Should You Outsource Your Sourcing? 5 Tips for Success

Even though we are in an economic down cycle and unemployment in the U.S. is hovering around 10%, recruiters are still struggling to find people with the skills and experience their hiring managers are looking for.

Partly this is driven by the commonly held assumption that these skilled and experienced people have been affected by the recession and are actually in the job market. Recruiters know this is not the case and that many candidates have become even more difficult to find and entice away from a secure position.

While demand for lesser-experienced, educated, and skilled candidates has slacked, it has risen for those with higher-level skills. Many firms are trying to replace the employees they had with moderate skills or who were in learning roles, with people already accomplished in their profession.

This is a poor time to be an apprentice or a mid-level worker, as the focus is on paying a bit more for people with better skills who are more capable of achieving goals with minimal help right away.

This has put a huge burden on recruiters. It has increased the number of searches needed for the hard-to-find candidates while almost eliminating the need to source for the easier-to-find positions. This, in turn, has driven recruiting leaders to take a hard look at developing specialized internal sourcing functions or finding an outside firm or individuals to do it for them.

Things to Consider

Before deciding whether to keep sourcing inside or find an external provider, a recruiting leader needs to make sure they have answered three questions carefully: (1) is there a sufficient volume of need that will last over some period of time to justify focused sourcing, (2) do you need to simply have the names and contact information of potential candidates so that a recruiter can screen and assess them, or do you also need screening and assessment or even more than that, and (3) do you have the internal staff with the capability, knowledge, and bandwidth to be effective?

If there is an ongoing need and you lack staff, looking at an outsourcing provider might be both time and cost effective. Building an internal sourcing capability can take months of training in addition to the time needed to find recruiters with the needed skills. Many firms turn to contractors for this service, and that may make sense. Contractors are often local, may be very familiar with your organization and both its culture and skill needs, and work for a reasonable fee. However, they also often increase the leader’s workload significantly.

When sourcing needs are high, timelines are short, needs varied and changing, and the skills hard to find locally, then other solutions may be better.

What Kind of Outsourcing Do You Need?

There are three types of outsourcing:

  1. Generating names of potential candidates, often called research, which results in a list of names and contact information. These may turn out to be viable candidates, but many will not. All screening and assessment is made by internal recruiters and hiring managers. Results are most likely measured by how many names were generated, how quickly it was done, and how closely they met the previously-agreed-to specifications.
  2. Generating names and then screening and assessing them. This usually means that only candidates who meet certain qualifications are presented. Results are measured by how many qualified candidates are presented and by the speed with which this takes place.
  3. An emerging type of sourcing involves all of the above but also includes developing and managing a proprietary talent community of qualified candidates. This might include frequent communication with candidates, setting up and maintaining a Facebook page or something similar, and providing a means for internal recruiters and perhaps hiring managers to communicate with candidates.

Tips for Outsourcing Success

Clarity and Transparency: You need to have a clear strategy that outlines how sourcing fits into your overall success, where it is most needed, and be very open about why you are seeking an outside source.

Know which of the three types of outsourcing above you are primarily interested in: Obviously that choice will affect which outsource partner to use and will impact what level of relationship you need to have. Names generation can be performed by individual contractors and they can be located almost anywhere. The major choice criteria are ability to find the people you are looking for and the speed they can do it. Other sourcing arrangements are more complex; often need face-to-face contact at some point; and require a more sophisticated level of negotiation.

Choose an appropriate partner: Many times I see recruiting leaders choosing outsourcing partners without full knowledge of how deep their skills go or what their previous clients thought about them. You need to get references, spend time making sure their expertise matches your needs, and perhaps even start with a trial to see how they perform. You also need to make sure they can grow with your needs and fit your corporate culture.

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Define your service level expectations: Work with your outsourcing partners to write down a set of expected performance levels, including time to find candidates, how many need to be presented, and what constitutes quality. Defining what a quality candidate is often becomes the most difficult aspect of a relationship. Take the time to be sure the definition is clear and how it will be measured is agreed to by the hiring manager, the outsourcing provider, and yourself.

