The basis of this paper was originally written as part of a corporate debate which resulted in one of our clients outsourcing their recruitment responsibilities whilst retaining control.
You have agreed a sensible IT strategy to delivery a consistent approach across your whole company which reduces the cost of IT staff without impacting on quality or incurring any time barriers. You have also decided that you need a simple-to-use process that is easy for line management to operate but allows for some high competency levels of some very experienced managers. You need a system that removes the “rubbish” from the line manager whilst making use of their best skills is probably the path you ought to be aiming at.
A number of other factors are hidden in here too though. The collation of data, particularly reject notes and the history that each candidate application generates is necessary for continued excellence. It’s output back to the agency suppliers is key in keeping the status of the client company high (particularly in the labour market). At Barclay Anderson, we know that low feedback levels to the suppliers filters back to the employment market which reduces future recruiting capability.
You can’t reduce costs significantly without managing the supplier base. Suppliers respond very well to empathic clients – further allowing for continued re-negotiation to cater for market changes. Quality feedback to the agent also means that as a client, you would continue to receive a very high level of service due to high motivation levels. Feedback also means telling them when a requirement has been closed too. This “supplier management” arena cannot be a totally “process driven” model – it needs human interaction. If you design it to force the process to drive the human rather than the human to drive the process, it will gradually fail. There is some well documented HR research in this regard – people need to be in control of processes, not the other way around. However, we believe that “human” contact is very necessary, particularly when the product (the individual resource) can also make decisions too (!) and both interested parties are under pressure to deliver (the manager and the agent).
Base recruitment process
There are some wonderful examples of flow charts showing processes to buy contract staff but fundamentally, there can only be one way. In brief then:
|The process & Manager||Detail new vacancy|
|The process||Send requirement & Log CVs|
|Line Manager||Review CVs|
|The process||Log result|
|The process||Feedback to agency|
|The process||Book interviews|
|Line manager||Conduct interviews|
|The process||Log result|
|The process||Make offer|
|The process||Negotiate (contract)|
It has been proven that generating excellent job specifications is certainly one of the keys to the success of any recruiting project – the thinking that “getting the beginning right first time” makes any project more successful. Highly competent line managers may feel they have enough experience of creating a specification themselves – yes they can, but they’ll often leave out the specifics to allow the agencies to really get to grips with the requirement.
Some people see resource centres / resource management as taking control of the process. Well, yes and no! Actually, we believe the line manager gains more control, not less. The absolute key parts of the recruitment process are actually conducted by this controlling party – the line manager; drawing up job specs, reviewing CVs and conducting the interviews are the key decision points in the process driving either an escalation process or a continued plan to deliver. Some people try to take a simple system that has been tried and tested the world over and then make it complicated! There is some debate over who should draw up a job specification and in our experience unless it’s for an extremely simple programming job, spend some time, discuss it and have it detailed by a professional recruiter / HR expert.
End-to-end recruitment processes
IT Contract Recruitment section
The recruitment of a contract resource doesn’t stop when the contracts have been signed. Have you considered who conducts the other follow-on processes?
- Induction for new contract staff
Site rules (& signatures), emergency contact information secured etc.
Chasing managers for extension decisions early
Negotiating extensions with agency, handling objections and the increase debate
Re-deployment of released or end-of-term resource
- Contract management
Chase contracts from agencies
Checking contract variables as per verbal/internal audit trail
Arranging sign off
Informing suppliers of changes in invoice details etc.
- Supplier management
“Inducting” new supplier account managers
“Help desk” & problem solving
- “Line manager” management & value added
Advising on the consistent approach to releasing job specifications
(includes encouraging a project managed approach to recruitment)
Chasing for decisions
Understanding and escalating (relevant) problems
“Education” (recruitment issues)
Advising on rates, market changes, previous similar roles etc.
Issuing terminations and conducting dismissals
- “HR” to contractor staff
Mid-term and end-of-term quality reviews
Distributing formal and ad-hoc management reports & data to relevant parties
Receiving and dealing with canvass calls
A variety of sub-processes exist (or are required) to enable a fully functioning recruitment administration system to operate cost effectively. It should be one that is capable of adding real value to your organisation – whilst at the same time saving money. Some of the topics shown above are often conducted by the supplier agents to the client. Particularly to guiding the client on price, managing problems directly with managers, chasing extensions and “account managing” each client manager to ensure client penetration & sales growth together with providing some basic statistics available on demand. But do you really want suppliers guiding your managers on price or supplying their own service level information? Scary.
There can be a rather large contingent of stakeholders in an internal resource management structure, particularly at the outset or set-up stages.
- The IT Director
- The line management
- The people who will help drive the process
- Human Resources Department
- The supplying agents
Consider asking some of the less involved parties to withdraw as a stakeholder but use them for consultative advice instead – particularly HR and Procurement. Human Resources really don’t have a role to play in contract recruitment – unless they have a particularly skilled and relevant member of staff who can honestly add value.
The truth, the debate
Now it’s time to hit some raw nerves..
Many clients believe that given time, they might be able to create a total process driven event machine that hires staff at the flick of a switch. A software solution to their problems. Not an unnatural thought, particularly as most people in this industry have experience of software development.
So, that’s an Agency Recruitment System? Agency systems do all that. So what are you really trying to achieve? You need to recruit staff to a cost, with time constraints and to a quality process. Your core competency isn’t – and probably never will be (or required to be) – placing IT staff. It is for agencies though. The cost of the “all singing, all dancing IT system”, it’s design problems and it’s flexibility to change in the future is not an option.
