RecRuitment business contingent Human caReeR tRansition executive
pRocess pRocess woRkfoRce ResouRces & oRganisational seaRcH
outsouRcing outsouRcing outsouRcing consulting effectiveness
Think ouTside.
global RPo
RePoRT 2008


global 01 (3) 08 (15–16)
RPo RePoRT Preface global hiring intentions
2008 02 (4) 09 (17–19)
contents executive summary internal recruitment
functions
03
10
(6–7)
introduction (20–23)
The decision
04 (8)
to outsource
a profile of respondents
11 (24–25)
05 (9)
estimating the real
cost of recruitment
The outsourcing
phenomenon
12 (27)
06 (10–12)
appendix 1
The recruiting challenge
13 (28)
07 (13–14)
about sponsors
The vanishing
global workforce
graphs g1 (8) Size of organisations that took
part in the survey
g5 (15) Anticipated permanent, temporary
and university graduate hires in 2007
g8 (17) Number of internal staff that
form the HR recruitment team
g12 (21) Areas most frequently
outsourced (%)
g2 (9) Level of familiarity with RPO (%) g6 (15) Main job categories to be g9 (18) % of internal HR/recruitment g13 (21) Job types most likely to be
g3 (10) Main factors causing difficulties filled in 2007 (%) team on recruitment duties only outsourced (%)
in recruiting staff (%) g7 (16) How organisations plan to use g10 (19) Technology used to source g14 (22) Main expectations of an
g4 (11) Conditions that have slowed or recruitment firms (%) or track candidates outsourcing partner (%)
stalled the hiring process (%) g11 (20) Organisations currently g15 (23) Main criteria for selecting
outsourcing recruitment (%) an RPO partner (%)
g16 (25) Average cost per hire


global RPo RePoRT 2008 | 3
01 preface Pam berklich, senior Vice President, kelly outsourcing and Consulting group, and hRoa Trustee
Richard J. Crespin, global executive director, hRoa
01 Preface
02 executive
summary
03 introduction
➔ “It gives us great pleasure millions of baby boomers leaving on more strategic roles within their
04 a profile of
to introduce the Global RPO Report the global workforce, together with organisation. This report highlights respondents
2007 and to share its many findings the lack of appropriately qualified the growing importance of RPO 05 The
outsourcing
with you. We live in rapidly changing candidates required by industry and how it has spread from the phenomenon
times, affected by events like the and the subsequent war for skills US through Europe to the rest 06 The recruiting
challenge
that this adverse talent shortage of the world. It is interesting to
07 The vanishing
is producing. Overworked HR learn how many of the senior HR global
workforce
departments in companies of all managers surveyed in this report
08 global hiring
sizes are finding it harder, more face recruitment shortages in their intentions
complex and time consuming to find local markets that are replicated 09 internal
recruitment
the quality and quantity of talent worldwide. While not a magic functions
they need to fuel their company’s wand, RPO is proving to be the 10 The decision
to outsource
growth. RPO offers organisations intelligent solution to combat the
11 estimating
the opportunity to outsource the increasingly complex battle for skills. the real cost
This insightful report follows the path of recruitment
increasingly high skilled, high tech
12 appendix 1
recruitment process. This creates of early RPO adopters, shares best
13 about
a ‘seamless centre of excellence’ practices and listens to the challenges sponsors
for the recruitment process, while they face in many established and
allowing HR departments to focus emerging RPO markets.”
■ ■ ■


global RPo RePoRT 2008 | 4
02 executive There is a trend of strong underlying
demand for skilled workers in a
Many seem to be under-staffed and
overworked with some 40% having
Almost three quarters of
organisations will use recruitment
01 Preface
02 executive
summary majority of countries surveyed.
Almost half of respondents
two or less internal staff devoted
to recruitment and more than 50%
firms to recruit anticipated hires in
2007. The overwhelming majority
summary
03 introduction
04 a profile of
anticipated hiring more than 100 devoting no more than 25% of HR will use them for sourcing, screening respondents
permanent employees in 2007, while staff to recruitment. and testing of candidates. Large 05 The
outsourcing
one third said they would hire more organisations are more than twice phenomenon
than 100 temporary employees. As HR departments come under as likely to use a recruitment firm as 06 The recruiting
increased scrutiny to meet their challenge
Some 18% will hire more than 100 smaller organisations.
organisational goals and metrics, the 07 The vanishing
➔ The Global RPO Report university graduates. global
2007 was conducted by Kelly HRfirst efficacy of the recruitment process Slightly more than half of workforce
The competition for talent itself has become a key determinant respondents were familiar or very 08 global hiring
and HROA Europe in June 2007 intentions
to explore attitudes and practices means that employers need to of success. The survey found a familiar with RPO. Approximately one
09 internal
fundamentally reassess how they median cost-per-hire of 3,000 Euros third were somewhat familiar and just recruitment
relating to Recruitment Process functions
Outsourcing (RPO). Respondents attract and retain those people who with some HR managers reporting an under 10% had not heard of RPO.
10 The decision
were mainly senior HR managers in are vital to their business. The sharp average cost-per hire of more than to outsource
tightening in labour markets has 10,000 Euros. More than half of the respondents 11 estimating
a range of small, medium and large the real cost
placed recruitment at the forefront in currently outsource some or all of of recruitment
national or multinational companies
determining business strategy and Many businesses have avoided local the HR function. The vast majority 12 appendix 1
located in 25 countries with
success. HR managers cite growing skills shortages through off-shoring of respondents said that they would 13 about
responsibilities covering 89 countries. sponsors
difficulties in a number of key areas, work to lower cost countries such definitely consider outsourcing their
The impact of a buoyant world notably the quality of candidates, the as China and India. Even these recruitment in the future. The three
economy, slowing population time-to-hire, and a less than countries are now experiencing priorities for an outsourced provider
growth and retiring baby-boomers efficient process. increased cost pressures and would be to reduce the time-to-
is contributing to a chronic and shortages of trained people. hire, lower the cost of recruitment,
widespread skills shortage with Many HR units face their own Organisations seeking the best and rationalise multiple sources of
almost 70% of respondents skills challenge with a shortage of people will need to broaden their recruitment.
experiencing difficulties professionals and pressure to meet hiring efforts to an international pool
■ ■ ■
recruiting staff. demanding recruitment benchmarks. of talent.


