3rd 4th November 2009 - Donald E Stephens Convention Centre, Chicago
Recruitment Outsourcing for the Wrong Reasons
A recent survey from Ochre House found that many companies are using recruitment outsourcing for the wrong reasons.
Ochre House, a talent management specialist, surveyed more than 100 companies throughout Europe. The survey found that the main driver behind outsourcing HR functions, such as recruitment, is cost savings. However, the levels of savings that many companies are expecting are note being met.
The expected levels of cost savings averaged at 37 percent, while savings levels actually achieved only reached about 18 percent.
“Price was, of course, a factor when we got to final negotiation stage but it wasn’t the one that got us there in the first place," Simon Patton, HR director of Somerfield, said. Yes, you can make cost savings through outsourcing recruitment, but this should never be your major driver. Efficiency, simplification and added value are the three areas where you make the real wins and if you are focused purely on the bottom line you risk being disappointed.”
Of the companies questioned that rated outsourcing "successful" or very "successful," none said cost savings was a "very important" factor in their decision to outsource. Factors that did rate highly included more efficient recruitment processes, specialist external expertise and improvement to their employer brand.
“In the current economic climate there are a lot of organizations which seem to view outsourcing as a ‘magic bullet’ that can help solve their financial problems overnight and consequently end up being disappointed,” Ochre House director Sue Brooks said.
“The outsourcing of recruitment can deliver genuine and measurable savings but only if it is part of a wider agenda," she added. "A significant reduction in labor costs doesn’t come as a ‘quick fix’ but through addressing the whole talent management spectrum from sourcing to engagement, training and development and retention.”
Ochre House, a talent management specialist, surveyed more than 100 companies throughout Europe. The survey found that the main driver behind outsourcing HR functions, such as recruitment, is cost savings. However, the levels of savings that many companies are expecting are note being met.
The expected levels of cost savings averaged at 37 percent, while savings levels actually achieved only reached about 18 percent.
“Price was, of course, a factor when we got to final negotiation stage but it wasn’t the one that got us there in the first place," Simon Patton, HR director of Somerfield, said. Yes, you can make cost savings through outsourcing recruitment, but this should never be your major driver. Efficiency, simplification and added value are the three areas where you make the real wins and if you are focused purely on the bottom line you risk being disappointed.”
Of the companies questioned that rated outsourcing "successful" or very "successful," none said cost savings was a "very important" factor in their decision to outsource. Factors that did rate highly included more efficient recruitment processes, specialist external expertise and improvement to their employer brand.
“In the current economic climate there are a lot of organizations which seem to view outsourcing as a ‘magic bullet’ that can help solve their financial problems overnight and consequently end up being disappointed,” Ochre House director Sue Brooks said.
“The outsourcing of recruitment can deliver genuine and measurable savings but only if it is part of a wider agenda," she added. "A significant reduction in labor costs doesn’t come as a ‘quick fix’ but through addressing the whole talent management spectrum from sourcing to engagement, training and development and retention.”
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