RSM Australia

Building Effective Recruitment Functions

The recruitment team should seek out the best candidates and proactively bring them to the organisation. Recruitment is the most important HR function. Unless organisations attract and hire the right talent they cannot hope to achieve their full potential.The recruitment team should seek out the best candidates and proactively bring them to the organisation. Recruitment is the most important HR function. Unless organisations attract and hire the right talent they cannot hope to achieve their full potential.

Recruitment is very important for a business to reach its full potentialRecruitment is the most important human resources function. It impacts almost everything an organisation does. Unless organisations attract and hire the right talent they cannot hope to achieve their full potential. Worse still, less than ideal hiring outcomes can diminish an organisation’s ability to retain existing talent putting at risk its overall brand. Recruitment is also a critical service for meeting day-to-day operational needs. It analyses organisational workforce needs and then seeks to meet these with utmost efficiency. Unless it delivers efficiently, organisations suffer from unmet needs, creating costs and unwanted stresses.

But, many organisations, especially large and complex organisations, have allowed recruitment to become a service bound by its own rules and increasingly divorced from organisation’s outcomes and success. Many recruitment professionals focus on execution of the “ideal processes” rather than on selection of the ideal candidates. As the focus on outcomes is overtaken by process execution and compliance, the effort and timeframes required to meet organisational talent needs increase, despite the hard work of recruitment staff.

At RSM we have helped many clients review and improve their recruitment functions. Based on this experience we advocate an approach to recruitment performance improvement that firstly resets the focus of the recruitment team to be more on outcome achievement and less on process execution and compliance, while also reviewing business processes to eliminate waste and non value-adding activities. We do this by applying our modified LEAN process improvement approach.

Less than ideal hiring outcomes can diminish an organisation’s ability to retain existing talent putting at risk its overall brand.

Our Approach

When helping to improve recruitment performance we focus on how to achieve the best business outcome with the best efficiency. This means that first identify what the real business outcomes are and then address any issues, barriers and process waste that affect their achievement. RSM does this by execution of our modified LEAN process improvement methodology. LEAN’s ultimate goal is waste reduction whilst simultaneously maximising customer value. It works by identifying, prioritising and eliminating waste along entire value streams, instead of at isolated points, and creates processes that deliver better outcomes with less effort, less space, less capital, and less time.

We start by defining the problem in terms of the business outcomes and metrics that the recruitment function can affect. This may not be what you think! For example, many recruitment executives would agree that business outcomes are best impacted by hiring of a suitable candidate quickly once a vacancy is identified; often leading to a strong focus on managing or reducing the “mean time to hire”. However, RSM would challenge this and suggest that a better outcome could be achieved by minimising vacancies (as measured by the total number of days positions remain unfilled). By moving the emphasis from just being on quick hiring once a position becomes vacant, recruitment can also focus on hiring candidates who will endure and not resign, developing a pipeline of pre-assessed candidates who will join the organisation when there is an opening, and finding deeper and more specialised talent pools from which to attract potential candidates.

Our process improvement methodology works by identifying, prioritising and eliminating waste along entire value streams, and creates processes that deliver better outcomes with less effort, less space, less capital, and less time. 

A Case Study

Members of the RSM consulting  practice were engaged by a large Canberra-based organisation to assess its recruitment function.

This large and complex organisation has many functions, including substantial customer facing and shopfront operations and equally large financial risk management and mitigation functions, in addition to operating a large corporate services capability in the areas of HR, finance, legal, and ICT services. To meet its needs for talent, it had operated a substantial recruitment function for many years. However, the general sense was that its recruitment function was “broken” and had been so for some time. Known issues were a long time to recruit, a complex process with many manual steps, and a high reliance on paper. 

Our team was engaged to investigate and to discover where the organisation could make improvements. This included analysis of the organisation’s recruitment strategies, services, structure, business processes and use of automation and technology. As well as working with the recruitment professionals, our team engaged with the organisation’s business and operations leaders, broader human resource management owners, new employees and candidates to understand how they each saw and experienced recruitment services.

The result was a set of recommendations that would transform this struggling recruitment function into a lean and effective service with a minimum of cost and disruption.

Our team delivered a set of recommendations to transform this struggling recruitment function into a lean and effective service.

Measure

The measure phase of the review revealed some alarming performance facts.

 

FINDING

IMPLICATION

1 - Recruiting took a very long time

Average of 75 days end- to end (industry average: 27 days).
Average of 40 days to run the selection phase (Industry average: 18 days).
Average of 9 days to issue a letter of offer once selection was complete (Industry average: 4 days)

A very long process means that the best candidates find other jobs before they receive an offer – extending the process even more, and reducing the quality of employee.