as hR dePaRTmenTs
Come undeR inCReased
sCRuTiny To meeT TheiR
oRganisaTional goals and
meTRiCs, The effiCaCy of
The ReCRuiTmenT PRoCess
iTself has beCome a key
deTeRminanT of suCCess.


global RPo RePoRT 2008 | 6
03 introduction ➔ Recruitment Process
Outsourcing (RPO) is one of the
current recruitment practices and
engineer a solution that will manage
01 Preface
02 executive
summary
fastest growing areas of business the entire process including sourcing,
03 introduction
outsourcing in which an employer screening, interview coordination,
04 a profile of
transfers all or part of the recruitment/ offer management, and on-boarding. respondents
hiring process to an external service 05 The
There are many considerations that outsourcing
provider. phenomenon
come to play when an organisation is
06 The recruiting
There are many forms of outsourcing making a decision about outsourcing. challenge
ranging from the simple use of Is recruitment its core business? Does 07 The vanishing
global
contracted labour, right through it have the necessary expertise? workforce
to a complete outsourcing alliance Are there third parties that can do 08 global hiring
intentions
that can encompass most of an it better? If it’s outsourced, what
09 internal
organisation’s Human Resource will be the cost? Is there a risk of recruitment
functions
functions, commonly known as HR losing control over a key part of the
10 The decision
Outsourcing (HRO). business? to outsource
11 estimating
the real cost
The emerging model of RPO is one Changes in the external environment of recruitment
that typically involves the outsourcing can also have an impact on the 12 appendix 1
of the entire recruiting function, decision to outsource what was 13 about
sponsors
whereby the service provider previously handled within the
will serve as the client’s seamless organisation. In regard to labour
recruitment/hiring department. markets, the global skills shortage has
had a powerful impact on the way
This end-to-end approach to RPO that recruitment is executed as part
has the advantage of allowing both of a broader business strategy.
parties to develop a model that fits
the client organisation’s strategic
direction. At its best, it can assess


global RPo RePoRT 2008 | 7
03 When skilled labour was more
abundant, the recruiting function was
development was supposed to
provide an abundant new source
Because recruitment is largely a
process-driven function, it is often
least a part of their HR function. The
Yankee Group has estimated that the
01 Preface
02 executive
summary
generally less complex, more routine of labour that would ease some of well suited to being outsourced from global market for HRO will reach $80
03 introduction
and posed less of a risk in terms of the pressure for skilled workers day-to-day operational management. billion by 2008, recording average
04 a profile of
poor hiring decisions. It’s a different across the globe. Non-core, transaction duties such as annual growth of 12%. respondents
story when skilled labour is in short payroll and benefits administration 05 The
But that has not materialised. This report examines the global outsourcing
supply. Furthermore, the major are most frequently outsourced but phenomenon
Multinational firms operating in increasingly, the entire recruiting uptake of RPO across major markets.
structural changes afoot in the 06 The recruiting
China and India are facing a shortage It looks at the factors that influence challenge
global workplace suggest that function is handed to outside
of highly skilled technicians and the decision to outsource and the 07 The vanishing
these skills shortages will remain professionals. This allows the internal global
professionals. Wages are recording types of industries and sectors that workforce
for the longer term. HR team to focus on core business
double digit growth. Meanwhile in are most active. It examines the 08 global hiring
and organisational strategy, while intentions
The impact of an aging workforce, Europe, the US and Asian economies, realising measurable and desirable recruitment environment to gauge
09 internal
buoyant economic conditions, and skills shortages are chronic. hiring intentions, as well as the recruitment
hiring results. functions
the emergence of new industrial challenges in attracting candidates.
10 The decision
powers such as China and India have The challenge of dealing with this RPO can provide companies with It also looks at efforts to calculate the to outsource
fuelled global demand for skilled candidate shortage is one of the cost savings, increased candidate actual cost of recruitment. 11 estimating
the real cost
technicians and professionals across a foremost issues facing organisations quality, effective screening processes of recruitment
across all industry sectors, both large The Global RPO Report 2007
wide range of industries. and tools, metrics and new 12 appendix 1
and small. It raises the question of provides a rare glimpse into the 13 about
technology without major capital
thinking of some of the most senior sponsors
The emergence of these new how the recruitment process can be investments.
industrial blocs has seen a substantial best adapted to cope with this major HR executives in national and
volume of manufacturing shift away structural phenomenon. Research by Gartner Dataquest multinational firms as they grapple
from the higher-cost developed shows that in the US, approximately with the task of sourcing talent in a
economies of the West. This 85% of all businesses outsource at tight world labour market
■ ■ ■


