Do I really need this?
Following on from the recent post, Recruitment Portals are here to stay; we have collated a number of the most common misconceptions and misunderstandings surrounding their use and value. We ask the question: “Do I really need this?”
Misconception 1: “We are a small company and we don’t recruit much!”
A very small company may only recruit 3 or 4 people a year, therefore is there any point in thinking too much about recruitment and its associated costs?
The answer is that perception is key.
Small companies do not want to be perceived as small companies, it’s not good for business image, for winning large scale contracts, or indeed for hiring talent. They want to be perceived as professional and cutting edge. A Recruitment Portal would provide the same high spec functionality as that of their bigger competitors. But it doesn’t stop there – small companies would also have the ability to attract talent more economically by utilising MyPeopleBiz buying power with candidate supply channels such as recruitment agents and job boards, rather than trying to negotiate something from a position of weakness. After all, it’s no good trying to sell to an agent the concept of reducing their fees if all they are going to be offered is a couple of roles to fill a year. With MyPeopleBiz, a small company can benefit from our collective buying power, agree terms of business, set and fix the fee. Then there is the ability to hire direct utilising our platform consisting of thousands of job seekers. If you hire a couple of your new employees direct, you will have almost paid for your Recruitment Portal and from then on, everything is a cost saving.
Misconception 2: “We are an SME, we employ around 100 people and we are not really doing anything!”
It is true that there are companies out there planning to survive by doing nothing but this in practice is not what it seems. In reality the above statement is made because it feels the right thing to say or it feels like nothing is happening; but when you look at what the recruitment plan is, often most companies will say that they are growing by an average of 10% a year (10 new people) to support the growth of the business and in most cases there is also an attrition ration of 10% (another 10 new people). Put simply, “we are not doing anything and not recruiting” may well be what it feels like when you are immersed in the day to day, but there is a need to recruit 20 people and that is expensive and time consuming. Hence you do need a Recruitment Portal.
Misconception 3: “We use a spread sheet for tracking candidates – we DO NOT need an applicant tracking system or any other system!”
Organising recruitment is not rocket science. While using an excel spread sheet is not an ideal situation, it can be maintained and managed by an administrator. You can put up with emails containing CV’s coming in at you from every angle, you can put up with the odd agency dispute caused by duplicate applications and end up paying two agencies fees for the same candidate. Not using an ATS (Applicant Tracking System) might save you money up-front but it will cost you in the long run. Yes, all of the problems of under investment can be justified, even the over worked administrators who have to put up with the day to day issues can be dealt with, BUT what about the business? Are they being served? Are they getting the best support? Are you really saving any money by doing what you have always done and refusing to update? Here is an example that people don’t think about and it’s a typical scenario. A new role arises and a decision to post the role on some job boards at a cost of £1,000 (to get direct response and save money) is taken as well as calling all the agencies on the PSL and asking them to help you fill the role. An agency sends a candidate in, admin checks to see if that candidate is on the spread sheet and finds that indeed an application had been submitted 2 years ago. This is outside of the agency exclusivity arrangement and therefore the agency that has submitted the most recent application is logged and the candidate duly gets interviewed, gets the job and is hired resulting in a fee of £6,000 for the introduction. Including the money spent on the job boards, it has all cost £7,000. That’s all pretty efficient and it has all worked well.
Now consider how the same scenario would work with MyPeopleBiz.
A new role arises and you post the role on your career portal before deciding how you want to recruit it. You press the “Candidate Match” button and a candidate that had applied 2 years ago is a perfect match and had been bookmarked to your talent pool at the time you interviewed them. You press the contact candidate button and automatically attach the job spec requesting that, if they are interested, to send you an updated CV and apply via your career portal for the job. They duly get interviewed and hired for the job, resulting in a fee of a big fat £ZERO. There has been no admin hassle, all communications have taken place through your portal and are stored in one place. A vacancy history has been stored, the business has been well served, money has been saved and recruitment has been moved into another level. Now the focus can be on the quality of hire, time to hire, cost to hire, employer brand.
You now have a professional, cutting edge Recruitment Portal, accessible from your website providing you with the same high spec functionality as that of your bigger competitors.
Misconception 4: “We want a direct only recruitment strategy!”
