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Where Has HR Gone?

HR departments today have an uphill battle just getting replacements for team members who leave, yet a new study finds that, despite anticipated growth, companies are expecting to reduce their HR staff.

Tuesday, September 30, 2014
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During the worst of this most-recent recession, talent-acquisition teams -- along with countless other departments -- were understandably downsized.

However, now unemployment is down to a remarkable 6.1 percent and the employed workforce is growing. So why are talent-acquisition teams still stretched so thin? HR departments today have an uphill battle just getting replacements for team members who leave, let alone building up their department again. In fact, a Hackett Group study found that despite anticipated growth, companies are expecting to reduce HR staff by 2.7 percent.

Some companies have made even more extreme cuts, eliminating their HR departments altogether, or doing away with corporate job postings like Zappos did. For the most part, businesses have small talent acquisition teams that will not be staffed to pre-recession numbers anytime soon.

This leaves the remaining talent acquisition staff under considerable pressure to swiftly hire the right people. On average, each corporate recruiter is responsible for filling nearly 100 job requisitions a year. And they're doing so in a job market that increasingly requires highly specialized talent.

What's being done to support talent acquisition?

With such tight controls on HR costs, bringing more people on board isn't an option. These resource challenges are compelling talent acquisition teams to change how they recruit. Many are turning to RPOs and aggregators, while others are hoping that the latest technology solutions will be the Holy Grail.

*     Recruitment process outsourcing has gained wider acceptance in many industries, as businesses were under pressure to reduce time-to-hire and recruiting costs. For example, the Aberdeen Group found that 43 percent of healthcare organizations are investing in some form of recruitment outsourcing. The "pay by transaction" model they offered is appealing to those concerned about right-sizing their HR resources. While RPOs offer economies of scale, relying solely on a single provider to find the best talent is no panacea.

*     Vendor management systems provide an automated way to procure new talent. They can be very beneficial for solving staff shortages. However, internal recruiters are limited to working with the staffing agencies that are approved within the VMS. In addition, hiring managers often complain that a VMS takes the human insight out of the hiring process. Candidates are reduced to a summary of their credentials, without an understanding of how their soft skills and personality will match with the organization.

*     Aggregators and social-media sites are a great way to get job listings in front of millions of candidates in an instant. Essentially these aggregators offer mass exposure to job listings. This is great for reaching a wider pool of candidates, but still leaves HR with a flood of resumes to cull through.

Similarly, sites such as LinkedIn help employers find candidates who are gainfully employed but who may make a move if presented with an appealing opportunity. These sites have increasingly been the go-to source for finding talent. A Bullhorn Research report found that 64 percent of search firms rely exclusively on LinkedIn for recruiting. Gaining access to these passive candidates is a huge step forward. However, there's still extensive time and resources involved with searching through these sites for the right potential candidates.

*     Data analytics solutions have recently emerged that help organizations more quickly identify passive talent. However, these solutions are only as good as the data they're analyzing. (i.e., if employee resumes and profiles are outdated this stymies efforts and wastes precious resources). Even if candidate profiles were 100 percent accurate, data analytics will only get them so far. The human factor is still necessary when it comes to understanding the nuances of which candidate is just right for which specific role.  

*     Third-party search firms. Nearly 80 percent of companies rely on to augment internal recruiters, according to a recent industry survey. Technological advances across a range of industries, from communications to pharmaceutical research, have spurred a demand for new hires that have very specific areas of expertise.  

A recent Forbes article stressed the major talent crisis emerging in the biotech industry, where there is fierce competition and little room for error. "[Biotech] startups live or die by the talent on its teams," said Forbes Contributor Bruce Booth." This comes on the heels of a PwC report warning that there aren't enough skilled scientists to fill the demand in R&D.

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Ask any recruiter and they'll tell you that finding these skill sets is much tougher than it is to find candidates who are generalists. This has spurred many HR teams to work with specialty recruiters to help fill in-demand roles.

However, finding the right firms for each role has essentially been hit or miss. Employers report that they typically hire specialty recruiters based on a sales pitch or their success filling a previous role, regardless of whether that role is remotely in the same field. And large employers are often stuck using the few external recruiters who are already made it through the arduous procurement process to get into their VMS. Not surprisingly, this leads to lackluster results.

According to the latest North American Staffing & Recruiting Trends report, external recruiters today have an average fill rate of just 46 percent. However, it's worth noting that this often isn't the recruiters' fault. Talent management is no longer simply a generalist's game.

The best recruiters are highly skilled in very specific areas. They gain a true understanding of what it takes to succeed in a particular field and what it takes to entice top candidates in that realm. They have a keen sense of not only which candidates will accept a role, but which ones will thrive in that particular environment. If they're asked to fill a role in a completely different area, it's no wonder they fall short. 

The right technology acts as a force multiplier, freeing HR of rote administrative tasks (not to mention considerable stress) so they can focus on more strategic, higher-value work. However, HR organizations recognize technology alone isn't going to solve the talent-management conundrum. They need the power of technology to maximize efficiency, but they also need insights from specialty recruiters to find the best talent.

HR is already using data analytics in a host of areas. They now need to harness these capabilities to identify which recruiters have the best track record of finding specialized talent. This way, they can clearly see where the best candidates are coming from and replicate those successes.

Sean Bisceglia is president and founder of Scout Exchange in Chicago and Boston.

 

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