RPOA Blog

When starting the recruitment process determining how much exactly your cost per hire will be is an important factor but so is your quality of hire. The wrong hiring decisions will wind up costing your company even more. With the current state of economy it is important that you are able to take the time and effort to hire top talent that will add value to your company while doing so at an affordable cost. Calculating this cost will vary depending on the way you choose to approach it.

Some companies choose to have their in house HR department in total control of recruiting. They are in charge of taking care of every task in the process and in addition the company is faced with a number of costs associated with recruitment. Some of the important factors to take into consideration when calculating cost per hire with this approach are:

• · Job fairs, college recruitment, advertising, and job board posting and  
    access costs.
• · Hardware that needs to be added in for candidate screening, from  
    computers, to resume search programs and phones
• · The costs associated with marketing open positions
• · All training, on boarding and turnover expenses
• · Travel costs
• · Recruiters and managers salaries

HR departments are often faced with a heavy work load and the recruitment process demands a lot of invested time in order to find the best candidates for each position. In order to allow them to focus on their core responsibilities that will continue to keep the business moving forward, a company often chooses to outsource their recruiting. They do so through either a contingency or recruitment process outsourcing (RPO) agency. With a contingency recruiter they charge nothing until the position is filled but many find that this approach can be expensive for their company, costing anywhere from 15-30 percent of those hired salaries.

The companies who chose to partner with an RPO agency have found that they are able to get ahead of the competition using the specialists with the experience and the tools to find the best candidates to fill their positions. A 2009 study conducted by the Aberdeen Group found that 62 percent of the organizations that they surveyed who had used this outsourcing approach were able to significantly reduce their cost per hire while hiring valuable candidates for their company. RPO providers, such as Hire Velocity, have the ability to drive down recruiting costs for companies by as much as 50 percent. As an RPO agency Hire Velocity offers to do as much or as little of the recruitment process companies they partner with need. The Aberdeen Group study of roughly 200 companies also revealed that 77 percent of those who were using RPO were happy with the results and would recommend it to others. Outsourcing with an RPO agency provides results of hiring quality candidates that will add value to your company as well as have results that will significantly reduce cost per hire.

The Bureau of Labor Statistics (BLS) release of July’s job report today revealed surprising numbers that shed some relief after a long week of trouble in the market and fears of recession. Economists had predicted that we would see about 85,000 jobs added for the month of July but today’s report came out with unexpected higher results. The U.S added 117,000 jobs compared to the 18,000 added in June. The results could have even been higher had they not been affected by a loss of 37,000 government jobs as a result of recent budget shortfalls.

Private employers ramped up their hiring the most based on the results from the BLS report.  Business and professional services as well as retailers, hospitality and manufacturing all increased their hiring bringing the unemployment rate from 9.2 percent in June to 9.1 percent in July. Not only were more jobs added in these sectors but hourly wages also increased, bringing even more good news in the report. They rose up .4 percent, doubling what numbers were predicted previously. With July’s increase in jobs and hourly wage increase the report shows hope that these factors could help to put money back into the struggling economy by increasing consumer spending.

July’s job report comes out much better than expected and couldn’t have been released at a better time. After a rough week in the market and previous months of extremely low job reports the high number shows positive improvement for the future of the economy. Economists still say though that the number isn’t quite yet where it needs to be. More jobs need to continue to be added in order to keep up with the growing population, and many still fear that if the economy doesn’t improve soon that the U.S could ultimately fall back into a recession.

Over the past few years, the popularity of social media has continued to increase. Not only are well known sites like Facebook and LinkedIn expanding with each new active user, but entirely new social networking sites continue to be created. These websites have evolved from their original purpose as a social connector with friends, to a valuable tool in a company’s recruitment process. Recruiters have been learning more ways to strategically use these sites in getting ahead of the competition, but in doing so they can find themselves at risk of legal question in comparing the information accessed online in relation to their hiring decisions.

