When the Corporate Executive Board sought to transform recruitment, it turned to its own internal knowledge base and sought help from a global partner.
Businesses across the world often turn to the Corporate Executive Board as a respected provider of knowledge on diverse subjects. With a member network of more than 120,000 professional executives spanning more than 50 countries, 2,500 employees addressing and assessing headline-grabbing business issues, and a roster of blue ribbon clients drawn from 80 percent of the Fortune 500, CEB’s singular research insights have helped countless organizations achieve superior business outcomes. Ironically and somewhat serendipitously, these insights also led CEB executives to consider, pursue, and engage in recruitment process outsourcing (RPO).
One of CEB’s many roundtables in recent years studied recruitment process strategies. When it began mulling outsourcing full-lifecycle recruitment for its growing, global sales executive team, CEB drew from its own well.
“We were able to rely on and use the content and research material from our internal Recruiting Roundtable that we had published on behalf of our membership,” explained Eric Coffey, managing director of recruiting and HR operations at Washington, D.C.-based CEB, which reported revenues of roughly $500 million last year (the company’s stock trades on NASDAQ under the symbol EXPD).
Altogether, CEB boasts more than 4,700 corporate and other clients who subscribe to its membership guidance on corporate strategy, operations, and management practices. Members have digital access to more than 300,000 decision-support tools and resources, including customized research studies and briefs and primary analytic insights, as well as on-site consulting services and support from account management teams and numerous executive education seminars covering a wide breadth of topics.
In the case of its Recruitment Roundtable (one of CEB’s membership programs within the HR practice), the work was crucial in gaining insight into its own recruiting practices, comparing them to the best practices of other world-class organizations and assessing them against the advantages offered by RPO. Like other CEB roundtables, the Recruitment Roundtable is predicated on offering practical insight to help members achieve competitive advantages.
In addition to producing in-depth examples of industry best practices, the roundtable published a study entitled, “Recruitment Process Outsourcing: A Handbook for Scoping, Selection, and Management.” Within its pages was broad research into a wide range of recruitment processes, tools and templates, and something that Coffey calls “general rules of thumb” to consider in engaging and implementing RPO—guidance spanning from the initial RFP dispatched to prospective providers to going live with the methodology.
Several RPO vendors were evaluated by the roundtable in their research; most of them eventually became contenders for CEB’s planned outsourcing strategy. After an intensive selection process, CEB signed a three-year RPO contract with Adecco Group North America in October. The deal calls for Adecco to provide CEB a comprehensive, full lifecycle solution for recruiting sales executives for worldwide deployment.
Raising the Bar
Candidates for CEB’s sales positions are not your average salespeople, given the intellectual and conceptual demands for these executives to reach out to the C-level suites of Fortune 500 clients. Many CEB sales executives hold MBAs from prestigious business schools and universities, putting them essentially on par with prospective client executives.
While the need to reach out to a greater proportion of such candidates around the world was a factor in the outsourcing decision, what really drove it was perceived inefficiencies in CEB’s internal recruitment teams. For one thing, the teams were split in two, one based in D.C. for domestic recruitment needs and the other in London to handle international recruitment. CEB found it difficult for the teams to manage the volume of sales executive candidates and its own fluctuating needs. In times of high demand, the teams, each staffed with permanent recruiters, had to flex up quickly. Often, this involved engaging third-party headhunters and executive search firms to pick up the slack. When demand fell, the organization had to pare outside resources.
“Additionally, at the level of sales-force hires that we make each year, it was difficult to realize economies of scale in the sourcing component of the recruiting process with an internal team,” Coffey said.
In early 2007, CEB employed about 240 sales executives globally. At present, it employs 350, a figure not expected to rise in the coming year because of the economic climate. Outsourcing the recruitment of these executives not only offers the scalability the company desired, it also helped it to achieve best-class status in each of the recruitment phases.
Another identified problem was that recruiters were charged with the full lifecycle of the recruiting process, managing each of the components within as opposed to focusing on discrete elements like candidate sourcing or resume tracking. CEB lacked the volume to justify having the teams specialize in the individual components of recruiting; consequently, its recruiters owned a candidate from the identification phase through job offering.