The CEO of a fast growing company decided about a year ago that they had enough of agencies and that from now on HR would be banned from using them. The resources would be directed to bringing everything in-house and managing a self-sufficient “Direct only” recruitment strategy. The Company recruits an average of 20 people per month throughout the UK. The HR team has had to grow from 2 people to 12 people to be able to manage and resource the strategy; which consists of social media, job boards, CV databases and internal head-hunters. Because of the cost of people employed, there is no budget for an ATS and the whole thing is managed on a spread sheet.
The average hire is on a base of £25k with OTE of around £40k and previously the recruitment agencies were supplying candidates at 10% on a PSL resulting in an average fee of £2,500 per hire. So under the previous agency strategy, recruiting 240 people would have cost £600,000.
Now with HR team salaries averaging £30k for 12 people £360,000 plus NI £46,800 plus factoring in desks, laptops and all other employment associated costs, which is difficult to guess but we will use the service office model and allocate a cost per desk of £300 per employee per month costing £43,200. There are 12 job boards used ranging from Reed, Monster, to specialist sales & marketing boards plus LinkedIn, Facebook, Twitter and a number of CV databases that are subscribed to annually in order to acquire candidate names, identities and contact details at a cost of £90,000. Total cost of the direct strategy is £540,00 A saving of £60,000, but a huge increase in risk.
We suggested a Recruitment Portal with a multichannel recruitment strategy.
The portal including the career site, ATS, communications suite, interview management system, 2 user licenses , all jobs being “socialised” to the social networks by MyPeopleBiz, all jobs appearing on job board aggregators at a cost £14,690. We would purchase job board credits at our reduced rates amounting to £72,000
Results show that:
- 50 % of the recruits (120) will be “no-fee” candidates generated by people coming directly to the company’s Recruitment Portal, social networks and job boards.
- Referrals will account for another 20% of recruits and utilising our unique referral schemes, these will cost £147,000.
- Finally, the use of recruitment agencies for the remaining most difficult to fill jobs (72) will result in £180,000.
The total cost of a professional system and multichannel approach cost £383,690 representing a saving of £216,310.
Even if you take the view that the office space doesn’t cost you and the laptops are free, etc; you may be able to lose £43,200 of costs, bringing the direct strategy down to £496,800. You could take the view that you may need two extra administrators to the Recruitment Portal approach with an additional cost of £60,000, meaning that you increase the MyPeopleBiz costs to £425,690, but compared to going completely “direct strategy” route, it’s still a saving £53,110 in year one.
Has the business been served? Are they getting the right or best support? Are you really saving any money by not having an applicant tracking system? The Holy Grail of direct only is not always what it may seem.
Misconception 5: “We do not have time for all of this, besides we like our agencies and want to continue to use them!”
I am never too sure what this statement means, but I guess it is saying that the team is far too busy to look at the recruitment service it provides to the business and whether that service is providing value and the quality required. I assume that it is also saying that managing a spread sheet or paper application process is time consuming and mind numbingly boring, which I understand. I guess it’s also saying that we don’t have either the time or the inclination to go outside of the agency candidate supply channel because it “fills me with dread”, which again I understand. Finally, having built up valuable relationships with certain agents, I completely understand why you would wish to maintain those relationships.
So let’s deal with some of these myths starting in reverse order.
Implementing a Recruitment Portal does not change your relationship with a recruiter. It simply means when they submit an application, it automatically goes into your tracking system rather than to your administrator to input into a spread sheet. You can use the same PSL if you so wish, you can continue to pay the same fee levels if you wish, although using our buying power you can also reduce those fee levels, fix them and agree your terms online. But you can continue to talk to your agents in exactly the same way as you always have.
Being far too busy to provide the right service to the business is an issue and we can help you to change that by providing you with a professional, cutting edge Recruitment Portal. This can be accessed from your web site, providing the same high spec functionality as that of your bigger competitors with a complete ATS, communications suite and interview management.
You will have the ability to attract talent more economically without the hassle of having to do it yourself, by utilising our platform which consists of thousands of job seekers from social networks and job boards. If you hire a couple of your new employees direct, you will have almost paid for your Portal. From then on, everything is a cost saving and you will have more time to support the business in other ways such as development, appraisals etc.
Contact us for further information email@example.com.