Research and Recruiting
Filed under: Recruiting, Recruiting Update, Services
Recruiting quality talent requires a great deal of research. Unfortunately, finding the right person for the job is not as easy as picking a random resume from a pile and giving the person a job. Performing these research tasks take time and effort, especially when you are targeting specific competitive companies to source from. When researching candidates from competitive companies, there are two services that Hire Velocity offers.
Name Generation is the first option offered by Hire Velocity. With Name Generation you specify competitive companies that you think will have the talent you are looking for. Upon getting this information we immediately begin researching to find candidates that meet the required job specifications. Hire Velocity uses a wide variety of search tools including job boards, social media, cold calling, and our proprietary tools. Leveraging our search tools, we identify the names, phone numbers, and emails of qualified candidates. The final product is a list of qualified candidates from the competitive companies you specified.
In addition to Name Generation, Hire Velocity also offers Talent Mapping. Similar to Name Generation, we research candidates that meet the required job specifications in competitive companies that you specify. Again, we use our search tools to identify the names, phone numbers, and emails of qualified candidates. Talent Mapping takes Name Generation to the next level and maps these names into the company’s hierarchy. This service can be extremely useful to visually see the hierarchy of the candidates. This service entails an even heavier load of cold calling and research to map names, but the results can be quite valuable to your recruiting efforts.
Cost Per Hire
While calculating cost per hire (CPH) is not an exact science, it can be a valuable instrument that gives insight into the cost of the hiring process for various positions and do some comparisons. Cost per hire can also allow companies to evaluate how effective they are with various sourcing strategies in the hiring process. However to be most effective, a company should look at all of the factors that contribute to the cost per hire.
Many contributing factors have to be considered when calculating the cost per hire of an internal recruiting team. The first factor is the recruiter who is a fixed cost since he or she is an employee of the company. Then hardware related costs have to be added in such as the computers and the telephones. Expenses to get the word out about open positions like job fairs, job boards, referral bonuses, and the applicant tracking system will also need to be added into the cost per hire calculation. Finally add in training, on-boarding, and turnover costs. Once all those costs are added up, the total cost per hire can be determined. This total cost per hire is essentially the same whether a company is hiring an inexpensive person or an expensive person because it is the same person doing the recruiting. When recruiting internally, it is also important to remember that the recruiter is a fixed capacity so he or she cannot handle any surges in hiring.
The alternative to recruiting internally is using a recruiting agency for hiring needs. The cost per hire with a recruiting agency should encompass most of the items that are calculated into the cost per hire of using an internal recruiter
One option is using a contingency firm, who gets paid only when someone is placed into a position. Contingency firms typically charge 15- 30% of salary. This means if a company is hiring an employee who will be paid $50,000 a year, the contingency firm will charge between $7,500 and $15,000 per hire. This can be a very hefty fee. The other option is to utilize a recruitment process outsourcing (RPO) firm. An RPO allows companies to outsource a part of the recruitment process or the entire recruiting function. RPO’s typically result in a cost per hire of 5 – 10% of salary compared to the 15 – 30% that a contingency firm charges. Using the same $50,000 salary as before, an RPO would typically result in a cost per hire of $2,500 to $5,000. Even by comparing the lowest CPH for a contingency firm with the highest price for an RPO, there is a minimum savings of $2,500 over a contingency firm.
When a company is faced with any level of volume hiring, the savings to the firm with an RPO exponentially increase. This is one of the areas where real value is delivered. Think of the cost savings of using an RPO versus a contingency firm to hire, for example, five sales personnel with $50,000 salary. This could be a savings of $7,500 to $50,000!
Utilizing an RPO such as Hire Velocity, a company can achieve a more cost effective cost per hire while delivering flexibility and scalability in meeting hiring needs…especially in this market when many internal recruiting teams are at their smallest size. Additionally, the RPO helps the company avoid any of the fixed cost elements of the Cost per Hire calculation.
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A New Way to Look at Cost Per Hire
Should you bring on a contract recruiter or let an RPO manage for you?
Recruitment Process Outsourcing, also known as RPO, involves a company turning all or some of its hiring duties over to an external company. The external company, an RPO, has the task of finding a specific number of employees using a list of specific needs and a timeframe set by the company. For example, Hire Velocity was tasked with hiring over 900 assistant store managers and bi-lingual sales consultants over the period of 12 months for a major telecommunications company. Hire Velocity saved this telecommunication company about $260 per hire made, saving the company a total of about $236,340.
Many companies are left wondering whether it would be best for them to do the hiring internally, through the use of a contract recruiter, or use an RPO to do some or all of its hiring tasks. The company needs to ask itself if it can handle the increased workload of hiring a large amount of employees in a specific time frame. It is important for the company to consider all of the steps in the hiring process. The first step is active sourcing and screening, which is manually going through its applicant tracking system, job boards, and social networks to find potential applicants. Then the company must screen every applicant to ensure that they have the skills, education, and experience that the company is looking for. These two steps alone can often be overwhelming for a company that is looking to hire a lot of qualified candidates in a specific time frame.