Pie 1
global RPo RePoRT 2008 | 8
04 a profile of ➔ The survey was carried out
by Kelly HRfirst and HROA Europe
respondents were operating in more
than one country. As a result, the
with less than 100 employees. 01 Preface
02 executive
respondents in June 2007 to explore attitudes
and practices relating to RPO. The
responses reflect the circumstances
in a total of 89 countries. A full
The results represent the views
of senior HR managers in sectors
summary
03 introduction
covering IT&T, Manufacturing, 04 a profile of
respondents were mainly senior HR list of countries represented by respondents
managers in small, medium and large respondents is at Appendix 1. Transport, Travel, Banking and 05 The
Finance, Professional Services, outsourcing
national or multinational companies. phenomenon
Responses were gained from a total The majority of respondents (53.2%) Health, Hospitality, Media &
06 The recruiting
were from larger companies, Entertainment, Professional Services, challenge
of 94 organisations located in 25
comprising more than 1,000 Retail/Wholesale and Utilities. 07 The vanishing
countries. global
employees. Almost one quarter of workforce
Slightly more than half of the respondents were from organisations ■ ■ ■ 08 global hiring
intentions
09 internal
recruitment
functions
1 size of organisations that took part in the survey 10 The decision
to outsource
Pie 1
11 estimating
the real cost
of recruitment
24.5%
12 appendix 1
Less than 100 employees 13 about
100 to 500 employees sponsors
501 to 1000 employees
53.2%
More than 1000 employees
14.9%
7.4%
Less than 100 employees
100 to 500 employees
501 to 1000 employees
More than 1000 employees


global RPo RePoRT 2008 | 9
05 the outsourcing ➔ The outsourcing of a range
of functional areas is a modern
since the move to widespread HRO is
still quite recent.
faster than supply as a consequence
of the masses of retiring baby
01 Preface
02 executive
phenomenon phenomenon of the business
environment and HR has increasingly Slightly more than half of
boomers and low population
growth rates.
summary
03 introduction
respondents (56.4%) were familiar 04 a profile of
become one area that many respondents
organisations are choosing to transfer or very familiar with RPO while a Many HR departments face their 05 The
little more than a third (34%) were own skills challenge. There is a outsourcing
to a third party provider. phenomenon
somewhat familiar. Just under 10% shortage of professionals with
06 The recruiting
The level of awareness about had not heard of RPO at all. the expertise to attract and retain challenge
the concept of outsourcing is talented candidates. 07 The vanishing
global
still somewhat mixed across the It is clear that recognition of RPO is workforce
organisations that took part in the increasing as companies deal with The traditional HR department 08 global hiring
intentions
survey. This is perhaps not surprising a challenging labour market. The is caught in a no-win position. It
09 internal
talent needs of industry are growing faces a depleted candidate market, recruitment
functions
rising wage pressures, demanding
10 The decision
managers who want candidates to outsource
2 level of familiarity with RPo (%) quickly and within budget, pressure 11 estimating
the real cost
to meet HR benchmarks, and an of recruitment
in-house recruiting team that is 12 appendix 1
Very familiar
probably lean and overworked. 13 about
Familiar / knowledgeable sponsors
Somewhat familiar Simply, for many organisations,
Not at all recruitment is no longer core business.
0% 7% 14% 21% 28% 35% It’s these circumstances that have
fuelled the emergence of the fully
managed RP.
■ ■ ■


global RPo RePoRT 2008 | 10
06 the recruiting ➔ Recruitment has become the
battleground of modern business.
attract and retain those people who
are vital to their future prosperity.
either train those people internally to
take on new tasks or go to the market
01 Preface
02 executive
challenge Whereas once organisational strategy For the majority of organisations,
to attract them from elsewhere.
Executing on this decision is not as
summary
03 introduction
was the key differentiator of the high this adds a considerable degree 04 a profile of
straightforward as it once was. respondents
performing business and a constant of complexity to the imperative
05 The
supply of labour was largely taken of staying one step ahead of The option of training staff in outsourcing
for granted, now recruitment is the the competition: not only does phenomenon
new skills can be costly and time
06 The recruiting
defining factor for many businesses. the modern firm need to have a consuming and with high turnover, challenge
competitive strategic advantage,
possibly a wasted expense. Turning 07 The vanishing
The sharp tightening in labour but it needs to ensure that the global
to the marketplace to find the workforce
markets across the globe means available labour force is capable of
that recruitment is at the forefront in best people can simply result in a 08 global hiring
implementing the strategy. This can intentions
determining business success and bidding war, if desired candidates are
no longer be treated as a given. 09 internal
even survival. available where needed. recruitment
functions
For many organisations grappling
Either way, it means higher input 10 The decision
The intense competition for talent with the problem of attracting the to outsource
means that employers need to right skilled talent, the choices come costs, slimmer profit margins and
11 estimating
fundamentally reassess how they less certainty about the long-term the real cost
down to a ‘build it or buy it’ decision; of recruitment
future of staffing. In the worst
12 appendix 1
case, if the right people cannot be 13 about
attracted, it may mean that certain sponsors
3 main factors causing difficulties in recruiting staff (%)
critical capabilities simply cannot
Chart 4 be delivered.
Shortage of skilled staff
Salary uncompetitive
Location
Current recruitment processes
Other
0% 20% 40% 60% 80%