A simple Google search of a candidate’s name or a visit to their Facebook and LinkedIn page can reveal a lot about the person, providing an inside look into their life that you normally wouldn’t see on traditional job applications and resumes. In a January 2010 report released by Microsoft, 79 percent of those hiring managers they had surveyed used social media and online searches in their hiring, and of those, 70 percent had actually chosen to reject candidates because of the information that they had found. Knowing how to use these websites efficiently without accessing information that could lead to possible discrimination claims is crucial in the hiring process. With all of the available information at your fingertips, it is important that when choosing to integrate social networking sites in the screening of a candidate that the search remains relevant and nondiscriminatory. Recruitment agencies that set up a policy to follow standards set up by organizations such as the Fair Credit Reporting Act for screening candidates will have effective results. They also will avoid any future legal question that could arise finding that them guilty of violating laws such as the Title VII of the Civil Rights Act or others created to prevent discrimination in hiring.

In order to keep recruiting fair and avoid any question of a hiring decision there are a few key things to remember and techniques to have in place before searching the web. Establishing a strong recruitment policy along with prior education of these guidelines to those in charge of screening candidates (preferably someone who is not making the hiring decisions) is important. Making sure that these policies include what information can and cannot be included in making hiring decisions is vital in addition to creating a set list of what websites are to be used in accessing this information. Using social media to look into one candidate and not others puts recruiters in a questionable situation.  If  you choose to use social media to look into one candidate, it’s important that it is done with all others as well. Lastly, keeping documentation of all information to reference back to what was used in the recruitment process will be greatly beneficial to the company should any questions arise.

Social media is very valuable in the recruitment process when used correctly and integrated along with other screening tools. It has the ability to locate a large amount of possible candidates as well as provide valuable information. Those recruiters who are able to keep up with consistently changing social networking trends and have a strong knowledge of how to navigate these sites, position themselves above others; finding the best candidates possible, while staying clear of any potential discrimination claims.

With Passive Candidate Development, the recruiter directly sources talent from those currently employed and not actively in the job search process. Passive Candidate Development, also known as direct sourcing, focuses on finding qualified candidates currently in management positions from a list of targeted competitors. Once a list of names has been generated, candidates are identified and cold calls are made to each target candidate presenting the job opportunity. When the process is complete, qualified, available, and interested candidates are found to enrich a company’s talent pool. Sourcing specifically those passive candidates using this service will takes more time as candidates must be convinced to leave their current position. Using an RPO for Passive Candidate Development can take the time consuming and stressful pressure of the recruitment process off of the internal recruiters and Hiring Managers. This service has the unique ability to provide an organization with a higher caliber of skilled and qualified candidates than the company would normally come across with other forms of sourcing. With a focus on finding candidates currently employed in similar positions, this approach can find a diverse list of candidates within a similar industry and geographic area.

At Hire Velocity, we have had extensive experience using Passive Candidate Development for leading companies. Over just an eight-week period we were able to target 6,000 names, leading to 9 hires for a leading global management consulting firm. This significantly reduced their cost per hire, saving them about $8,000. Many benefits come with choosing to use Passive Candidate Development. Costs for high priced executive search fees can be reduced and new pipelines can be built with these types of candidates. This service results in a higher quality of hire and because of their specialization in the field, these candidates require minimal training.

         When it comes to the hiring process, there are a number of situations that can unnecessarily complicate the process. If you’re burdened with more recruiting work than you can efficiently handle, outsourcing the tasks to a Full Life Cycle Recruiter may be the solution for you.  Why burden yourself with managing the entire process and all of the tools when a Full Life Cycle Recruiter can do that much more efficiently for you.  With Full Life Cycle Recruiting you are allowing specialists, who are backed with advanced technology and tools, to assist your business in reaching its ultimate potential. To adequately access the most qualified candidates, it takes money, time and often results in stress. Many of the recruiting tasks are very routine in nature while some are much more strategic and complex.  With Full Life Cycle Recruiting, not only are posting and agency fees reduced but you can also reduce your cost per hire. Without the stress and time spent on trying to find the right candidate, your Hiring Manager will be able to focus their efforts on their core job and on projects more strategic to your company.