Let’s explore this further. Agencies have the recruiting competency, they’re the experts. This is why some gullible IT Directors have been known to do deals with traditional contract agencies on an exclusive basis, they pass the whole responsibility of recruiting contract staff to one agency and allow the agency’s “core competency” to take over. These projects normally fail.
We would argue that clients need to use traditional agencies only for what they’re best at – delivering staff. That’s all they’re targetted to do and that’s what they’re geared up to achieve. Asking the standard large agency to elevate themselves into the spectrum of solutions providing is a waste of time. Although interesting for the agent for a short time, he will quickly fall back in to the natural tendency to only supply people and his old ways. One client of ours used to tell us that agents were like waiters. They turn up at your table and ask you what you wanted from a menu. Asking them to become the chef too was pointless.
The need for agencies
These two businesses then, (the client and the supplier) are certainly not in conflict with each other – on the contrary, they actually need each other – but they do fester the seeds (or germs?) for opportunity on behalf of the profit targetted salesman. Perfect chances exist to make more of every opportunity; Focussed project managers and delivery managers do not have the patience nor inclination to deal with more than a few grains of sand in the supply market. Ideally, these buying managers will wish to deal with just a tiny fraction of the available market. The model of dealing with tiny fractions of the supply market is an ideal partnership if delivery is the only key – the supplier will be extremely motivated to supply as there will be little competition and hence, better scope for a result. The statistical likelihood of securing the business may be 50% (if there are two suppliers) and a third (for three suppliers). Additionally, there will be scope to make more profit from each negotiation as the time / delivery focussed buying manager will take few risks, in fact he’ll feel obliged to pay the rate quoted. After all, he “showed his cards” by making an offer which is sanction enough that the supplier has done their job right – a difficult point to negotiate.
Yes, agencies need to make a profit but they need to be given the sense that the hierarchy (the “police”) are watching them to ensure fair play. This leads on to a second point, fair competition. On the one hand Managers cannot be expected to deal with more than two, possibly three agents at a time and for good reason as discussed above. The knowledge that the manager feels each supplier gains over time will bear long term fruit, not just today but the future too. But we know that competitive arrangements keep prices lower and increases the result for the buyer. So here we have a dilemma; a buying manager who cannot be expected to deal with more than two or three suppliers – Vs – an increased supply pool to generate lower costs. Managers cannot be expected nor are best placed to deal direct with suppliers. In any case, the amount of communication required to fulfil a complete recruitment project with more than two or three agencies would bog down even the most experienced line manager.
Barclay Anderson was formed when our Managing Director and founder was given a once-in-a-lifetime opportunity to build the “perfect recruitment model” utilising 20 years of IT client account delivery and recruitment experience. There is no doubt that the original client now has a best practice contract IT recruitment model that allows managers to stay in control and make decisions & changes to suit themselves and their projects, they can request data and advice along with an expert system to cater for the unexpected – together with huge cost advantages. It is also without question that the suppliers not only enjoy to work with this model, but positively reinforce working with it and consider this client as the benchmark in the UK. This has allowed the client to secure profit margins and competitive pricing that clients 5 to 10 times the size of their current operation envy.
Why has this model been successful?
- Suppliers have an extremely low cost of sale, lowering the cost to the client
- Suppliers never waste their time working on specifications that are either under nor over specified and obtain fast feedback and decision points, lowering their cost and increasing their motivation
- Managers have the benefit of working with a reliable service that generates competitive prices, lowering cost
- Managers have saved huge amounts of time in utilising the service and know that it isn’t a monopoly, but a service that they could, if they really needed to, vote with their feet and take the business direct to the suppliers
- It’s simple and enjoyable for both the supplier and the buyer – and it works
So to reduce a resource management solution to a bag of nuts and bolts processes simply won’t work. Over the years, it has been the motivation of the agencies via skilled Barclay Anderson operations staff – and an endless search for cost savings and process improvements together with a passion for supplying a service to managers which has worked. The process that we use just helps.
We are not surprised therefore that the market for very real solutions providers in Resource Management has grown to be worth $6 billion in the US – and has started growing at a huge rate in the UK too.
The best Resource Managers act as the interface – the service provider to the budget holding buying managers – who like our client above, may vote with their wallets and spend their money outside the framework if the system failed them. This will always keep a service provider right at the forefront of service delivery and cost competitiveness, particularly if a measured SLA is in operation where both the suppliers and the resource management team need to perform.
We encourage you to “play” with this potentially radical concept of outsourcing a specialist nature of Resource Management whilst retaining control over expenditure and a knowledge based learning system that teaches (or educates) buying managers across your company (possibly internationally based). This system would give you a best practice solution which would benchmark right at the top end of the industry and save vast amounts of money and time.
To source or to outsource?
Managers need a controlling stake in the process (which can be designed and built on-site for you), but who would drive the continual search for process improvement and cost control at your company?
For line management to use a central service reliably, time-after-time and have confidence in it’s abilities, the service is required to operate comparable to a “Customer – Supplier” relationship. When this ethos is removed, line management will generally find other supply routes and solutions to their problems. The best run central services will out-strip all single-operator line managers.
Ask yourself some questions:
- Is strategic recruitment and contract procurement & administration a “core competency” of your business?
- Would a permanent structure be used cost-effectively, year after year – what happens when you needed to fold your contract numbers down? Fire your Resource Manager?
- What career opportunities would be available for these “experts”?
We would argue that if it isn’t your core competency, someone else could probably do it better, cheaper and even make a profit out of your overhead. It has been calculated that audited savings of between 5% – 20% will be gained by implementing professional Resource Management systems with a running cost of less than 2%.
We would also argue that the very reason for buying contract staff in the first place – for flexibility – should be also the same reason for outsourcing your Resource Management. And in any case, how would you employ, train and replace your in-house permanent team over time?