The Business case for a Recruitment Audit?

By Mike Palmer

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Having been involved in recruitment, whether on the corporate, the vendor side as a Recruitment Process Outsourcing (RPO) provider or as a consultant, I have seen a broad spectrum of internal recruitment functions. Whether it has been a Fortune 500 Company or a small, growing business, it’s interesting how these functions have followed similar evolutionary processes to become what they are today.  Challenges that face the small organization also face larger organizations. Small company recruiting challenges grow and amplify into large company challenges.

Recently I met with a small technology company’s head of Operations who has become frustrated with their organization’s ability to identify, prioritize, engage and hire staff to both maintain and grow their business in a cost effective manner. This company has just 250 employees, and over 30 active (and aging) job openings. Last year they hired just over 60 employees, mostly replacing turnover, unable to grow their business substantially due to recruiting’s inability to keep up to the curve. Their spend for the year was almost $1 Million, rough cost per hire of $16,000. To most of us in recruiting, this metric alone might prove an indicator that something’s amiss with the recruiting function.

The organization that supports recruiting, HR, has two people dedicated to the recruitment function; one senior recruiter, one recruiting coordinator/junior recruiter. At first blush, it would seem that the team is appropriately staffed to hire at the existing volume. Some of the roles, roughly 10% are very challenging to identify and engage talent, 20% are entry level support and administrative roles and the remaining 70%, though not easy to recruit for, are roles that should be filled at a cost per hire that is 25% of the company’s average. So, what’s gone awry?

A high-level breakdown of spend:

Salaries, including benefits:    $190,000

Recruiting Technology:            $25,000

Advertising & Social Media:     $60,000

Candidate Travel & Misc:         $45,000

Staffing Agencies (Perm):       $660,000

Total:                                      $980,000

Yes, the staffing agency usage is high, though not altogether uncommon for smaller organizations that are experiencing challenges in their recruitment functions. High agency usage is often a symptom of other issues. Upon conducting a full audit of the recruitment function we discovered some very significant shortfalls in their overall process, recruitment team accountability, and the deployment of their technology. There were many areas that we identified in our full report, however here are some highlights of the audit:

Process:

Employment Brand

Technology

It is clear that there are many things that would help improve this organization’s recruiting process, the candidate/hiring manager experience and the fiscal control. Our immediate recommendation was to design, document and communicate a consistent hiring process (with collaboration from the hiring managers). Knowing what we want the process to look like (to serve both the candidates and the organization), we can develop plans to address training and coaching the recruiters and hiring managers, address the process tools and gaps and align the technology to serve the aforementioned people and process.

Recruiting is the lifeblood for organizations, and in recent years, as new employee tenure has declined; it is critical to be purposeful, effective, and efficient with your recruitment function. Most organizations evolve the function in their early years, hiring a recruiter, then a second, then a manager, and the growth continues without an objective review of the processes and the impact those processes are having on your ability to hire the best.

Regardless of your company's size or industry, you can develop your employment brand, your reach and your recruitment function's impact. A recruitment audit can help you see your choke points as well as identify high impact adjustments that will move your recruitment function forward to be more  effective, drive candidate and hiring manager engagement and reduce agency spend.

The first step to improvement is knowing where we are. The second step is creating a vision to where we want to be. Once we know the starting and end points, the road is far easier to build, the destination that much more attainable and the likelihood of success far more likely.  

Mario Testino, the Peruvian photographer, summed it up like this; "My favourite words are possibilities, opportunities and curiosity. I think if you are curious, you create opportunities, and then if you open the doors, you create possibilities".

 

About the Author:
Michael helps organizations align and optimize their talent acquisition with their overarching business objectives. This includes conducting recruitment audits, implementing processes, systems, tools and teams in order to attract, screen, recruit, select, and onboard engaged employees. Follow him on twitter @hireinsite

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