global RPo RePoRT 2008 | 11
06 What’s more, all the evidence points
to the skills shortage remaining as
Organisational size does have a
bearing on the difficulty in recruiting
Another perspective can be gained
from looking at those factors that
Broadly, HR managers cite difficulties
in a number of key areas, notably
01 Preface
02 executive
summary
a permanent feature of the global employees. The worst affected have impeded the hiring process. the candidate, the timing and
03 introduction
recruitment market for years to come. were smaller organisations with less Again, the impact of the skills the process.
04 a profile of
than 100 employees as well as the shortage is evident with respondents respondents
The scale of the problem is evident Candidate quality is the key issue
larger firms with more than 1,000 citing ‘time to hire’, ‘quality of hires’ 05 The
in the responses from employers. and it has multiple impacts on the outsourcing
employees. In each case, more and ‘cost to hire’. phenomenon
More than two-thirds of respondents recruitment process. In isolation,
than 70% reported difficulties in 06 The recruiting
a shortage of candidates simply challenge
(69.1%) said they were experiencing recruiting staff. There is a common theme to the
makes it difficult to attract a spread 07 The vanishing
difficulties recruiting staff. nature of the issues that are plaguing
of suitable people from which to global
By contrast, for those firms the recruitment process across workforce
The major reason for the difficulties generate a shortlist.
employing between 100 and 1,000 many countries. These fall into a 08 global hiring
intentions
were “shortage of skilled staff”, cited employees, just 57% reported number of categories judging by
09 internal
by almost 80% of respondents. difficulties in recruiting staff. the most frequent complaints from recruitment
functions
hiring managers.
10 The decision
to outsource
11 estimating
the real cost
of recruitment
4 Conditions that have slowed or stalled the hiring process (%)
12 appendix 1
Chart 5
13 about
Time to hire sponsors
Quality of hires
Cost to hire
Quality of recruiters
Poor processes
Technology effectiveness
Performance monitoring
Hiring manager satisfaction
Other
0% 15% 30% 45% 60%


global RPo RePoRT 2008 | 12
06 Tied to the candidate shortage, but
not solely its cause, is the problem
It’s difficult to avoid the conclusion
that, in many instances, the lack of
01 Preface
02 executive
with the length of time it takes to suitable talent and a lack of adequate summary
conduct recruitment. In addition to a recruitment staff impose such strains 03 introduction
shortage of talent, HR managers cite on the entire recruitment process as 04 a profile of
respondents
to render it unworkable.
factors such as being overworked or 05 The
lacking the necessary resources to outsourcing
Finally, the hiring process itself phenomenon
fulfill the task in a reasonable time. attracts criticism over such factors 06 The recruiting
as a lack of consistency, inefficiency challenge
One of the key issues for recruiters 07 The vanishing
and insufficient support to manage
in this environment is the extent to global
the task. workforce
which they engage non-standard
08 global hiring
recruitment strategies to uncover Recruitment companies themselves intentions
talent. The skills shortage has also have their critics. The most 09 internal
recruitment
highlighted the need for active common complaints relate to the functions
recruitment strategies including long- number of vendors, quality of the 10 The decision
term relationship management and to outsource
process, and costs.
methods of searching for candidates 11 estimating
the real cost
not currently on the market. Passive ■ ■ ■ of recruitment
job search techniques such as job 12 appendix 1
boards, advertising and career 13 about
websites are likely to struggle in sponsors
the current market environment.


global RPo RePoRT 2008 | 13
07 the vanishing ➔ One of the real quandaries
amongst those who examine the
economy in a move that would
theoretically double the global labour
to take advantage of lower cost
labour. The scale of this
01 Preface
02 executive
global state of the international labour
market is how we arrived at a position
pool from 1.46 billion workers to 2.93 transfer is most pronounced in the
markets for services such as IT and
summary
03 introduction
billion workers. 1
workforce of such a skills crisis, and whether it
This profound series of events would
science and engineering, where
04 a profile of
respondents
is reversible. skills are universal. 05 The
outsourcing
be the start of a move toward a vast phenomenon
It was always accepted that a skills single global labour market and, As the less developed countries have
06 The recruiting
crisis would emerge in the developed for some, would provide the invested in higher education, the challenge
supply of engineering, science and IT 07 The vanishing
OECD economies as population solution to the looming shortage global
growth slowed and the spike of of skilled workers. university graduates means that there workforce
is an increasing supply of talented 08 global hiring
baby boomers started to depart intentions
There have been other factors that technical and professionals who can
the workforce. 09 internal
have accelerated this globalisation of perform many of the roles previously recruitment
functions
But in the 1990s a fortuitous series of labour markets. Among them include undertaken in higher cost economies.
10 The decision
events occurred as China, India and the moves to international trade The wage differential between these to outsource
the ex-Soviet bloc joined the global liberalisation, the rapid advancement newly trained specialists and their 11 estimating
the real cost
of telecommunications and IT Western counterparts is narrowing of recruitment
platforms which have standardised and is expected to be on par with the 12 appendix 1
many business processes, and a developed nations in the near future. 13 about
sponsors
significant fall in transport costs. Yet despite this vast injection of talent
from developing economies into the
Certainly the impact of China and
global labour pool, skills shortages
India, in particular, has given rise to
persist. Why?
the enormous growth of business off-
shoring as firms have moved abroad
1 Freeman, Richard 2006 “The Great Doubling:
The Challenge of the New Global Labor
Market”


