cost of hire – what what’s the real calculations

8/7/2019 Cost of Hire What Whats the real calculations

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Cost of HireCost of Hire WhatWhats the reals the realCalculation?Calculation?

What do Agencies have to Offer?What do Agencies have to Offer?

Presented by Kevin WheelerPresented by Kevin Wheeler

2004 RCSA Conference2004 RCSA ConferenceMelbourne, AustraliaMelbourne, Australia

September 10September 10thth 20042004


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Global Learning Resources, Inc., 2004 2

What are the Talent MarketWhat are the Talent Market

Gorillas?Gorillas?

Technology has allowed the number ofapplicants to go UP.

Lack of precise criteria and poorscreening has allowed the number ofqualified applicant to go DOWN.


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Therefore, quality is LESS THANEXPECTED.

Costs are GREATER THAN PERCEIVEDVALUE.

Big concerns over in-sourcing recruiting

vs. outsourcing.


4/40 Global Learning Resources, Inc., 2004 4

Good People are Good forGood People are Good for

BusinessBusiness


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Value of QualityValue of Quality

A modest improvement in talent can doublethe market capitalization of a softwarecompany. -McKinsey

All that separates you from your competitionare the skills, knowledge, commitment, and

abilities of the people who work for you.Companies that manage people right willoutperform companies that dont by 30 to 40

percent.


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Yet. . .Yet. . .

Only about 30% measure quality, upslightly from last year. Staffing.org

The vast majority still put their faith inthe front end--a rigorous selectionprocess--to ensure that they get a

"quality" employee.

Source: Workforce Magazine & Staffing.org


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What isWhat isQualityQualityof Hire?of Hire?

No standard definition For many, subjective definitions suffice:

Perceived fit into organization

Match between hiring manager and hire

Likeableness

Social and educational parallels


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What isWhat isQualityQualityof Hire?of Hire?

For others there are more objectivedefinitions:

Time to productive output

Amount produced Dollars earned/sold

Measurable skills/capabilities

Customer satisfaction

Return business


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What is aWhat is aQualityQualityHire?Hire?

Anyone who produces at or abovestandards consistently, fits into theorganization, and has career potential.


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Agencies should be seen as thebest source of the highest quality

candidates!


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How Are Search Firms PerceivedHow Are Search Firms Perceived

by Corporate Clients?by Corporate Clients?


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Recent Study in AustraliaRecent Study in Australia

Australian study of ARAs and ESFsAlan Fish and Robert Macklin of Charles

Sturt University

Surveyed 109 HR professionals members of Australian Human

Resources Institute (AHRI)Asked to rate agencies on 31 factors


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Discrepancy Between ImportanceDiscrepancy Between Importance

and Perceived Quality Receivedand Perceived Quality Received

1. Having wide access to the market

2. Understanding the client organizations needs

3. Quality of the candidate database

4. Communication skills

5. Understanding the vacancy

SOURCE: Perceptions of executive search and advertised recruitment attributes and service quality, Fish &Macklin, Personnel Review,Vol 33, No 1, 2004


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Agency SearchesAgency Searches

Slower (> 30 days) Certainly not cheaper (>3-6x more)

Quality is not necessarily perceived asbetter

Retention rates vary and probably areno better than employees from othersources


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Your Value Proposition Has to Be. . .Your Value Proposition Has to Be. . .

Access to better candidates; Knowledge of the talent marketplace;

Delivery of more qualified candidates;

Delivery of the highest quality candidates;

In an acceptable time frame;

Fewer bad hires; At an acceptable value/price ratio.


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Rising Corporate ConcernsRising Corporate Concerns

Key objectives of many organizations: Reduce use of outside agencies

Reduce number of outside agencies

Increase proprietary web site usage

Increase use of internal employee pools

Increase use of referral programs Hire recruiters with agency backgrounds


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Agency HurdlesAgency Hurdles

Job analysis dependent on hiring authority

No access to internal talent

No methodology or incentive to recommend

internal talent Limited understanding of business strategy or

future needs

No proof of competitive advantage

Higher costs without higher quality


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Three Challenges for AgenciesThree Challenges for Agencies


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Challenges OneChallenges One Client Management

Establish long-lasting, on-goingrelationships with employers

Circumvent HR get to hiring authority Issues:

Competition Limited candidate pool

Limited time horizon Lack of in-depth insight into employer needs No control over job interview Difficult access to hiring authorities


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Challenge TwoChallenge Two

Candidate Management Convince candidates to consider an

employer

Issues: Always some degree of manipulation from all parties

Have to sell candidates on jobs/movement and

employer. Candidates are trying to manage the recruiter.