2 - Almost half the people hired (for externally advertised jobs) were already employees

47% of the vacancies were filled by existing employees.
47% of the vacancies were filled by candidates who were new to the industry.
Only 6% of the hires were filled by candidates from other industry players.

Hiring their own staff for 1 out of every 2 vacancies created more recruitment work to back-fill the hired person’s position. The very low intake from other industry players meant higher costs to get new employees effective and may have contributed to the high rate of new employee resignation.

3 - 25% of new hired resigned in the first 6 months

Of the new employees hired, 25% resigned in the first 6 months.

A high rate of resignation meant re-recruitment

Costs and lost productivity.

4 - Orders of merit were not used effectively

Despite creating orders of merit in 28% if recruitment events, only 8% of “approved” candidates were hired to subsequent vacancies

Failing to use orders of merit information adds cost through unnecessary new recruitment work, and can affect brand if previous applicants discover that they have not been contacted.

5 - The advertising strategy didn’t work

Strategy included daily broadsheets and the organisation’s website.
50% of advertisement text focused on the organisation with only 40% on the role.
Only 15 applications received per print media advertisement. 6% of advertisements attracted no applications. Choice of where to advertise was left to the hiring business area whom likely had little understanding of where to advertise for the best effect.

The advertising strategy led to a candidate pool that was skewed to existing employees and new Industry entrants. A lack of clarity regarding the real role may have contributed to the high rate Of new employee resignations.

6 - The recruitment team didn’t do much recruitment

On average recruitment staff spent only 2.2 hours per vacancy, as opposed to an average 8.5 hours by other key process participants (interviewers, hiring managers). Recruitment staff serviced around 2,000 vacancies per year (4,400 hours or 3 FTE), yet they had a team of 45 people. Many vacancies were filled without the recruitment team ever meeting or speaking to a candidate.

The team had created work to keep itself busy at times of low demand—mostly associated with planning and compliance assurance activities. However, despite a strong focus on compliance assurance, 20% of recruitment case files were either missing or had incomplete information.

7 - There was a lot of paper moving around

15-page form to “request an advertisement”—only 2 pages related to the position. 23 forms in the end-to-end recruitment process. Mailed correspondence over emailed. Manual files (in addition to electronic)—noting that archiving costs were estimated at $2 per file per year (10,600 currently held), and $7 to transport.

The organisation was operating a paper dependent and paper producing business process that, in addition to being inefficient and slow, was adding to the compliance burden of the team.

 

Analyse

To find the root cause of the performance problems we analysed the current situation across five domains.

 

CURRENT STATE

FUTURE STATE

Strategy – was the recruitment strategy leading to the right outcomes?

No. The agency operated a “firehouse” model with recruiters waiting for a vacancy to occur rather than a “proactive” model (e.g. recruiting to forecast vacancies).

Yes. The recruitment function should be proactive, for example recruiting to the “forecast” demand and not for the specific vacancies only (thus smoothing demand and

Avoiding the firehouse model in place today).

Scope of service – was the scope of services offered by the recruitment function right? Should the function do more or less?

No. The scope of services was narrow and gaps existed in the service catalogue that should be filled.

Yes. The recruitment team should become the main actors in the process (rather than just moving paper and acting as compliance officers). They should seek out candidates and

Proactively bring them to the organisation.

Recruitment service delivery model – Did the recruitment service delivery model align the scope of services and the business processes to focus on achievement of the right outcomes?

No. The service delivery model was inefficient and did not deliver effective results or enable efficient achievement of the right outcomes.

Yes. The business process should be modernised and simplified. Formal panels should only be used as an exception for most positions.

Recruitment processes – were the processes efficient in both designs and execution?

No. The processes were neither efficient in their design or in their execution, despite best efforts of managers to maintain through-put to manage work on hand.

Yes. The business process should be modernised and simplified. Formal panels should only be used as an exception for most positions.

Automation and technology – was technology used effectively to automate and facilitate the process?

No. However, this agency had separately reviewed its ICT capability and was planning to invest appropriately.

Yes. The organisation should invest in an endto-end eRecruitment tool, eliminating the need for data to be entered more than once.

Paper files should be discontinued in favour of digital records.

Improve

We made 39 recommendations focused on addressing the root causes of the organisation’s problems. These combined to offer a savings opportunity of over $5.5 million in recruitment team effort alone, to say nothing of the effort of non-recruitment staff.

While $5.5 million in direct cost savings is in itself a fantastic benefit, much more would be achieved as a result of attracting and hiring better candidates, avoidance of delays, and reduced rates of new-hire resignation.


The recruitment team should seek out the best candidates and proactively bring them to the organisation.

For more information about this article, please contact your nearest RSM Office