Decisions, Decisions. Consider Your Options When Faced with Your Next Hiring Spike
Jane Doe, head of recruitment at fast-growing ACME Corp, was not having a good day. Three hours ago, the head of sales requested assistance in hiring 50 new business development reps over the next 6 months to support a new national product launch. Jane, knowing her team might mutiny if asked to work any harder, carefully considered her options in dealing with this unanticipated hiring spike. She ruled out RPO since most outsourcing vendors prefer long-term contracts and much larger annual hiring volume commitments. Retained and contingent search were both off the table due to their cost. Her only two remaining options were to either hire a team of independent contract recruiters or engage an “On-Demand”, project-based interim recruitment partner.
Jane clearly needs a solution that:
- Can be activated immediately
- Is cost effective
- Provides dedicated resource(s) with the right skills, experience and accountability
- Brings added value through sourcing tools and technology that are otherwise an added expense
- Requires minimal supervision, given the urgency of need and ACME’s other pressing hiring needs
If you were in Jane’s shoes, what would you do?
Hiring a team of contract recruiters could make sense, assuming Jane’s got a proven, reliable network of contractors she has worked with in the past on speed dial and they are ready to work for her ASAP. Unfortunately, most good contractors typically need days, or even weeks, to finish current assignments and prefer commitments typically at least 3, or even 6, months in duration. Most also do not come with a technology toolkit of their own; instead the employer must provide access to tools, which can involve additional costs.
Weighing these considerations, a better option may be an “On-Demand” interim recruitment solution provider partnership. Why? Think of it as a “managed service” or “RPO Lite” in which Jane partners with a firm responsible and accountable for all contracted hiring deliverables within a specific time frame. There are a number of additional reasons that an On-Demand recruitment service provider may be the best way forward in a situation such as Jane’s:
- Access to a scalable, readily available pool of proven recruiters with specific industry or specialized recruiting and sourcing expertise only when you need it, whether for a certain role or industry. (i.e. doing location or function-specific competitive intelligence research or launching highly targeted social media referral campaigns online.)
- Access to sourcing tools, proprietary talent networks and candidate database technology that the company might otherwise need to subscribe to and incur additional costs. The On-Demand provider’s recruiting consultants are typically equipped with these tools that provide greater assurance of success.
- Reduced fixed overhead recruitment team costs as Jane can staff her in-house team according to baseline hiring needs and use On-Demand resources only during spikes OR to provide a nominal level of on-going pipeline sourcing to support future needs.
- Faster ramp up to address the urgent hiring spike as Jane can save time typically spent sourcing, interviewing, hiring, training and supervising independent contractors.
- Performance management and project management provided by the On-Demand firm enforce accountability through weekly performance metrics against target hiring goals.
Finally, when done right, an On-Demand solution is almost always more cost-effective than using contingency search vendors and only slightly more expensive than hiring independent contract recruiters. Bottom line, the value and tools that an On-Demand provider brings to the table can be viewed as an insurance policy to minimize the risk of failure. Similar to contract recruiters who will typically bill an employer on an hourly basis for their services, the majority of On-Demand providers bill on an hourly or monthly flat fee retainer plus a bonus for each hire. In terms of a total cost / benefit analysis, a comparable contingency search expense is typically fixed at a fee per hire based upon 20- 25% of salaries recruited. In contrast, in our experience, an On-Demand solution generally ends up costing 10-18% of salaries recruited, depending on the type, and number of positions, to be filled, compensation competitiveness and location of the positions. Obviously, the more difficult the search and the shorter the time frame, the more costly an hourly billed solution will be.
Conclusion
Anyone in the business of talent acquisition knows that every situation is different. As management consultants advising clients on the best solutions for their most critical hiring needs OR as a provider of executive search and On-Demand recruiting services, we don’t advocate a one-size-fits all answer to any single recruitment challenge. Ultimately, the right solution depends on the circumstances and many variables that need to be evaluated carefully. However, in instances like the unexpected hiring spike at the fictitious ACME Corp. described here – where time is of the essence and failure is not an option.