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Cost of HireCost of Hire WhatWhats the reals the realCalculation?Calculation?
What do Agencies have to Offer?What do Agencies have to Offer?
Presented by Kevin WheelerPresented by Kevin Wheeler
2004 RCSA Conference2004 RCSA ConferenceMelbourne, AustraliaMelbourne, Australia
September 10September 10thth 20042004
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Global Learning Resources, Inc., 2004 2
What are the Talent MarketWhat are the Talent Market
Gorillas?Gorillas?
Technology has allowed the number ofapplicants to go UP.
Lack of precise criteria and poorscreening has allowed the number ofqualified applicant to go DOWN.
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Therefore, quality is LESS THANEXPECTED.
Costs are GREATER THAN PERCEIVEDVALUE.
Big concerns over in-sourcing recruiting
vs. outsourcing.
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Good People are Good forGood People are Good for
BusinessBusiness
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Value of QualityValue of Quality
A modest improvement in talent can doublethe market capitalization of a softwarecompany. -McKinsey
All that separates you from your competitionare the skills, knowledge, commitment, and
abilities of the people who work for you.Companies that manage people right willoutperform companies that dont by 30 to 40
percent.
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Yet. . .Yet. . .
Only about 30% measure quality, upslightly from last year. Staffing.org
The vast majority still put their faith inthe front end--a rigorous selectionprocess--to ensure that they get a
"quality" employee.
Source: Workforce Magazine & Staffing.org
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What isWhat isQualityQualityof Hire?of Hire?
No standard definition For many, subjective definitions suffice:
Perceived fit into organization
Match between hiring manager and hire
Likeableness
Social and educational parallels
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What isWhat isQualityQualityof Hire?of Hire?
For others there are more objectivedefinitions:
Time to productive output
Amount produced Dollars earned/sold
Measurable skills/capabilities
Customer satisfaction
Return business
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What is aWhat is aQualityQualityHire?Hire?
Anyone who produces at or abovestandards consistently, fits into theorganization, and has career potential.
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Agencies should be seen as thebest source of the highest quality
candidates!
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How Are Search Firms PerceivedHow Are Search Firms Perceived
by Corporate Clients?by Corporate Clients?
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Recent Study in AustraliaRecent Study in Australia
Australian study of ARAs and ESFsAlan Fish and Robert Macklin of Charles
Sturt University
Surveyed 109 HR professionals members of Australian Human
Resources Institute (AHRI)Asked to rate agencies on 31 factors
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Discrepancy Between ImportanceDiscrepancy Between Importance
and Perceived Quality Receivedand Perceived Quality Received
1. Having wide access to the market
2. Understanding the client organizations needs
3. Quality of the candidate database
4. Communication skills
5. Understanding the vacancy
SOURCE: Perceptions of executive search and advertised recruitment attributes and service quality, Fish &Macklin, Personnel Review,Vol 33, No 1, 2004
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Agency SearchesAgency Searches
Slower (> 30 days) Certainly not cheaper (>3-6x more)
Quality is not necessarily perceived asbetter
Retention rates vary and probably areno better than employees from othersources
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Your Value Proposition Has to Be. . .Your Value Proposition Has to Be. . .
Access to better candidates; Knowledge of the talent marketplace;
Delivery of more qualified candidates;
Delivery of the highest quality candidates;
In an acceptable time frame;
Fewer bad hires; At an acceptable value/price ratio.
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Rising Corporate ConcernsRising Corporate Concerns
Key objectives of many organizations: Reduce use of outside agencies
Reduce number of outside agencies
Increase proprietary web site usage
Increase use of internal employee pools
Increase use of referral programs Hire recruiters with agency backgrounds
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Agency HurdlesAgency Hurdles
Job analysis dependent on hiring authority
No access to internal talent
No methodology or incentive to recommend
internal talent Limited understanding of business strategy or
future needs
No proof of competitive advantage
Higher costs without higher quality
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Three Challenges for AgenciesThree Challenges for Agencies
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Challenges OneChallenges One Client Management
Establish long-lasting, on-goingrelationships with employers
Circumvent HR get to hiring authority Issues:
Competition Limited candidate pool
Limited time horizon Lack of in-depth insight into employer needs No control over job interview Difficult access to hiring authorities
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Challenge TwoChallenge Two
Candidate Management Convince candidates to consider an
employer
Issues: Always some degree of manipulation from all parties
Have to sell candidates on jobs/movement and
employer. Candidates are trying to manage the recruiter.
