THE TALENT ACQUISITION CHALLENGE 2009

Recruitment trends and issues impacting todays leading organizations

CONTENTS
Introduction .............................................................................. 3 The Challenge............................................................................ 4 Recruitment Process Outsourcing .............................................. 7 Weathering, Even Leveraging, the Downturn ..................................................................... 9 Look to the Future ................................................................... 11 About the Sponsors ................................................................. 12

CHARTS
#1: Environmental impacts on recruiting ....................................................................... 4 #2: Internal recruiting practices .................................................... 5 #3: Use of technology solutions .................................................... 5 #4: Most commonly outsourced recruitment processes ........................................................ 7 #5: Most common reasons to outsource recruitment processes ........................................ 7 #6: Most common reasons to outsource recruitment processes ........................................................ 8

Talent Acquisition Challenge | 3

INTRODUCTION
As the world faces unprecedented demographic, economic and competitive challenges, recruitment and retention remains a top concern. Recognizing the critical role talent acquisition plays, leading organizations are maintaining focus on attracting and retaining talented people. To assist forward thinking employers in how best to overcome these recruiting challenges and capitalize on current opportunities, the Talent Acquisition Challenge Report was developed by three industry thought leaders: Pinstripe, a leading provider of talent acquisition and retention services; the Human Resources Outsourcing Association (HROA), the definitive independent membership organization for HR outsourcing; and TPI, one of the preeminent sourcing and advisory firms. The result is newly released data compiled from multiple sources over a year-long period that captures the pulse of the talent acquisition market in 2008 and identifies trends and opportunities for 2009. The Talent Acquisition Challenge Report leverages data from:
The HROA/Pinstripe/TPI global survey conducted in the Fall 2008 Pinstripe HR Leader Polls conducted across 2008 from predominantly

mid-sized organizations
TPI Prevalence DatabaseTM ongoing data collected from Fortune 1000

companies
The RPO Summit, in Washington, DC, in December 2008

A summary of the insights from those efforts, as well as the collective knowledge of three of the sectors leading organizations, follows.

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THE CHALLENGE
Talent Paradox
Today, demographics and the global economic slowdown are significantly impacting hiring and talent management in both negative and positive ways producing a talent paradox. This talent paradox is created when organizations face skill shortages in some geographies and business units, at the same time that they experience reduction in force and an overwhelming surplus of applicants in other areas due to high unemployment. Leading HR practitioners interviewed at the 2008 HROA RPO Summit in December, expressed uncertainty regarding the current economic climate and its impact on recruiting. There was a shared belief that in difficult economic times, while many unemployed candidates may be available, currently employed individuals are reluctant to risk changing employers. Historically, currently employed individuals have taken a conservative wait-and-see approach. Housing market uncertainty inhibits relocation decisions; financial stability of the new organization and looming severance packages all create hesitancy among talented employed candidates to start a new endeavor. With unemployment approaching the highest rates in decades, recruiters face new challenges that require an overhaul of:
Recruitment marketing strategies (Why advertise at the same rate with

reduced requisitions and more candidates available?); and

Selection and hiring processes (With an overwhelming number of appli-

cants for some positions, deploying tighter selection criteria during a variety of steps in the hiring process is recommended).

Environmental impacts on recruiting

0% Economic downturn Skill shortages
Multiple generations in the workforce Increasingly aggressive competition

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Globalization

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THE CHALLENGE
Recruiting as a Marketing Activity
Many organizations have neither an active recruitment process in place nor recruiting professionals who see recruiting as a marketing activity. In fact, many organizations lack even the most basic recruiting strategy, relying instead on a practice of post and pray. For those who have embraced proactive talent acquisition strategies, the most commonly used are web solutions (including social networks and job boards), advanced technology, and resume banks. 3 Use of technology solutions % ENGAGING 80% 68% 45% 42% 41% 35% 5%

SOLUTION Utilized sourcing from the web and social networks Utilized job boards Added additional internal recruiting staff Added or enhanced technology Utilized resume banks Added contract recruiters or recruiting assistance None

Internal recruiting practices

0% Post and pray with no plans to enhance Post and pray with plan to improve Basic with no plans to enhance Basic with plan to improve Proactive 5% 10% 15% 20% 25% 30% 35%

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THE CHALLENGE
The Holy Grail: Metrics
In every C-suite across the nation, there has been a growing call for one thing: RESULTS. Across all functional areas, C-suite executives are looking for ways to measure challenges, opportunity, and success. