Ebook by Sally Hunter on how to build a business case for in-house vs outsource recruitment.

1. Talent
Acquisition:
In-house or
outsource?
6 steps to a meaningful business case
sally hunter

2. Rethinking the case for change
Whether it’s managed in-house or outsourced, the Talent Acquisition function
and its costs are continually scrutinized and assessed for potential efficiencies.
While it can be frustrating for HR to linked to Talent and that talented employees Go further than simply accepting and
be routinely challenged on cost and simply don’t stay as long and attracting absorbing change, and instead start to
value brought, the creation of a robust them in the first place takes tenacity and take control and lead the change for the
business case can be a powerful lever in consistent focus. commercial good of the organization.
demonstrating value shoulder to shoulder That means demonstrating the true value
with the cost/efficiency benefits. People are one of the greatest costs any of recruitment across the organization,
organization carries, not the cost of recruiting as well as how much it really costs. And
In the current economic climate, the pressure those people, so Talent Acquisition leaders here, we offer ways to do just that.
to reduce cost and improve efficiency remain need to lead the strategy and debate about
a key priority, however there is increasing their organizations greatest assets and
evidence that Shareholders recognize demonstrate their value within the broader
competitive advantage is intrinsically plan and people agenda.
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3. 1 / Don’t let the document drive your process
Every organization has its own unique way of building out a business case. There will be
documents and forums that differ from business to business, but it must ask and answer the
right questions if the right case is to be made. No matter what form the business case takes,
the process and the documentation must:
1. Capture what it really costs, not 4. Establish the benchmark by measuring
just the obvious costs such as that key indicators of just how successful
of the talent team’s wages and the the recruitment process currently is.
advertising costs of each role.
5. Demonstrate the timeline for
2. Map the process to find all savings to be delivered.
hidden/underlying costs and to
show where inefficiencies lie 6. Answer these central questions:
• How do we deliver the most
3. Prepare stakeholders so that they optimal talent acquisition
understand why you’re embarking service to Hiring Managers?
on the business case in the first place • How do we attract and retain
and to ensure any general grievances the best applicants?
or issues are addressed in it. • How do we measure the value of
talent acquisition to the business?
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4. 2 / Dig deeper to find out what it is really worth
Recruitment functions must not only learn
to identify the total cost of recruitment, To gain a true total cost of recruitment you
they must learn to justify the potential must factor in the cost/spend related to:
investment and/or identify the potential
savings from any proposed change. This • The existing Talent Acquisition Team
might seem fundamental to the very idea • Time spent by non-Talent Acquisition HR resources e.g. HR Business Partners, HR Admin, HR Systems
of a business case, but identifying these • The ATS deployed to support the recruitment process including licenses, maintenance, upgrades and enhancements
elements takes significant effort—often far
• Maintenance of web content, as it relates to advertising vacancies and brand
more than we first assume.
• Creation, design, maintenance and bounty payments for candidate referral programs
Understanding the total cost of the • Agency fees
recruitment process prior to confirming • Creation of recruitment marketing creative and collateral, either via external partners or in-house
the scope of any potential outsourcing or
• Recruitment marketing e.g. job-board licenses, press/online ads, events, fairs, sponsorship
insourcing move allows an organization
• Hiring Manager time i.e. creation of vacancy, approval process, screening applications,
to identify the greatest opportunities for
scheduling interviews, interviews, offer negotiation and on-boarding
savings and process enhancements.
• Discreet resources or teams within the business that have been created to support the recruitment
process i.e. recruitment champions, admin teams, Central Governance Teams
• Third-party assessment tools e.g. psychometric testing, behavioral analysis
• Background screening/reference checking and preparation of paperwork for onboarding
• Any communication with unsuccessful applicants
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5. 3 / Understand the process
The act of mapping the end-to-end
recruitment process can be invaluable To ensure you have the full picture, map the
—well beyond simply helping entire process from all three perspectives:
organizations to identify and capture any
hidden costs. Above all, it will highlight
the complexity or gaps within the
Candidate Hiring manager HR/Procurement
process and may offer its own insights
into the real improvement solution. • How/where will they find the job opening? • How do I raise my job opening? • What documentation do I need to
• How do I apply? • What documentation/ conversations do I prepare throughout the process?
• How do I find out about the need to have upfront/during/at the end? • What communication do I have with
progress of my application? • What part do I play in interviews/ my own team, with hiring managers
selection and screening the candidate? and external providers/candidates?
• What happens if I am unsuccessful
but still a valued contact? • What time/resources do I • Do I engage with different
put into onboarding? processes for different roles?
• What records do I need submit/update
when a new hire starts work with me?
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6. 4 / Read the mood
Even when you know what your recruitment
process really costs, and you know what Surveying the end users helps to determine which improvements will
the process map looks like, you need to have the most impact, and how open to change they currently are:
understand the conditions any change will
be made under.
