HR and the bottom line

Human Resources, somewhat unfairly, is often required to be the steady campaigner for its role in an organisation's livelihood and performance.  The division charged with managing an organisation's biggest asset is often the first to face cost-cutting at budget time, and be challenged to tighten operating expenditure year upon year.

Increasingly HR professionals are looking to technology to make a positive impact on the more transactional aspects of their division's workload.  Visionary managers are seeking new ways of returning savings to the business so that they can get on with implementing more strategic HR practices.

The recruitment function has been one of the most recent transaction-based components to undergo a review, in what appears to be a complete turnaround from an inclination in the past decade of outsourcing to agencies.

Some companies already choose a hybrid approach in their recruitment process, electing to farm out separate components of the process, such as advertising, reference checking or psychometric testing, and manage the bulk of the administrative effort and interviewing in-house.

In the search for new ways the recruitment function can add more value to the bottom line, the focus of late has been on putting it online.  It's no longer just the early technology adopters who are taking the leap with recruitment software.  It seems that the typical gap between innovators and mainstream buyers is definitely closing, as many organisations begin to reap significant rewards from a new, more efficient recruiting model.

The changing recruitment landscape

Recruitment has evolved through several different operational modes over the past two decades.  Commission-based agency solutions were welcomed in the 1980s as an alternative to managing a predominantly paper-based and time consuming process.  Job boards looked like a threat to agencies in the 1990s, but were soon recognised to be a useful ally in the game, offering an effective and inexpensive way to reach a large audience of job seekers.

And indeed it was large.  The trouble with recruiting via the Internet in the 1990s was the tools to quickly and effectively screen masses of candidates down to a quality shortlist simply didn't exist.  Internet job adverts attracted vastly more applications, from all over the globe, but in many cases just made the job for the recruiter a bigger, more difficult task.

The e-Recruitment wave of the 2000s has addressed this volume issue, and is the reason we are seeing many companies shift yet again to a new recruiting mode.  With the tools to manage recruitment drives simply and effectively, a growing number of companies are choosing to carry out their own company and job-specific targeted candidate filtering. 

Recruitment agencies have evolved their offers along the way, also taking their business online, and looking at ways of adding value, either by personal touch, or jumping on the e-bandwagon and providing a quicker, smarter screening service for their candidates and clients.

How does an online solution work?

The trend is for companies to integrate careers sub-sections into their websites, so that prospective employees can either apply directly to available jobs, or simply register their interest in working for a brand.  Companies have effectively become their own agencies, inviting 'passive' job seekers into a database for future consideration when roles become available.  Companies with high-turnover divisions such as call centres have been first to recognise the cost benefits of having a pool of available, pre-screened talent at their disposal.

Company career sites usually provide a facility for job seekers to create a personal account with an email address and password, which they can revisit and update.  Job seekers provide information about themselves via an online application form, and are able to view a list of job openings. Targeted questions related to job roles are replacing standard 'Attach CV' functionality, to capture exactly the required information, and allow for quicker and unbiased comparisons by employers.

Big job board players such as Seek and netcheck have evolved their offers, reacting to customer demand by providing links from their job adverts to external career sites, allowing for direct entry of candidate information into a company's talent pool database.  This represents a huge step forward as far as employers are concerned, now avoiding being bombarded with masses of emails from candidates with differently formatted CVs and irrelevant information.

What sorts of companies are going online?

As recruitment carries the same costs, no matter how small or well-funded an organisation, the uptake for online solutions has spanned across all company sizes and industries.

Qantas and Virgin Blue Airlines in Australia report substantial cost and time savings now that they are recruiting all their cabin crew positions online, and are delighted that the feedback from candidates has been extremely positive and supportive of their new model.

Counties Manukau Sport uses online technology to invite people inside or outside the district wanting to be involved in sport and leisure on any level to register their interest and credentials, or apply directly for a job.  Craig Glendinning, Acting Operations Manager points out that "All companies face competition when recruiting for the very best people.   The sport and leisure industry is no different".  He says that the company has saved a lot of time, money and paperwork in recruitment, and even avoided advertising altogether by searching their talent pool to fill a recent position.

In the not-for-profit sector, The Royal NZ Foundation for the Blind reports significant cost savings in a job market where they compete with highly-funded corporates for the same talent.  "Sophisticated online tools allow you to easily distinguish between people with good skills fit and those with good cultural fit.  That's not something you can pick up from just a CV" points out Jeanette Manson, Divisional Manager, Fundraising.

How does online recruitment stack up?

Like any technology project, an online recruitment solution must deliver a definite return on investment (ROI) and realistic payback period. 

Gayleen Robinson, StaffCV Marketing Manager explains the metrics used to measure the effectiveness of online recruitment. "Companies can measure the direct costs of recruitment by looking at employee time spent on administration, the cost of advertising and communications, and use of agencies".

In a simple case example comparing manual and online methods with the cost of an agency commission, the cost of recruiting one person into a role paying a $32k salary, with a $1000 advertisement budget can range between $1200 and $6100.  The cost factor most likely to vary is time.  In this example, with a total of 80 job applicants, all communication, tracking and short listing took forty hours to complete manually, and around six hours using an online system.
 
The unavoidable administration component of recruiting is estimated to churn up fifty percent of the entire placement cost.  Robinson says that some clients that have moved recruiting online estimate administrative time savings of up to ninety percent. "We base our ROI estimates on a seventy-five percent time saving, which is considered conservative".

"What you can't put a value on is the goodwill you develop with job seekers and the enhancement of your brand.  You may also improve the payback of your total website investment, now that it's delivering more streamlined business process and increased efficiency".

Advertising is also a cost that is predicted to reduce over time as company talent pools grow, and more use is made of online advertising via job boards.

How do job seekers find the process?

Job seekers moved to the Internet long ago, clearly giving employers the go-ahead to target them via this channel.  Internet job advertiser, Monster, recently attracted some 54,000 resumes in one day as a result of its advertising during the US football Super Bowl - surprisingly, from a 'blue-collar' job marketing campaign.

The benefits to job seekers of using the Internet are significant.  Surfing is less expensive than purchasing print media, job seekers find at least four times as many jobs advertised than in print, and with greatly detailed job descriptions.  Searching is a lot more targeted and faster online than sifting through newspapers.

Robinson explains the need to understand what job seekers today expect from online channels. "In order to ensure our recruiting model fits with expectations and requirements of job seekers, we survey candidates about what they think of StaffCV-powered websites and the application process".

Job seeker responses have been unanimously positive.  All short listed candidates for a recently filled client role said that the process was the most fun, easy and enjoyable way of applying for a job.  What appealed most was the fact that candidates knew that they were providing the company with exactly the information they needed, rather than posting a CV and "hoping it was what they were after".

Measuring more than just skills

A key advancement in the online recruitment model has been the introduction of integrated psychometric profiling capability.  It's become a necessary partner of skills-based assessment, in order to effectively filter increased numbers of applicants from the Internet.

Psychometric profiling adds a valuable extra 'lens' after initial targeted screening, that allows for one-to-one comparisons to benchmarked employees who are considered 'star performers'. This type of profiling can even be used to measure candidate job suitability, in other words, how well a candidate is matched to a given role type and its key job goals.

March 2003