By Elliot H. Clark
When Hamlet contemplates âTo be or not to be,â he is actually thinking about suicide, so forgive the title of this column.Â I am not comparing outsourcingâor not outsourcingâto self-destruction. In fact, I donât even think outsourcing isÂ a âstrategy.â It is a tactical approach to achieve a given set of HR-related tasks or outcomes. That is it. It is not a gut-wrenchingÂ test of your philosophical gestalt. It is a big decision to use an external fi rm, but in the modern world of RPOÂ with so many top quality providers, it is an equally big decision to keep recruiting in-house. I have heard of a few bigÂ companies that are now working to bring recruiting back in-house. Most of them will fail.
I have seen this movie before. When the unemployment rate drops below the full-employment level, recruitingâandÂ retention, but that is a subject for another dayâdifficulty rises proportionally. As time to interview and time to fill rise,Â hiring manager frustrations begin to boil over. The object of their displeasure is the recruiting infrastructure. The talentÂ acquisition leadership and the CHRO come under fire and eventually decide their provider cannot get âthe jobâ done.Â Then they will make the momentous decision to bring TA back in-house. Welcome to 2005 and 2006! Itâs back to theÂ future. The main problem is it largely failed back then. Most of the insourced deals wound up back in the hands of aÂ provider after a few years.
There were several reasons for this. One is the economy, not the effort level. There are also systemic reasons for theÂ difficulty that are often at fault regardless of whether the source attends your Christmas party or is an RPO firm. Do hiringÂ managers respond immediately to resumes? Do they schedule interviews within a few weeks of receiving interest? DoÂ they provide quick feedback and make decisions? Do they compare candidates to each other or to the job? Or how aboutÂ the CHRO who once told me she was quite proud that their pay ranges were set to the bottom quartile of the market toÂ ensure higher profitability than her Silicon Valley rivals, but then she couldnât understand why their offer decline rates hadÂ risen steadily since she implemented a salary freeze to accomplish it? If youâre going to look to fill jobs quickly, you haveÂ to accept that wage inflation is part of the competitive labor market and allow for it. If your offers are not competitive,Â neither insourced or outsourced recruitment services will succeed.
In addition, most insourced talent acquisition departments donât have the time or the budget to innovate, deploy newÂ technology, or have the technological firepower of RPO providers for that matter. They simply cannot afford it.
I would hope that the impetus of a few big firms recently going in-house for TA was not because the leaders wereÂ trying to buy a year of respite from the incessant complaints of hiring managers. Because if you are not doing better atÂ recruiting when that year is up, it will be a bloodbath in the HR suite.
In truth, the macro market looks pretty good. The statistical mean for our âQuality of Serviceâ measure in our annualÂ Bakerâs Dozen Customer Satisfaction Ratings for the RPO industry is 251.70âup from the 2018 statistical mean of 234.70.Â A year-over-year improvement of seven percent is not small. Most providers are doing a good job and most clients respectÂ their efforts in an era of record low unemployment in many of the largest global economies, including the United States.
If you are struggling with talent acquisition, answer the questions in the paragraph above before you get to the questionÂ of âin or outâ on the TA team. To view the leaders of this yearâs RPO Bakerâs Dozen Customer Satisfaction Ratings, click here.