This is where an RPO can help relieve the stress of mass hiring from a company. A company can choose to have an RPO do some of the hiring tasks, called RPO On-Demand, or have the RPO take over the whole hiring process, called Enterprise RPO. For example, a major home improvement store company hired Hire Velocity to do diversity sourcing and screening. Hire Velocity used its resources, including over 200 job boards and 5,000 content partners, to source potential candidates using the needs and wants of the company. Hire Velocity then telephone-screened each potential candidate to make sure his or her skills, education, and experience met the needs of the home improvement store company. This process led to 49 bi-lingual store managers and human resources managers being hired.
Recruitment Process Outsourcing can be a great tool for a company to take the stress out of hiring and reduce costs by up to 50%. However, it is up to the company to evaluate its needs and resources to see if it would be beneficial to hire an RPO or do the hiring internally. With an RPO, every task is managed for the company and all tools are supplied. With a contract recruiter, the overall work must still be managed internally as well as all tools needed to do the job. If you’re looking to do volume hiring quickly in an efficient and cost effective manner, the RPO may be just the solution to your current hiring challenges!
Proactive Recruiting
Over the years, one of the biggest challenges Hire Velocity has faced is communicating the importance of proactive recruiting to our clients. A large majority of US companies approach recruiting from a much more reactive standpoint. For example, many companies fail to build the relationships and talent pipelines they should be building, when hiring is down. Instead, many companies wait until five electrical engineers are needed, and they post jobs expecting to get the five best electrical engineers out there. Although this approach does work occasionally, we have come to find that the best talent is acquired through continuous proactive recruiting. Creating a talent pipeline can enable your company to pick from the best available prospects when the time comes. Generally, companies may view proactive recruiting as the more expensive approach, but the cost of reactive recruiting can reach similar heights while necessarily bringing back the quality talent you’re looking for in a timely manner.
Instead, find a recruiting partner that can build relationships with prospective applicants and passive candidates in order to streamline the hiring process. The University of Illinois at Chicago did a study on proactive recruiting particularly pertaining to finding qualified female candidates. In two different job searches for the same position, proactive recruiting nearly doubled the number of qualified applicants and showed a huge increase in the number of female applicants. Proactive recruiting was defined as an aggressive search for talent rather than a simple job post.
In recent years, Technology has eased the pains of creating an effective proactive recruiting process. Applicant tracking systems such as Silk Road’s Open Hire, iCims, and Taleo, (for example) have enabled companies to build robust talent pools and ease the process of finding qualified passive candidates. Leveraging the right technologies can create the infrastructure and foundation needed to lower your recruiting costs and enhance your recruiting process. Thus, it’s essential to look past the “reactive” recruiting methods such as job postings, and create a proactive recruiting process that will build a much more qualified talent pool.
Finally, remember that it is always a good practice to continuously promote your brand from a recruiting perspective. Your career site is the door to your company and should display the goals, values and culture of your company. Once you do proactively get the candidate to your front door, make sure you leave a great impression!
Valeri Marks
CEO
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Technology Industry On Hiring Spree
The past few years have been hard on the recruiting industry, especially in the technology industry. With companies like Microsoft and Intel having mass layoffs last year, the industry seemed to get hit hard by the recession. However, many tech companies began a hiring spree late last year and continue to be actively hiring. ISI Group, a research firm, says that they believe overall revenues will rise more than 10% for the first quarter for many large tech companies. That is a major improvement when looking at a 16% decline just last year.
Take a look at Intel, a company that laid off 79,800 employees at the end of 2009. The popular computer chip maker said that it plans to hire 1,000 to 2,000 people in 2010, the first substantial hiring spree for the company in five years. Google, the world’s leading search engine company, said that it hired 786 new employees in the first quarter and that it expects to continue hiring.
The hiring spree in the technology industry is not just affecting the big players, smaller startups are also beginning to hire. LinkedIn, the social networking website for professionals, hired 184 people last year and 154 so far this year to bring its employee count to about 500. The company said it also plans to add an additional 300 hires this year. Another social media startup, Twitter, said it hired about 125 employees since last May, which brings the company to a total of 170 employees.
Source: Wall Street Journal
Good News for the Recruiting Industry!
On Thursday March 18, President Obama signed into action a new bill, which will directly affect the staffing industry over the next few years. Our industry has taken one of the largest hits over the past two years, since many companies reduced their hiring initiatives, which left many staffing and recruiting companies with half the volume they were used to in prior years. However, President Obama has made it one of his top concerns to get the whole country and economy back on its feet, starting with reducing unemployment. February saw little progress in decreasing nonfarm unemployment. The current unemployment rate has remained at 9.7% and February only saw 36,000 more employed Americans in comparison to January. The new bill will directly respond to these sluggish numbers by creating $18 billion in tax breaks for companies who hire in the next year. The bill is proposed to create 250,000 new jobs over the next year. Although that may not seem largely significant, it will bring new business for the recruiting industry, something that we can all look forward too!
Byron West
President
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