Establish a vendor relationship manager: Relationships don’t just happen, and they are far more than a contract. Good communication, access to hiring managers when needed, and a willingness to negotiate through difficult issues are necessary components of any successful relationship.

Having a single person who acts as the account manager with the outsource provider is the best way to begin building a long-term-success model. When I speak with parties to failed outsourcing arrangements, lack of communication and difficulty to get issues resolved are significant factors.

Develop conflict resolution processes: Be sure to set up some informal and formal ways for conflicts, disagreements, and uncertainties to be addressed. This can be through the vendor relationship manager or through a committee or other body that is set up to deal with conflicts. The more defined this process is, the better it will be. It should answer questions such as: when is a conflict at the level of needed more formal resolution, how is a complaint raised, and whose decision is final.

Allow access to hiring managers and other key employees: Make sure you allow an appropriate level of direct interaction between the outsource team and the hiring managers. After all, the goal should be finding and placing a quality candidate, not about internal power struggles and politics.

There are many success stories, and all of them are because these basic steps were followed.

reposted with permission from ERE.net

Kevin Wheeler is a globally known speaker, author, futurist, and consultant in talent management, human capital acquisition and learning & development. He has founded a number of organizations including the Future of Talent Institute, Global Learning Resources, Inc. and the Australasian Talent Conference, Ltd. He hosts Future of Talent Retreats in the U.S., Europe, and Australia. He writes frequently on LinkedIn, is a columnist for ERE.net, keynotes, and speaks at conferences and events globally, and advises firms on talent strategy. He has authored two books and hundreds of articles and white papers. He has a new book on recruiting that will be out in late summer of 2016. Prior to his current work, he had a 20+year corporate career in several San Francisco area tech and financial service firms. He has also been on the faculty of San Francisco State University and the University of San Francisco. He can be reached at kwheeler@futureoftalent.org.

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4 Comments on “Should You Outsource Your Sourcing? 5 Tips for Success

  1. The continued economic insecurity is fuelling the upward trend in outsourced model and this seems to be particularly true for recruitment function and human resource
    outsourcing.

    Many
    companies, forced to slash overhead and generate more revenue from their
    primary products or services, now have a better understanding of what functions
    are core to their success and which are context.

    Payroll
    processing is context, for example, because it is a common and necessary
    function across all companies. No matter how well payroll is processed, it
    gives the company no competitive advantage. Similarly, hiring top-performers is
    core, but the process to find, recruit and manage the function is context.
    Companies use the same antiquated methods, job boards, applicant tracking
    systems and people. Outsourcing the Sourcing represents a departure from these
    traditional options, but finding, selecting and managing the right one for your
    company may be challenging.

    Outsourcing
    of the generalist functions, including payroll, benefits administration and
    employee relations, has considerable momentum today. The recruitment function, however,
    is now taking the lead

    Outsourcing
    the sourcing is a growing practice and defined as a specialized service that
    allows clients to outsource some or all of the recruitment function. In the
    Outsourcing the Sourcing function the provider leverages the combination of
    strategy, technology, resources and vendor management to improve the
    recruitment process. Operating as the client’s internal recruitment function
    and strategic partner

    At Fiddich
    Consulting we work closely with the client to improve the recruitment
    efficiencies of quality of hire, speed of delivery and cost containment. The
    end-to-end recruitment process for many companies encompasses more than just
    the sourcing and on boarding of resources. It consists of three key elements
    designed to build and sustain a robust talent pool. These are workforce
    planning, talent acquisition and engagement and ongoing talent management.

    Why Outsourcing the Sourcing?

    Organisations
    outsource recruitment and hiring practices for many different reasons. According
    to a recent Survey, three business priorities, they are:

    “Executing
    business strategy”, “reducing operating costs” and “recruiting, retaining and
    developing a great workforce”. All of these have shaped the needs and triggers
    for the adoption of Outsourced Sourcing Model

    Key Benefits of Fiddich Consulting
    Outsourced Sourcing Model

    Any
    evaluation of whether to outsource must begin with a clear understanding of the
    intended benefits and how the features of an outsourcing company will generate
    the benefit. This is important to ensure the benefits can be monitored and
    managed.