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Challenge ThreeChallenge Three

Impression Management Creating how candidates regard them

Creating how employers regard them

Coaching candidates

Coaching hiring managers


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WhatWhats Going On?s Going On?

Agency process hasnt really changed in50 years.

Value proposition based on developing

and nurturing personal relationships,building client loyalty, physicalproximity, generating a large candidate

pool.Value derived from volume and cost.


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The Changing PerspectiveThe Changing Perspective

Traditional Emerging

Requirements:

-Flexible workforce scenarios-Interactive communications

Static, One-time

Requirements:-Logistics-Static workforce planning-Sourcing capability

Dynamic, on-going

ReactiveFocus on open positions

ProactiveAnticipate needs

-Running ads-Posting to job boards-Searching databases

-Building a talent pool-Developing relationships-Development focus-Competitive intelligence

Value: volume / cost Value: quality / speed


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I t i s t he forem ost t ask andrespons ibi l i t y of our generat ion t o re-imag ine our ent e rp ri ses, p r i va t e andpub l i c .Tom Pet ers, Re-imagine!


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Some Ways to Improve YourSome Ways to Improve Your

Value and Candidate QualityValue and Candidate Quality

1. Sophisticate the supply chain - Supplymarket information

2. Partner with your clients - Learn more

about their talent needs3. Streamline your processes - Integrate

new technologies

4. Develop metrics you live up to Providea guarantee


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1. Sophisticate the Supply Chain1. Sophisticate the Supply Chain

Value comes from market knowledge,reach, total customer service andcommunication.

Traditional talent supply chain is nolonger linear nor does it add enough

value.Candidates Agency Company


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New Supply ChainNew Supply Chain

Agencies

CompanysCustomers

ActiveCandidates

InternalCandidates

F i r m

PassiveCandidates

Others. . .

The supply chain is complex, global and intertwined with

development.


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ImplicationsImplications Offering market knowledge sharing tools, skill

building programs and social networkingservices can add immense value.

Find a way to take the internal supply chaininto account even to get paid to placeinternal talent.

Educate customers and candidates andexpand supply types.


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2. Partner with your Clients2. Partner with your Clients Develop formal partnership plans with your

clients.

Spend time to learn organizations strategic

plans. Know where they have talent pain. Offer to be a part of talent discussions based

on your superior talent market knowledge.

Develop private employment exchanges.

Leverage technology.


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3. Streamline Your Processes3. Streamline Your Processes

Technology drives all change. Streamlined fulfillment systems

(automated tracking, offer and

screening).

Online delivery systems (talent pools).

Tools to communicate personally anddeeply with candidates and employers

worldwide instantly.


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4. Develop Metrics4. Develop Metrics

Provide customers with detailedmeasures.

Partner with clients to get access to

facts, numbers.

Help them measure quality, speed,

cost.


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Historical Agency RolesHistorical Agency Roles

B r a n d So u r c e Sc r e e n A s s e s s Se l l

Of f e r Or i e n t Re t a i n Pl a n


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Future Agency RolesFuture Agency Roles

B r a n d So u r c e Sc r e e n A s s e s s Se l l

Of f e r Or i e n t Re t a i n Pl a n


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Surviving/Thriving AgenciesSurviving/Thriving Agencies

Offer Employers: Low cost solutions

Higher quantitative quality

Convenience One-stop shopping

Flexibility

Broad, global reach


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Surviving/Thriving AgenciesSurviving/Thriving Agencies

Offer Candidates:

Negotiation

Choice

Education/Guidance

Relationship


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There is Great OpportunityThere is Great Opportunity

E-Recruiting is a US$7.1 billion dollarbusiness.

Candidates and employers are more

technology savvy.

Talent supplies will be constrained for

the next 30 years.


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What is the Cost of Hire?What is the Cost of Hire?Your ability to provide differentiated

services.

Your capability to offer a talent solution

to a business need.Your foresight in understanding the

emerging talent marketplace.

Your reliability in delivering a qualitycandidate.


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The greatest dangerThe greatest danger

for most of usfor most of us

is not that our aim isis not that our aim istoo hightoo high

and we miss it,and we miss it,but that it isbut that it is

too lowtoo low

and we reach it.and we reach it.

MichelangeloMichelangelo


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Thank You for Listening!Thank You for Listening!

Kevin WheelerKevin Wheeler

www.glresources.comwww.glresources.comkwheeler@[email protected]
http://www.glresources.com/http://www.glresources.com/http://www.glresources.com/

cost of hire – what what’s the real calculations

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