So what can a growing organisation do to help overcome this talent shortage challenge in 2015? Well traditionally, organisations have chosen to do one of the following:
- Do nothing and continue to rely on job postings, employee referrals and word of mouth.
- Rely on external recruitment agencies.
- Invest in building an internal talent acquisition function.
After nearly 10 years in the recruiting business, I’ve participated in, and observed, all 3 of these options. In my opinion, #3 is by far the smartest choice. Here are 10 reasons why:
1) You’ll have more success
A broad statement to start, but my own observations and personal experience is that organisations with dedicated high performing internal talent acquisition functions are far more successful in reaching their hiring goals than companies that rely solely on job boards and/or external recruitment agencies.
2) You’ll save a lot of money
When compared with the cost of using external recruitment agencies, I’ve calculated that I’ve saved my clients an average of $170,000 per 6 months in each of my previous 3 recruitment gigs. External recruitment agencies are expensive, typically charging anywhere from 15% – 30% of a candidate’s base salary for each placement. This can add up very quickly. In the end, the ROI for an internal talent acquisition function is much greater, and your average cost of placement is significantly reduced.
3) You’ll hire better people
Because they’re dedicating 100% of their day to your specific organisation, a high functioning talent acquisition team will be able to uncover and canvass a deeper pool of candidates than #1 and #2 put together, often finding (and closing!) those ‘diamonds in the rough,’ and ultimately providing more choice to your hiring managers. This means your average quality of hire will naturally increase.
4) You’ll hire faster
Because the best people get snapped up quickly, a good internal recruiter understands that momentum and speed is everything when it comes to hiring. By operating on the inside and having more insight and influence over the internal interview process, an internal recruiter will get feedback quickly and will be able guide the interview process along at a faster pace as required.
5) Your hiring managers will be happier
Because they’re actually part of the same organisation, and often working in the same office, internal recruiters are able to partner with hiring managers to build close, trusting, long-term relationships while opening up effective, high touch communication channels. This enables the recruiter to more accurately understand the unique requirements of every position to better identify a solid, long-term match, which ultimately makes the hiring manager happier.
6) New hires will stay longer
By recruiting from the inside, internal talent acquisition recruiters are able to gain a first-person, deeper understanding of the unique organisational culture as well as the subtle nuances of individual team dynamics. This enables them to more accurately assesses a long-term culture fit which will result in longer tenures for new hires.
7) Your candidate experience will improve
Having a great candidate experience has become a critical part of the recruitment process and can directly impact your hiring outcomes (see my blog on Candidate UX here). By acting as a friendly and knowledgeable supportive ‘point person’ and company ‘ambassador’, an internal recruiter plays a key part in providing great candidate UX to job applicants across the entire interview process, which will ultimately increase your hiring performance.
8) You will have more control of your employment brand
Your employment brand is a very important and valuable part of your organisation. It gives your company a unique identity within the labour market, and is a critical component when it comes to attracting and hiring people with the right culture fit. Internal recruiters live and breathe your employment brand in every interaction with candidates, and they are your key brand-ambassadors to the outside world. Trusting your valuable employment brand to external recruitment agencies who can’t possibly fully and accurately promote your employment brand is a missed opportunity and can be a major risk.
9) You’ll make smarter workforce planning decisions
Your internal recruitment team should have a good pulse on what’s going on in the labour market for your specific niche, and can be a great trusted resource when it comes to making strategic decisions on workforce planning for your unique environment. They’ll be able to advise on areas such as market salary levels, skills availability by location, labour market trends, and specific hiring challenges as well as what your competitors are doing.
10) Your competitors are doing it
Business is competitive and so is the labour market. We all know that the most valuable part of any organisation is its people; therefore, the ability to hire top talent is crucial to an organisation’s success. There has been a noticeable trend over the last few years towards companies investing in internal talent acquisition. In fact, the vast majority of the world’s top companies now have their own dedicated internal recruitment teams. This means that there’s a good chance your competitors are doing it, and will have the advantage when it comes to hiring top talent. They may already be trying to poach your top employees!
2014 wasn’t an easy year for hiring, and by all accounts, 2015 is looking to be even more difficult. If your organisation is serious about growth next year, and about remaining competitive in the long run, then investing in a high performing internal talent acquisition function is very a smart choice.