Finally, CEB wanted a recruitment process that kept pace with its geographic expansion and would be consistent across all global locations, providing access to a caliber and tier of talent that was largely similar to present a single face to prospective clients. “We decided to take a step back to determine if there was a more flexible, scalable, and efficient way to manage the ups and downs of our recruitment needs,” Coffey recalled.
Adecco fit CEB’s goals, in part, because its global footprint nearly matched CEB’s own, Coffey explained. Adecco has more than 33,000 people on the ground at its 6,600 offices in 76 countries, offering flexible staffing and career resources to corporate clients. After the U.S. Postal Service, McDonald’s, and Wal-Mart, it is considered the sixth largest employer in the world. The provider also has deep expertise globally in each recruitment process area: initial workforce planning; candidate engagement and cultivation; candidate assessment and screening; and offer extension and negotiation.
“There’s a lot of smoke and mirrors around global recruitment outsourcing, but we have both the footprint and financial means that truly play into it,” boasted Michael Beygelman, Adecco North America senior vice president. “Helping us nail the engagement, of course, was the fact that CEB’s own roundtable had been assessing data drawn from our RPO case studies, which was unbeknownst to us at the time.”
Adecco, he further pointed out, was not a CEB member, although other RPO vendors seeking the contract were.
From a cultural standpoint, Adecco also aligned nicely with CEB’s client groups, its internal recruiting teams, hiring managers, and the senior leadership of its sales force. CEB client groups are organized by practice area such as finance, marketing, and technology. Nevertheless, CEB went into the RFP process with an “open mind,” Coffey said. It did not rule out the possibility of outsourcing recruitment processes on a piecemeal basis, either to providers in different geographic locations or providers with specialized, global expertise in different recruitment functions. Ultimately, it decided the mix-and-match scenario fell short of the benefits of a single, global provider with local market knowledge and resources.
CEB had several key objectives in its outsourcing agenda, including reductions in its sales executive vacancy rates and costs per hire; full staffing worldwide of the sales executive role; candidates that more closely matched its sales executive profile and quality considerations; improved satisfaction of both candidates and hiring managers; and greater employer-of-choice recognition in the marketplace. In effect, it sought recruitment transformation rather than simply talent acquisition. Coffey and his team felt Adecco offered the consistency worldwide insofar as sales executive sourcing, quality, and retention that CEB sought.
Another consideration was branding. Beygelman said CEB was beset by perceptions among sales executive candidates that “it was a place to work for three years and then leave.” He added that CEB “would get these people, train them, and then they would build up a hell of a Rolodex and make great money only to depart for elsewhere. It wasn’t perceived as a career, not by someone who got his MBA at Wharton or Kellogg. And that contributed to a relatively high vacancy rate.”
The provider was contracted to assist a change in this perception, re-branding the role of the sales executive in the marketplace.
Factors and Figures
While reduced costs weren’t a major driver for the RPO engagement, opportunities to take a machete to expenses were available. Beygelman said CEB’s cost per hire was around $20,000 a head, driven up in large part because of the use of employment agencies in times of high demand. He estimated that CEB’s internal vacancy rates were 180 days to fill. Meanwhile, the company was unable to ever reach full staffing. “It seemed they had 20 jobs outstanding at any given time,” he said.
Adecco’s stated goals in 2009 are to decrease CEB’s vacancy rate by 30 percent, measured quarterly. It also has committed to improving the interview-to-hire ratio from 4.25 to 1 to 3.75 to 1, and reducing the offer-to-accept ratio from 1.4 to 1 to 1.25 to 1. The following year, it hopes to reduce the vacancy rate to two percent. “In CEB’s eyes, this would be unprecedented,” Beygelman said.