global RPo RePoRT 2008 | 14
07 International investment expert
and author, Nicholas Vardy thinks
candidates for high value-added
jobs like finance, accounting and
countries like Vietnam and Indonesia. The problem is that most
organisations don’t possess skills
01 Preface
02 executive
he knows the reason – “Precious engineering are qualified to work for It’s all part of what has been dubbed or the technology to undertake
summary
the era of homo sapiens globalus – 03 introduction
few Chinese and Indian university a foreign company. recruitment on such a scale. This is
the universally skilled employee in a 04 a profile of
graduates can play ball on the one area where an RPO provider, with respondents
multinational playing field”. Despite As a consequence, the easing of the borderless global market.3 With the access to international databases, 05 The
skills crisis that some experts believed advancement of communications and outsourcing
the 2.5 million university graduates search and screening functionality phenomenon
turned out by India each year, only a would flow from this mass transfer of the Internet, there are numerous jobs and local knowledge can add value 06 The recruiting
production to low cost centres has that can be undertaken anywhere in challenge
fraction meet the standards needed to a firm.
the world. Unless there is a need for 07 The vanishing
by Indian companies let alone foreign not materialised. Extraordinarily, it global
appears to have widened. direct contact with a customer, most Presently, there are a very limited workforce
based firms. He says that by 2010
jobs can be outsourced to achieve number of firms that actively fill their 08 global hiring
India will have its own shortfall of intentions
The anecdotal evidence of the optimum price and quality. current vacancies through cross-
some 150,000 IT engineers and 09 internal
skills crisis noted above is not at border recruitment. Candidates have recruitment
350,000 business process staff.2 functions
all inconsistent with the findings of The advent of the borderless shown themselves willing to move
10 The decision
Labor shortages in China have seen the Global RPO Report 2007. In labour market and improvements in internationally but firms continue to outsource
salaries increase by more than 8% India, the proportion of respondents education and training in developing to concentrate their recruitment 11 estimating
the real cost
with some factory salaries increasing experiencing difficulties recruiting countries means that there is the activities in local markets. of recruitment
by 40%. Turnover in some low-tech staff was 72.7% – higher than in the potential for recruits to be sourced 12 appendix 1
manufacturing plants is reported United States, the United Kingdom from a far larger pool of candidates. It seems certain that many more 13 about
sponsors
as approaching 50% as the supply and even above the global average organisations will need to broaden
For those organisations seeking to their recruitment horizons to
of suitable cheap labour from the of 69.1%.
attract skilled people, there is good international markets, and take a
countryside is exhausted.
It’s not surprising that the next wave reason to tap into this international more strategic approach if they are to
McKinsey & Company estimates of low cost off-shoring has already pool of talent, particularly when faced compete successfully for talent.
that only about 10% of Chinese commenced as firms expand to with a localised candidate shortage.
■ ■ ■
2 Vardy, Nicholas 2007 “The Surprising Shortage of Quality Global Labor”.
3 Rybinski, Krzysztof 2006 “Global Labour Market and its Limitations”.


global RPo RePoRT 2008 | 15
08 global hiring ➔ In order to evaluate the state
of the recruitment market over the
trend of strong underlying demand
for skilled workers in a majority of
while one third said they would
hire more than 100 temporary
01 Preface
02 executive
intentions coming year, the survey sought views
on anticipated hiring levels for 2007.
countries surveyed. employees. Some 18% will hire more
than 100 university graduates.
summary
03 introduction
Almost half of respondents (42.6%) 04 a profile of
respondents
Buoyant growth in the leading global anticipated hiring more than When looking at the make up of the
05 The
economies means that there is a 100 permanent employees in 2007, planned hirings for 2007, the impact outsourcing
phenomenon
of the candidate shortage and the
06 The recruiting
strong labour market emerges again, challenge
evidenced by the fact that the need 07 The vanishing
5 anticipated permanent, temporary and university graduate hires in 2007 global
to fill existing jobs is swamped by the workforce
Chart 1
need to fill new vacancies. 08 global hiring
Planning to hire 100 or more permanent staff intentions
Planning to hire 100 or more temporary staff The need to fill new positions is 09 internal
recruitment
Planning to hire 100 or more university graduate staff the predominant concern of most functions
0% 10% 20% 30% 40% 50% organisations. More than half of 10 The decision
to outsource
respondents were recruiting for five
11 estimating
or more locations. the real cost
of recruitment
6 main job categories to be filled in 2007 (%)
12 appendix 1
Chart 7
13 about
sponsors
Senior executive or professional
Mid-level executive or professional
Business operations support
Administrative
Contact Centre
Trades
Other
0% 20% 40% 60% 80%