    To maximise
    the overall value of outsourcing, the cause and effect logic must constantly be
    applied. At Fiddich Consulting we provide features.

    Access to a wider talent

    One of the
    key drivers for outsourcing the recruitment process is to improve access to
    talent. An outsourcing provider should be able to demonstrate the ability to
    attract a larger pool of quality candidates for an organisation over their
    internal recruitment team. At Fiddich Consulting we have a comprehensive range
    of attraction channels which reach a wide pool of talent. This is due to the
    frequency we undertake talent acquisition for multiple clients and build
    comprehensive databases of active and passive candidates.

    Continues innovation and increased
    expertise

    Organisations
    looking to outsource their sourcing function often look for a provider to help
    them enhance their employment brand and value proposition as well as offer
    innovative talent acquisition and mobility strategies.

    The
    demographics of the general workforce are complex and a major impact to hiring
    top talent. There are currently different distinct generations working together
    making up a workforce that have a wide range of ideas and motivations. In
    addition, workforce demographics are constantly changing which can
    significantly impact talent acquisition and management success. Many
    organisations look to their sourcing providers to assist them in navigating
    this confusing and ever changing landscape by utilising their market insight
    and strategic recommendations to help them stay ahead of the curve.

    Improved supplier management and process

    Another
    significant benefit organisations look to achieve by outsourcing recruitment
    process is the efficiencies and cost savings gained from the transfer of
    supplier management.

    At Fiddich
    Consulting we enhance the outcomes by assisting organisations in achieving the
    optimal recruitment supplier structure for their business.

    Sourcing
    providers should also be able to assist organisations to identify recruitment
    process pain points and recommend improvement initiatives. Outcomes from
    improved process management can be measured against service level agreements
    such as time to fill, quality of hire and candidate satisfaction.

    Half the cost half the time

    Whilst cost
    is not the primary factor driving many organisations to outsource it is
    certainly an important consideration especially in this economic climate.
    Industry data suggests that savings of 15-25% per hire are achieved from
    successful outsourced sourcing adoption. The results vary due to initial scope
    for improvement, success of the implementation and the methodology and
    timeframe calculating savings. At Fiddich Consulting we provide best in class
    outsourced sourcing model and have following cost savings

    Indirect Cost Savings

    Reduced
    Human resource and hiring manager interaction with agencies

    Reduced
    Human resource and hiring manager involvement in end-to-end administration
    tasks

    Efficiency
    gains from process improvement enhanced reporting and control

    Productivity
    gains from a higher quality of candidate attracted and reduced time to fill
    Productivity gains from better candidate fit and reduced retention

    Direct Cost Savings

    Reduced
    salary rates from improved market comparison and a more rigorous exception
    approval process

    Reduced
    salary rates from enhanced non-salary employee value propositions

    Reduced
    recruitment volume from increase retention and candidate fit

    Reduced
    volume via agencies due to increased internal mobility and pre identified
    candidates

    Reduced
    agency fee per hire by reducing agency effort in the process. At Fiddich
    Consulting we believe in half the cost
    half the time business model

    About Fiddich
    Consulting

    Fiddich
    Consulting is a consulting, technology and outsourcing company. Combining
    unmatched experience, broad capabilities across all industries and business
    functions. Fiddich Consulting team up with clients to help them become great
    performance businesses and governments.

    True success comes from working with a partner you trust to
    provide the insight, support and expertise that will propel your business
    forward. Experiencing certainty with Fiddich Consulting means you can count on
    results, partnership and leadership.

    When you work with us, your long-term success is our motivation.
    This is why we can offer you the ability to meet every challenge and the
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    We at Fiddich Consulting provides multi-dimensional services spanning IT
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    Today, some of the most creative minds in media and entertainment around
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    True success comes from working with a partner you trust to provide the
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    Experiencing certainty with Fiddich Consulting means you can count on results,
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    For all consulting/ business queries, please contact our business development
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