Coffey says the company’s vacancy rate was one of the primary reasons for examining RPO as an alternative to internal recruiting. As the organization grew globally, so did the need for a global sales force. Most recruiters, however, were located in D.C. or London, and CEB wanted broader representation across the world. Adecco said it will be able to meet those needs. Domestically, it will manage hiring for all CEB locations from D.C., Chicago, and San Francisco; internationally it will manage hiring in London, New Delhi, and Sydney.
“We didn’t have the local market knowledge, and going with an RPO approach gives us immediate access to it,” Coffey said. “Adecco has the ability to tap into all these regions and knows the local talent pool and the sales-specific talent networks. We could not build that capacity on our own.”
Another key objective is to drive greater volume in the early candidate identification and engagement components of the recruiting process. Given the high bar intellectually and academically for candidates, CEB wanted to review more people early on, gradually whittling them down to a handful of those meeting its expectations. Coffey says its internal teams had experienced difficulty driving this volume consistently because each member was tasked with the full recruitment lifecycle. Adecco, on the other hand, employs greater centralized resources and specialized technology to do candidate research in batch and scale, offering greater opportunities to drive sufficient high volume at the early stages of candidate identification and sourcing.
The last goal of the RPO engagement is greater cost effectiveness, which CEB expects to realize not from reduced internal staff but from reduced external contracting assignments and advertising. Said Coffey: “The outsourced engagement effectively supports the natural fluctuations and variability of our staffing needs in that Adecco can flex up or down as needed.”
Both partners are in the very early stages of implementing the RPO solution and are still transitioning primary responsibilities and activity sets over to the provider. Coffey said he is especially excited about the dashboard technology used in the RPO process. It provides glimpses into current staffing levels, vacancy rates geographically, attrition levels, and internal mobility—situations in which salespeople move into other roles internally or in which junior level executives are promoted to more senior level positions. Traditional recruitment metrics also are featured and regularly updated, including “apply to screen,” “screen to interview,” “interview to hire,” “time to fill” and “offer to hire.” The dash eventually will provide insight into the targeted performance metrics related to the engagement, a work that is still in progress.
Down the line, Coffey said better access worldwide to the best sales executives to join CEB will guide more clients to the company. And to that end, he added: “RPO is certainly strategic.”
The Winning Strategy: Incorporate All Stakeholder Input
Given the Corporate Executive Board’s mission to provide leading-edge business research and analytical insight into the biggest companies and nonprofit organizations in the world, it is not surprising that its workforce is one of the smartest anywhere. Nevertheless, in making the decision to outsource the recruitment of its sales executive force globally to Adecco, the company made sure its hiring managers and internal sales teams appreciated, understood, and supported the changes that were afoot.
Talent management is a key criterion of success for CEB, and the company wanted to ensure that appropriate communication was in place to address any potential challenges or concerns the RPO engagement might foist on its workforce. “We don’t make widgets or have inventory sitting around in a warehouse,” said Eric Coffey, managing director of recruiting and HR operations. “The quality and caliber of our products and services are directly tied to the caliber of the people we have here. Thus, the development of talent has always been one of our paramount objectives and strategic priorities. Raising the talent level of our sales force was a goal of the RPO engagement and a well-received concept.”
Because senior management at CEB supported the RPO strategy, there was very little pushback or reluctance across the organization to engage it. “We had a very receptive organization, both within the HR function and leadership as well as the sales organization and the executive levels of the company,” Coffey said. “That made change management here easier than it might have been in more typical organizations.”
Still, CEB made sure to communicate early and often with key stakeholders and other employees about the planned RPO strategy and sought feedback throughout the process to “pressure test” the methodology, Coffey added.
By incorporating myriad suggestions from HR, senior sales executives, and senior management, each of them effectively became a champion of the RPO strategy, becoming what Coffey calls “agents of change” as CEB moved further into the engagement and its ultimate implementation. “Everyone was on board with the strategy and everything moved forward very smoothly,” he said.
Pictured: The HR team that oversees talent management at the Corporate Executive Board (from top to bottom): Carrie Schenning, Eric Coffey, Melody Jones, Katie Reeves, and Mark Donnelly. (Also on the team but not pictured is Keith Wright.)