global RPo RePoRT 2008 | 16
08 The survey asked respondents
to specify which job categories
success for an organisation is whether
their recruitment strategy can bring
Of those who will use a recruitment
firm, the overwhelming majority
need to go offshore to attract the
right talent. This cross border activity
01 Preface
02 executive
summary
they would be seeking to fill. on new, qualified employees in (93%) said they would use them for has become entrenched in some
03 introduction
The highest numbers were for the timeframe that meets the sourcing, screening and testing. quarters as a key element of the
04 a profile of
“Business operations support” organisations objectives. wider recruitment picture. But overall, respondents
Large organisations (more than
(76.6%) and “Mid-level executive the percentage of hires filled from 05 The
It seems that the vast majority of 1,000 employees) are more than outsourcing
or professional” (75.5%). cross border recruitment remains low. phenomenon
organisations seeking to fill the twice as likely to use a recruitment
06 The recruiting
And yet almost 80% of respondents required positions will turn to firm than smaller firms with less than Some 88% of organisations will use challenge
100 employees. 07 The vanishing
are experiencing difficulties – it recruitment companies. A total cross border recruitment to fill up to
global
is no longer a matter of securing of 71.3% say they would use 25% of their recruitment needs. But workforce
Faced with the battle to attract skilled
headcount approval to recruit and recruitment firms to fulfill their just 5.3% will use this method to fill 08 global hiring
workers, much has been made of the intentions
fill vacancies – the key measure of staffing needs. more than 50% of their vacancies.
09 internal
recruitment
functions
■ ■ ■
10 The decision
to outsource
7 how organisations plan to use recruitment firms (%)
11 estimating
Chart 8 the real cost
of recruitment
Sourcing, screening, testing
12 appendix 1
Reference checking 13 about
sponsors
Applicant/recruitment performance tracking
Vendor management
On-boarding
0% 25% 50% 75% 100%


global RPo RePoRT 2008 | 17
09 internal ➔ With the global skills
shortage now the dominant
If a recruitment division can’t attract
a critical mass of employees with the
delivering organisational goals and
performance.
01 Preface
02 executive
recruitment workforce issue faced by business,
the performance of the recruitment
minimum basic qualifications, what
chance is there of meeting more
This raises the question as to what is
summary
03 introduction
functions function in many organisations is abstract goals such as aligning with
the template for a high performing
recruitment division within major
04 a profile of
respondents
coming under renewed scrutiny. strategic objectives, formulating 05 The
national and multinational firms. outsourcing
a workplace culture, or managing phenomenon
While the typical recruitment unit How decentralised are their
succession? 06 The recruiting
may have managed adequately activities? What is outsourced? challenge
during an era of abundant labour, Arguably, there has never been What technology and processes are 07 The vanishing
global
it’s a different picture when multiple a time when the recruitment in place? What resources are devoted workforce
firms are battling for the same scarce function has been required to recruitment? 08 global hiring
intentions
pool of candidates. to carry such a heavy load in
09 internal
recruitment
functions
8 number of internal staff that form the hR recruitment team 10 The decision
to outsource
Chart 9 11 estimating
the real cost
1 to 2 of recruitment
12 appendix 1
3 to 5
13 about
6 to 10 sponsors
More than 10
No response
0% 10% 20% 30% 40% 50%


global RPo RePoRT 2008 | 18
09 The survey found that slightly less
than half of respondents (48.9%) had
two or less internal HR recruitment
staff and almost 62% having five
survey, the recruitment team was
spending no more than 25% of their
The relatively small number of people
engaged fully on the recruitment
01 Preface
02 executive
summary
centralised recruitment processes. A or less. time on recruitment. function raises an interesting question
03 introduction
further 40.4% were decentralised and about the level of resources that
Not only are the staff numbers There were only 15% of organisations 04 a profile of
5.3% were outsourced. some firms are allocating to this respondents
attached to recruitment departments where the recruitment team spent at important operational area when it is 05 The
In regard to internal staffing, most fairly modest, but many of those staff least 75% of its time on recruitment. outsourcing
retained in-house. phenomenon
recruitment departments appear to are performing a range of functions
06 The recruiting
be relatively lean operations with other than recruitment. In the vast challenge
some 40% of organisations having majority of cases examined in the 07 The vanishing
global
workforce
08 global hiring
intentions
9 % of internal hR/recruitment team on recruitment duties only
09 internal
Chart 10 recruitment
functions
Less than 10% 10 The decision
to outsource
10% to 25%
Recruitment only
11 estimating
the real cost
26% to 50%
of recruitment
51% to 75% 12 appendix 1
13 about
76% to 100%
sponsors
No response
0% 10% 20% 30% 40%


global RPo RePoRT 2008 | 19
09 Given the pivotal role of recruitment
in setting organisational culture,
negotiation, and a range of legislative
issues surrounding recruitment,
their internal HR team to recruitment
duties, and with a tight labour
01 Preface
02 executive
summary
performance and strategic direction, induction, and evaluation. market, firms are experiencing stalled
03 introduction
it is worth considering whether or delayed hiring processes.
04 a profile of
some firms are giving it the priority When the recruitment process works respondents
it requires. well, it can cut costs, reduce cycle Respondents reported a wide range 05 The
of technologies to source and track outsourcing
times, leverage best practice and phenomenon
Best practice in recruitment attract and retain the best people. applicants, the most popular being
06 The recruiting
now follows a rigorous path that online applications/assessment challenge
encapsulates job analysis and Perhaps it is not surprising that with (61.7%) and applicant tracking 07 The vanishing
global
scoping, sourcing employees, almost half of the HR departments (60.6%). workforce
assessment and testing, selection, surveyed dedicated less than 10% of 08 global hiring
intentions
■ ■ ■
09 internal
recruitment
functions
10 The decision
10 Technology used to source or track candidates (%) to outsource
Chart 11
11 estimating
the real cost
Online applications/assessment of recruitment
12 appendix 1
Applicant tracking
13 about
CV management sponsors
CV search capability
Job order tracking
Electronic scheduling
Automated reporting
Other
0% 10% 20% 30% 40% 50% 60% 70%


