with some solutions architects who came out of HRO as well as Contingent Workforce Management.  The processes deployed as the majority in both situations are transactional. There is not much gray matter in the Business Process Layer when it comes to deploying full time recruitment solutions.  The word “depends” or the phrase “it depends upon the situation” does not come up as much as “it depends upon the industry section – which typically drives its own set of nuances.

The failure point is the provider or the solutions consultants with these providers would present all solutions as transactional processing.  Technology would be configured to handling the masses and the process would have desk level procedures that can be handed off to unskilled but highly trained workers.  Their solutions tended to miss the nuances of industry, position type and level, more complex processes to include: professional, college, retiree, alumni and the associated vendor support that is needed to effectively attract this type of talent.  Finally the pricing was lower than what is needed to deliver an effective solution.

The issue:

1.  The solution sales team did not have enough knowledge of the variety of processes and a true understanding of how these processes break.

2. They priced the solution lower than what it costs to deliver, therefore impacting the delivery quality and creating turnover in the team.

3. The focus was too much on the technology solving the problem vs. understanding how people, process and technology need to interact.

4. Limited focus on the compliance requirements that naturally slow down or create inefficiencies in a recruitment process.

5. Focus is on selling a deal cheap, winning it, than fixing it later.  Everyone loses.

We all want to see recruitment outsourcing succeed, because it makes good business sense.  As a matter of fact, it creates job security for everyone engaged because there are choices in career paths. However buyers, know what you need and how it impacts what you are buying.  Recruitment outsourcing is more than just transactional processing therefore it makes it the most misunderstood solution in the industry today. Sellers of services hire really good solution consultants and train the sales people.   The reality is: recruiting is a people process that has a technological backbone. As long as we have people impacting the effectiveness of the process then it will never be transactional only, it will constantly need to be assessed and refined.

Tracey Friend, tfriend@brightfieldstrategies.com , Snr Consultant

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