The real costs of recruitment. - ContractRecruiter · RECRUITmENT PROCESS OUTSOURCING Recruitment...

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The real costs of recruitment. A GUIDE TO HELP YOU UNDERSTAND YOUR RECRUITING OPTIONS 817 Broadway, 5th floor, New York, NY 10003 • 800.797.6160 • recruitingdivision.com

Transcript of The real costs of recruitment. - ContractRecruiter · RECRUITmENT PROCESS OUTSOURCING Recruitment...

Page 1: The real costs of recruitment. - ContractRecruiter · RECRUITmENT PROCESS OUTSOURCING Recruitment Process Outsourcing (RPO) is a tactic enterprises often employ because it es-sentially

The real costs of recruitment.A GUIDE TO HELP YOU UNDERSTAND YOUR RECRUITING OPTIONS

pg 1 817 Broadway, 5th floor, New York, NY 10003 • 800.797.6160 • recruitingdivision.com

The real costs of recruitment.

A GUIDE TO HELP YOU UNDERSTAND YOUR RECRUITING OPTIONS

817 Broadway, 5th floor, New York, NY 10003 • 800.797.6160 • recruitingdivision.com

Page 2: The real costs of recruitment. - ContractRecruiter · RECRUITmENT PROCESS OUTSOURCING Recruitment Process Outsourcing (RPO) is a tactic enterprises often employ because it es-sentially

The real costs of recruitment.A GUIDE TO HELP YOU UNDERSTAND YOUR RECRUITING OPTIONS

pg 2 817 Broadway, 5th floor, New York, NY 10003 • 800.797.6160 • recruitingdivision.com

You have recruiting choices. (Now you’ll know how to make smart ones.)

The economy looks encouraging. Then it doesn’t. No one knows what conditions lay ahead. And no one has the crystal ball needed to know if and when they’ll need to hire IT talent.

What do you know?

You know at some point, you will indeed need to expand your talent pool. You know there are a variety of recruiting strategies that introduce various levels of risk and costs. You probably are also aware the real cost of recruiting extends beyond the fees you pay your recruiters.

These realities loom large:

• When important positions remain vacant, loss of productivity poses an expensive problem. Revenue is lost.

• Creating or expanding an inhouse recruiting department is costly.• Ineffective hiring processes present a serious threat to the growth of your business.

Let’s look at your recruiting options.CONTINGENCY RECRUITERS

Contingency recruiters remain a popular choice for companies with unpredictable hiring de-mands.

Pros:

• Fees are payed only when positions are filled.• When a hire does not work out, fees may be refunded.• Contingency recruiters do not task your inhouse resources.• No long-term contracts or guarantees of work are required

Cons:

• In this model, quantity of candidates tends to supersede quality.• To cover overhead, fees are generally very high, typically 20% of base salary.• Success is not guaranteed.• Not possible to hold accountable for results.

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• Won’t perform strategic tasks such as pipelining candidates and competitive re-search.

CONTRACT RECRUITERS

Contract recruiters present a viable option, particularly for companies that rather not pay place-ment fees.

Pros:

• Avoids the overhead inherent in having full-time recruiting professionals on staff.• As contractors, they can add manpower to a company’s internal recruitment staff and

can be directly managed.• Easier to on-board then full-time recruiters.

Cons:

• Costs involved include supplying tools and resources, desks, phones, etc.• A contract recruiter may excel at some requisitions, but struggle with others.• Your favorite contract recruiter will in all likelihood not be available at the times when

you need to bring them back. • You cannot dramatically decrease or increase their weekly hours from one week to

the next.

RECRUITmENT PROCESS OUTSOURCING

Recruitment Process Outsourcing (RPO) is a tactic enterprises often employ because it es-sentially expands the company’s recruiting power. The RPO model differs from the traditional contract recruiter or staffing service in that it assumes ownership of the entire process including the technologies and methodologies used.

Pros:

• Acts as a true extension of the company’s staff.• RPO can be highly cost-effective.• Service level agreements (SLAs) can help ensure deliverables are met.

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Cons:

• Implementation is costly and requires months of groundwork.• Companies are reluctant to hand over such total control of the recruiting process.

ON-DEmAND RECRUITmENT PROCESS OUTSOURCING

Recently, Recruitment Process Outsourcing (RPO) has been offered as a flexible on-demand service based on a simple hourly rate fee structure. Services are provided as needed and only when needed. Like the traditional RPO model, this approach expands the company’s recruit-ing power, but does not take control of the entire process.

Pros:

• Easy to start and stop—without disrupting existing operations. • When hiring needs decline, services are suspended, however, the client/vendor rela-

tionship remains intact ready to satisfy future needs.• Contingency-based placement fees are eliminated.• Potential to reduce cost/hire by as much as 50%. • No upfront investment in resources is required. Neither are there early termination

fees. • No infrastructure expenses or overhead are incurred.• Recruiting team has access to a flexible array of technology tools and recruitment

strategies. • Recruiters can draw on large databases of potential employees. • Can be engaged for strategic tasks such as candidate pipelining, competitive re-

search and salary surveys.• Practical and highly scalable solution for companies of all sizes.

Cons:

• Your on-demand RPO team will not operate on your physical site.• The hourly rate begins upon the initiation of a hiring project and success is not guar-

anteed.• On-demand RPOs may sometimes subcontract work to third-party offshore recruit-

ers.

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Make a smart selection.If you choose to engage an on-demand RPO, consider asking the following questions and evaluate the answers to help make a smart selection.

1. How much industry experience is offered?2. How large is the candidate supply pool?3. Does the company have expertise in volume hires? 4. Does the company have the capacity to scale?5. Will the recruiting team use its own resources?6. How up-to-date are the provider’s tools, processes, and technologies?

Meet The Recruiting DivisionA on-demand RPO, The Recruiting Division allows its clients to implement programs with zero upfront costs and without disrupting your current operation.

You can begin, end, or pause, an engagement at any time. Our goal is to deliver the perfor-mance, scalability and cost-effectiveness of an RPO, but with greater flexibility.