Pie 12
global RPo RePoRT 2008 | 20
10 the decision ➔ One of the threshold issues
for any organisation deciding on
Benefits can include faster time to
hire, access to technology, improved
According to responses received
from the 94 organisations responding
01 Preface
02 executive
to outsource the optimum structure for its
approach to HR is whether key tasks
quality of recruits and limiting the
number of third-party providers
globally, less than one third (31.9%)
currently outsource their recruiting
summary
03 introduction
04 a profile of
and functions should be retained in- through good vendor management. or hiring processes. The scale of respondents
house, or outsourced to a specialist On the other hand, there may be outsourcing is fairly consistent across 05 The
outsourcing
service provider. fears about a perceived loss of both medium and large firms. phenomenon
control over a key element of 06 The recruiting
There are a range of factors to The job category most frequently challenge
the business.
be weighed up in deciding such outsourced was for ‘Professionals’, 07 The vanishing
global
an issue. perhaps reflecting the relative value workforce
derived from optimum high-level 08 global hiring
intentions
executive appointments.
09 internal
recruitment
functions
11 organisations currently outsourcing recruitment (%) 10 The decision
to outsource
Pie 12
11 estimating
the real cost
of recruitment
12 appendix 1
31.9%
13 about
sponsors
Yes
No
68.1%
Yes
No


global RPo RePoRT 2008 | 21
10 Approximately one third of
organisations outsource for all
were using a separate provider
to undertake their outsourced
Asked whether they would consider
outsourcing in the future, 75.5% of
Of those organisations that were
willing to consider outsourcing,
01 Preface
02 executive
summary
positions across the organisation. recruitment. organisations responded positively, the most favored areas were for
03 introduction
with 24.5% saying they would not. Administrative, and Contingent/
One of the issues confronting 04 a profile of
As awareness of RPO gathers pace, Temporary (both 23%). respondents
organisations that outsource their HR there is an increasing willingness on Prospective RPO customers have 05 The
function is whether their recruitment the part of organisations to embrace some clear ideas about the areas It is worth noting the difference outsourcing
phenomenon
services should be bundled under the idea of outsourcing, provided it that they would outsource, and in priorities between those
06 The recruiting
the HR umbrella or outsourced to a meets certain criteria. expectations as to what a vendor organisations that have already challenge
should provide. engaged an RPO partner and those 07 The vanishing
separate provider. A clear majority
global
of respondents in the survey (70%) still considering such an arrangement. workforce
08 global hiring
intentions
09 internal
12 areas most frequently outsourced (%) 13 Job types most likely to be outsourced (%) recruitment
Chart 14 functions
Chart 13
10 The decision
Company wide 7% 18% to outsource
11 estimating
Organizational area
Contingent/Temporary Company wide
the real cost
17% Contingent/Temporary of recruitment
Administrative
Administrative 12 appendix 1
Professional Professional
11% 23%
13 about
Business unit Business Unit sponsors
University graduates
University graduates Other
15%
0% 10% 20% 30% 40% 50%
Company wide
23%
Contingent/Temporary
Administrative
Professional
Business Unit
University graduates
Other


global RPo RePoRT 2008 | 22
10 The organisations with an
established outsource arrangement
firms that are still considering an
outsource arrangement may be yet
Given the labour shortages that have
contributed to delay or collapse of
Aside from the broad objectives
outlined above, it is instructive to
01 Preface
02 executive
summary
predominantly use it to recruit to appreciate its potential to enhance hiring activity for many companies, it’s note the comments from some
03 introduction
professionals whereas those still a firm’s competitive advantage. no surprise that the most important of the organisations considering
04 a profile of
considering a partnership say requirement of a recruitment partner outsourcing. Typically, they respondents
their priority is Administrative and If an organisation is going to
is to help achieve a speedier are seeking a ‘better quality of 05 The
Contingent/Temporary. outsource an activity that it previously outsourcing
recruitment process. recruitment’ and a ‘better selection phenomenon
conducted in-house, there has to be
that helps reduce turnover’. It 06 The recruiting
It’s possible that the more a compelling value proposition to As well as increasing the pace challenge
becomes clear that quality in hiring is
experienced ‘outsourcers’ have justify what, to many, represents a of hiring, the other two standout 07 The vanishing
a key attribute that is frequently not global
realised the leverage that that can significant change in approach and, requirements of an RPO partner workforce
being fulfilled by existing practices.
be extracted from these relatively for some, an element of risk. are to lower the cost of recruitment, 08 global hiring
higher value recruits in the current intentions
and to integrate multiple sourcing
09 internal
labour market. Some of those channels. recruitment
functions
10 The decision
to outsource
14 main expectations of an outsourcing partner (%) 11 estimating
Chart 15 the real cost
of recruitment
Faster time to hire 12 appendix 1
Lower cost of recruitment 13 about
sponsors
Integrate multiple sourcing channels
Priority
Gain access to technology
Manage/limit number of third party providers
Other
0% 10% 20% 30% 40% 50% 60% 70%