How willing people are to undertake major Candidate Hiring manager HR/Procurement
change (especially key stakeholders) can, • What’s my view of this company • How successful has the recruitment • How complex and time-consuming is the
and will, determine the overall success of a from outside now that I’ve been process been in terms of meeting recruitment process? How many staff and
business case. Reading the mood as it relates through their recruitment process? my talent requirements? what proportion of their day is spent on
to recruitment processes needs to be looked • How worthwhile was the process • Do I have a positive view of recruitment-related activities?
at from internal and external points-of-view, for me and would I apply again? the process overall? • How effective is this investment in
and it needs to address how well people delivering the right people to the right
• Was the investment of time and • Is the process keeping pace
feel it delivers on their needs. roles in the right timeframes?
energy too much/too little? with my hiring needs, or am I
How do the people that are using this • How professional was it? experiencing long cycle times? • What do I feel the process says about me/
process most feel about the outcomes it is • Do I feel that there is too little/too much my team/our business?
delivering? If people are generally happy, involvement from me in the process?
what is the case for change dependent upon? • Do I feel the process cast us in the
If they’re not satisfied, is that because of the best light with the right talent?
process, or due to broader business issues?
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7. 5 / Make your benchmark meaningful
When evaluating the current performance For other organizations, a meaningful
of the talent acquisition function, it is benchmark may look quite different. It Look for external help if you need it.
This will ensure informed assumptions are made as
important to measure those elements that may be about the quality of the candidates
to what “good” talent acquisition should look like.
most impact the business overall. Every or the ability to source very specific types
organization is different, and this may of candidates. It will assist in capturing how the
include measurements such as: organization could benefit from:
In some cases, this kind of data is simply not
• Time to hire
going to be available. Hence, part of the Creative and innovative sourcing techniques
• Average number of vacancies raised per
business case may be to start capturing it.
year, by business unit and skill type Strategic workforce planning and talent demand planning
Or, you may need to benchmark and network
• Average number of vacancies filled per with other similar-sized organizations with
Market data drawn from multiple clients in your market or geography
year, by business unit and skill type similar hiring profiles to fill the gaps. It’s
• Typical sources of candidate per vacancy also possible to leverage the resources and Industry benchmarks, in terms of time to hire, sourcing optimization and
filled e.g. agency, direct, internal, referral knowledge of an external partner, which can candidate satisfaction data, from their existing client base
help to broaden the organization’s view of
recruitment and any associated change that
goes above and beyond process efficiencies.
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8. 6 / Define the value of recruitment
No matter which solution the business case If the change gets the go-ahead, this
proposes (in-house or outsourced), taking measurement will form part of the In defining the value of recruitment,
an outsourced approach to the performance rationale for communicating and selling consider how to:
measurement of the organization’s the investment it requires to the rest of
recruitment function will be a major the organization. Set service standards, but measure exceptions, not the micro detail
advantage in the long term.
Measuring the performance of recruitment Measure the source of candidates, but share with the business a
HR (like any other support function) is is about defining its value—and this is why comparison to what you would have spent in the alternative model
continually challenged to define, measure change may well be needed in the first
Measure time to hire, but find of a way of identifying time to competency
and communicate the value it brings to place. Plus defining the value will resonate
and the impact on productivity of carrying vacancies
the organization. By using an outsourcing with Shareholders and give your Talent
methodology to create your performance Acquisition function a voice in the strategy Measure satisfaction of hiring managers AND candidates
metrics, this value can be clearly and business planning process.
communicated to the stakeholders.
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9. About the Author
Sally Hunter is RPO Practice Lead EMEA for the Kelly Outsourcing &
Consulting Group and is responsible for the RPO proposition from client
relationships via the account management team to consulting on HR
transformation. Sally has extensive experience in the human capital sector,
including leadership positions within strategic account management for staffing
providers to operational delivery. Sally has also been on the “buy/client” side
leading transformational efficiency projects, that have included the outsourcing of large scale
recruitment and learning operations. As an independent Consultant, Sally has worked with a
number of clients to build the business case for change and shape their HR model in the context of
outsourcing partnerships. Sally has worked with Clients across the following key industry sectors:
Financial Services, Public Sector, Manufacturing and Pharmaceuticals.
About KellyOCG
KellyOCG is the Outsourcing and Consulting Group of Fortune 500 workforce solutions provider,
Kelly Services, Inc. KellyOCG is a global leader in innovative talent management solutions in the
areas of Recruitment Process Outsourcing (RPO), Business Process Outsourcing (BPO), Contingent
Workforce Outsourcing (CWO), including Independent Contractor Solutions, Human Resources
Consulting, Career Transition and Organizational Effectiveness, and Executive Search.
Further information about KellyOCG may be found at kellyocg.com.
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