If you are a business owner, chances are you’ve experienced the challenges of trying to recruit in a competitive market like Hong Kong. Particularly if your business has been in growth mode, you may find that the old recruitment methods you’ve always relied on are ineffective. So what should you do if key positions in your organization are sitting empty, the candidates you’ve met are missing the mark or your job advertisements have gone unanswered? It may be time to rethink your recruitment strategy and develop a more robust approach to identifying and securing talent.
If you don’t have an HR team, you’ve likely engaged external recruitment partners to help you source candidates from the market. But not all external recruitment partners are created equal and it is worthwhile for you to know the differences in structure, pricing and approach before you engage one.
Contingent Recruitment Agent
Contingent recruitment agents operate a “pay for play” model. They don’t get paid unless they find and place a candidate with you. They are typically large, global players with extensive databases that they utilize to quickly generate a shortlist for your role. Many contingent recruiters are not necessarily subject matter experts and you may find yourself frustrated by their lack of industry-specific knowledge. Typical fees are anywhere from 15% to 25% of a candidate’s first year salary, depending on the industry and country. Working with contingent recruiters can sometimes be frustrating because they will often push candidates to the highest bidder (i.e. the client giving them the best commission) or de-prioritize your role if it’s a bit outside of the box and requires more legwork. Finding 2-3 good contingent recruiters who will take the time to get to know your business and truly partner with you is time well spent.
Retained Search Firm
Retained search firms would have you believe that they are a whole different ballgame from working with a contingent recruitment agent. There is some truth to this, but technology, outsourcing, and easy access to candidates from sources like LinkedIn has lessened their unique value proposition. Retained search firms emphasize their relationships, industry expertise, and research capabilities first and foremost. The majority of their senior consultants will have direct work experience in their coverage areas. They will offer market mapping and a more structured search approach to your search, usually involving producing a long list and short list of potential candidates. They will also demand a retainer that is typically payable in instalments after the delivery of key milestones (long list, etc). In my view, their approach is better suited for senior, complex or confidential searches. They can also be useful if you are building a business completely from scratch or opening a new office and would consider lifting a whole team from a competitor. Retained search firms typically have the expertise to manage these complex and sensitive negotiations. It can be a big investment though and you should carefully consider whether your business really needs this level of service.
If you’ve been spending a lot of money on external recruiters and don’t like the results, it might be time to hire an in-house recruiter. If you’ve not been tracking your recruitment expenses, get a list from your Finance team of the fees you’ve paid to agents over the last 12-24 months. If you add them up and they cost more than the price of a decent recent with 5-6 years of experience, then it is a no-brainer. An in-house recruiter will reduce the headaches associated with trying to manage multiple recruitment agencies and searches. If you have an HR team, the Recruiter should slot in right alongside them and work hand-in-hand on sourcing and onboarding your talent. Bear in mind that hiring an in-house recruiter will not, however, completely eliminate all of your agency recruitment expenses. Despite advances in technology, recruitment can still be a labor intensive business. Even tasks as simple as screening CV’s and scheduling interviews can take up a significant amount of your recruiter’s day. In addition to managing the relationships with any external agencies you are still engaging, your in-house recruiter will be able to utilize multiple low and no-cost recruitment channels to diversify your sourcing mix and ultimately, reduce your time to fill. This would include things like job boards, LinkedIn and referral programs. A good recruiter can be worth their weight in gold.
You may have heard of the term RPO in the past. Recruitment Process Outsourcing is popular with banks and some large MNC’s and it is as simple as it sounds – you outsource your recruitment process and team to an external provider. Whether or not RPO’s really lead to lower costs and a more agile, flexible workforce as they claim is a discussion for another blog post, but it is an option worth considering. RPO’s can be helpful if you have headcount constraints or operate in a truly KPI driven environment with little to no recruitment expertise within the organization. They essentially provide an out-of-the-box solution and can hit the ground running from sourcing to pipeline management to offer negotiations, contract generation and onboarding. RPO’s main draw is that they claim to reduce external agency costs by operating an internal direct sourcing model (i.e. they act as a dedicated on-site recruitment agency just for you), utilizing various tools to source and secure passive talent. Again, whether or not this promise actually materializes is another question and is largely determined by the quality of your RPO partner and their partnership with your organization.
Much has been written about employee referral programs and how successful they are. There are many studies that show that candidates who are referred by a current employee are more likely to get hired, are a better fit, and have a longer tenure with the organization. If you don’t have an employee referral program, set one up! They are easy to administer and there are several examples online of how to structure them. The key things you will need to decide include eligibility, fees and reward structure, and payment timeline. You should also consider how you will promote and market the program to your employees. Employee referral programs are great but they don’t work if no one knows about them!
Another huge advantage of employee referral programs is that they are much more cost effective than agency fees! With an employee referral program, you can secure a great hire for US$2,500-5,000 whereas an agency can cost you four times as much! Plus, you get the added benefit of hiring a candidate who is already vouched for by one of your current employees.
Fresh graduates are another potential talent pipeline. However, there is a big difference between hiring one or two graduates here and there for one-off, entry level work, and actually developing a fulsome graduate program that annually funnels fresh talent into your organization and develops future leaders. Many organizations don’t understand this difference and graduates are the ones who get the short end of the stick. If your business has a steady growth model or you prefer to train and develop young talent rather than recruit it from your competitors, then establishing a formal graduate recruitment program may be beneficial. There are many things to consider such as the appropriate headcount for your business needs, which schools to recruit from, how to develop relationships with those schools, compensation levels, training and development, and retention and career path, amongst others. But a graduate pipeline can breathe fresh life into your organization, bringing cutting edge skills and a diversity of thought and perspective to your team.
Finally, you may be a complete convert to the future of work and think to yourself, “I don’t need humans! A computer will do just fine!” And if that is your view, there is certainly a wide variety of technology out there that aims to make the recruitment process more efficient, less biased and most importantly, less expensive.
Invest in a good ATS system that will automatically parse applicant’s CV’s and create a shortlist based on keywords from your job description. Popular ones for small and medium sized companies are Greenhouse and Lever. Use chatbots to coordinate your interview scheduling and if you are really adventurous, perhaps even a robot to complete your first round screening!
And why go to the trouble of creating an internal employee referral portal when there are companies like Weesper and Wanted that do it for you! Just post your job and let the magic of crowdsourcing and networks identify top candidates for you.
However you decide to set up, revamp or reorganize your recruitment or Talent Acquisition function, make sure that it is aligned to your business model and will provide you with maximum benefits while incurring minimal costs.
Need help with your talent attraction strategy? Contact RC HR Consulting to understand how we can make it easy.
Renee Conklin is an HR Leader who writes about talent attraction, employee engagement and the future of work.
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