global RPo RePoRT 2008 | 23
10 It also follows that once quality is
addressed, some of the main hurdles
The overwhelming concern with
recruiter quality should be seen in
that many organisations outsource
recruitment because their in-house
and ‘years of experience’ were not
as important to potential clients
01 Preface
02 executive
summary
of the recruitment process such as light of the findings about the lack resource does not have the range as ‘recruiter quality’ and ‘industry
03 introduction
‘time to hire’ and cost of recruitment of resources devoted to recruitment. and depth of experience, or the knowledge’. Cost was the third most
04 a profile of
are also improved. When firms are cutting back their market knowledge to develop and important factor for firms considering respondents
recruitment staff and finding it execute recruitment strategies. the RPO option. 05 The
When asked about the criteria for outsourcing
difficult to attract appropriately phenomenon
engaging an RPO partner, ‘recruiter skilled HR staff, it is not surprising Significantly, factors such as ‘breadth ■ ■ ■
06 The recruiting
quality’ was the single most frequent of RPO services’, ‘technology’, challenge
that recruitment suffers. It seems
factor cited. 07 The vanishing
global
workforce
08 global hiring
intentions
15 main criteria for selecting an RPo partner (%)
09 internal
Chart 16 recruitment
functions
Recruiter quality
10 The decision
Industry knowledge to outsource
11 estimating
Cost the real cost
Criteria
of recruitment
Technology
12 appendix 1
Years of RPO experience
13 about
Breadth of RPO services sponsors
Other
0% 20% 40% 60% 80%


global RPo RePoRT 2008 | 24
11 estimating the ➔ Human Resource
departments are increasingly the
is one of the common measures
applied as part of this assessment
calculate cost-per-hire, no standard
formula was in place.
01 Preface
02 executive
real cost of focus of benchmarking studies that
aim to determine their performance
process. But what exactly is cost-per-
hire and how is it being measured? Many institutions and consultants
summary
03 introduction
recruitment and effectiveness. As the HR
Cost-per-hire was first routinely
have put forth various methods
for determining cost-per-hire. It is
04 a profile of
respondents
function comes under increased 05 The
calculated in the late 1960’s. It generally accepted that a good cost- outsourcing
scrutiny to meet organisational phenomenon
goals and metrics, the efficacy of the proved to be a relatively effective for-hire assessment should include,
06 The recruiting
tool for forecasting recruiting costs. internal, external and direct costs as challenge
recruitment process itself has become
By the early 1980s, although many well as other relevant charges: 07 The vanishing
one key determinant of success. The global
organisations were beginning to workforce
concept, known as ‘cost-per-hire’
08 global hiring
intentions
09 internal
recruitment
functions
10 The decision
to outsource
11 estimating
the real cost
of recruitment
12 appendix 1
13 about
sponsors


global RPo RePoRT 2008 | 25
11 internal costs: employment/
recruiting office salaries and
number of interviews versus number
of hires; acceptance rate, time-to-fill;
hires, with a median of 3,000 Euros. It
is interesting to note that almost 12%
possible. For some businesses, hiring
via the Internet, for instance, may go
01 Preface
02 executive
some way in cutting cycle times and summary
benefits; staff travel, lodging and time-to-start, turnover, relocation of HR managers reported average
03 introduction
entertainment; and administration. costs and average sign-on bonus. cost per hire of more than 10,000 lowering cost-per-hire.
04 a profile of
external costs: travel, lodging and experts in cost-per-hire calculations Euros. respondents
Whether an organisation uses
entertainment, and salaries for other agree on one thing: calculating 05 The
It is always prudent to ask the traditional or new methods, having outsourcing
recruiters. cost-per-hire can be complex phenomenon
question: what does it cost to bring an effective way to calculate cost-
Company visit expenses: candidate because there is no consistent and 06 The recruiting
in key talent? For any organisation, per-hire is essential to both proving challenge
travel, lodging and meals; interview accepted standard of measurement. it is vital to monitor costs and have a the value of HR and making HR 07 The vanishing
workday expenses, and others. The biggest variable centres on the program of continuous improvement, global
operations as efficient as possible. workforce
direct fees: advertising, job fairs, treatment of management time and ensuring that money is being
08 global hiring
agency and executive search fees, overhead costs. devoted to the right areas and that A good RPO provider will help an intentions
cash awards for employee referrals, there is an appropriate pay off. organisation to first understand the 09 internal
recruitment
and college recruiting. Among respondents who replied to complexity of calculating cost-per- functions
other data: average annual salary the latest survey, there was a wide It is important to measure what works hire, and then control costs. Some 10 The decision
to outsource
of new hires, recruit workload, and range of estimated average cost per and what doesn’t as rigorously as studies have cited cost savings of
11 estimating
between 8% and 35%. It’s worth the real cost
remembering that cost-per-hire is of recruitment
not the only measure of recruitment 12 appendix 1
16 average cost-per-hire
13 about
effectiveness. Reducing hiring costs sponsors
Chart 17
needs to be correlated against
500 to 1,000 measured improvements in hiring
1,001 to 1,800 quality. Good metrics will help
Cost-per-hire (!)
1,801 to 2,500 reduce costs and improve quality
2,501 to 3,500 of hire, and will result in recruitment
3,501 to 5,000 process efficiencies.
5,001 to 10,000
■ ■ ■
More than 10,000
0% 5% 10% 15% 20%


good meTRiCs will
helP ReduCe CosTs
and imPRoVe qualiTy
of hiRe, and will
ResulT in ReCRuiTmenT
PRoCess effiCienCies.


global RPo RePoRT 2008 | 27
12 appendix UK Brazil South Africa Jordan Cuba
01 Preface
02 executive
USA China Israel Kazakhstan