The service will handle the entire hiring process for you from job description creation to sourcing, phone screening, interview scheduling, offer management, employment screening and even onboarding. Your entire hiring productivity will be increased, while also reducing costs and time wasted. Hire Velocity offers the Full Life Cycle Recruiting service that will give your business confidence in obtaining the most qualified candidates to join your team. Let us assist you with your repetitive recruiting tasks while you focus on the bigger company issues.  At Hire Velocity we were able to within a five month period assist a major department store in hiring 400 department, store, and division managers.

The Full Life Cycle Recruiting service can be managed virtually or on-site. With either, the main focus will be what is best for your business.  The end goal is to improve your productivity while saving you time and money in the delivery of quality hires.

 New lines of work are being created to fit consumers’ lifestyles.  By the year 2018, economists anticipate that over 1 million jobs will be added into the workforce. We are already seeing changes in hiring as technology advances. The title of a social media specialist, something that was previously non-existent, now plays a major role in running a successful business. Massage therapist and other jobs in areas that help to fulfill a healthier lifestyle rank among the top job fields with a wide variety of job opportunities in the medical field.

This shows positive signs for the recent graduates who will have an advantage with the latest knowledge in these emerging areas as they start their career.  It’s also good news for  anyone else looking to make a career change. Most of these new jobs will require only unique training for the position, as opposed to having to go back to school to work towards a particular degree.

“Looking for a growing job sector?try social media, accounting, or massage”. Associated Pres (2011) Web. June 2011 <http://www.boston.com/business/personalfinance/articles/2011/06/08/looking_for_
a_growing_job_sector_try_social_media_accounting_or_massage/>

A recent survey has found that companies are having a tough time finding employees that have the right qualifications to hire for their most critical positions. Lack of experience and technical skills, were highlighted as the major reasons why roughly 52 percent of U.S companies have found themselves in a difficult position when it comes hiring.

As the economy continues to improve and the market is getting more competitive, not only are employers increasing their hiring, but the role of finding the most qualified candidate for the position has become more crucial then ever. Recruitment Process Outsourcing (RPO) is something that should be considered in ramping up hiring efforts. RPO is able to give companies that step up above the competition. Through the use of various tools and strategies an RPO provider can find the most qualified candidates fast and effectively for critical jobs such as skilled trades, engineers and IT staff that have been found as the hardest to fill. In a previous blog An RPO SWOT Analysiswe discussed the importance of choosing the right RPO provider. It’s important that when making this decision a company takes into consideration the different aspects mentioned in this analysis. Choosing a provider that is able to meet a company’s needs will present them with qualified candidates to hire for these hard to fill job positions

Cogliano, J. (2011, May 20). Employers struggle to fill critical jobs. Austin Business Journal, Retrieved from http://www.bizjournals.com/austin/news/2011/05/20/employers-struggle-to-fill-critical-jobs.html?ana=e_vert

The Labor Department reported that there were more advertised job openings in February than any time in the past two years. This trend is expected to continue throughout April, signaling a positive change in the economy. There were 3.1 million job openings posted in February, an increase of more than 350,000 since January. The outlook is good with the unemployment rate falling to 8.8, the lowest in two years. While there is still fierce competition for open positions, the decrease in unemployment and increase in job openings is evidence that the climate is starting to improve.

What is causing this increase in open jobs? More people are quitting their jobs, presumably to take positions elsewhere. Additionally, layoffs are near the slowest in ten years. Another reason for the increase in open positions is that consumers are starting to gain more confidence in the economy. The increase in retail spending creates more open positions. The increase in confidence can be seen when looking at the 11% increase in sales at Saks Inc and 14% gain from Limited Brands.

Rugaber, Christopher. “Fast Rise in Job Openings Brightens Hiring Outlook.” ABC News(2011): n. pag. Web. 18 Apr 2011. <http://abcnews.go.com/Business/wireStory?id=13368462&page=2>.