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Challenge ThreeChallenge Three
Impression Management Creating how candidates regard them
Creating how employers regard them
Coaching candidates
Coaching hiring managers
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WhatWhats Going On?s Going On?
Agency process hasnt really changed in50 years.
Value proposition based on developing
and nurturing personal relationships,building client loyalty, physicalproximity, generating a large candidate
pool.Value derived from volume and cost.
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The Changing PerspectiveThe Changing Perspective
Traditional Emerging
Requirements:
-Flexible workforce scenarios-Interactive communications
Static, One-time
Requirements:-Logistics-Static workforce planning-Sourcing capability
Dynamic, on-going
ReactiveFocus on open positions
ProactiveAnticipate needs
-Running ads-Posting to job boards-Searching databases
-Building a talent pool-Developing relationships-Development focus-Competitive intelligence
Value: volume / cost Value: quality / speed
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I t i s t he forem ost t ask andrespons ibi l i t y of our generat ion t o re-imag ine our ent e rp ri ses, p r i va t e andpub l i c .Tom Pet ers, Re-imagine!
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Some Ways to Improve YourSome Ways to Improve Your
Value and Candidate QualityValue and Candidate Quality
1. Sophisticate the supply chain - Supplymarket information
2. Partner with your clients - Learn more
about their talent needs3. Streamline your processes - Integrate
new technologies
4. Develop metrics you live up to Providea guarantee
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1. Sophisticate the Supply Chain1. Sophisticate the Supply Chain
Value comes from market knowledge,reach, total customer service andcommunication.
Traditional talent supply chain is nolonger linear nor does it add enough
value.Candidates Agency Company
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New Supply ChainNew Supply Chain
Agencies
CompanysCustomers
ActiveCandidates
InternalCandidates
F i r m
PassiveCandidates
Others. . .
The supply chain is complex, global and intertwined with
development.
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ImplicationsImplications Offering market knowledge sharing tools, skill
building programs and social networkingservices can add immense value.
Find a way to take the internal supply chaininto account even to get paid to placeinternal talent.
Educate customers and candidates andexpand supply types.
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2. Partner with your Clients2. Partner with your Clients Develop formal partnership plans with your
clients.
Spend time to learn organizations strategic
plans. Know where they have talent pain. Offer to be a part of talent discussions based
on your superior talent market knowledge.
Develop private employment exchanges.
Leverage technology.
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3. Streamline Your Processes3. Streamline Your Processes
Technology drives all change. Streamlined fulfillment systems
(automated tracking, offer and
screening).
Online delivery systems (talent pools).
Tools to communicate personally anddeeply with candidates and employers
worldwide instantly.
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4. Develop Metrics4. Develop Metrics
Provide customers with detailedmeasures.
Partner with clients to get access to
facts, numbers.
Help them measure quality, speed,
cost.
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Historical Agency RolesHistorical Agency Roles
B r a n d So u r c e Sc r e e n A s s e s s Se l l
Of f e r Or i e n t Re t a i n Pl a n
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Future Agency RolesFuture Agency Roles
B r a n d So u r c e Sc r e e n A s s e s s Se l l
Of f e r Or i e n t Re t a i n Pl a n
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Surviving/Thriving AgenciesSurviving/Thriving Agencies
Offer Employers: Low cost solutions
Higher quantitative quality
Convenience One-stop shopping
Flexibility
Broad, global reach
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Surviving/Thriving AgenciesSurviving/Thriving Agencies
Offer Candidates:
Negotiation
Choice
Education/Guidance
Relationship
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There is Great OpportunityThere is Great Opportunity
E-Recruiting is a US$7.1 billion dollarbusiness.
Candidates and employers are more
technology savvy.
Talent supplies will be constrained for
the next 30 years.
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What is the Cost of Hire?What is the Cost of Hire?Your ability to provide differentiated
services.
Your capability to offer a talent solution
to a business need.Your foresight in understanding the
emerging talent marketplace.
Your reliability in delivering a qualitycandidate.
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The greatest dangerThe greatest danger
for most of usfor most of us
is not that our aim isis not that our aim istoo hightoo high
and we miss it,and we miss it,but that it isbut that it is
too lowtoo low
and we reach it.and we reach it.
MichelangeloMichelangelo
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Thank You for Listening!Thank You for Listening!
Kevin WheelerKevin Wheeler
www.glresources.comwww.glresources.comkwheeler@[email protected]
http://www.glresources.com/http://www.glresources.com/http://www.glresources.com/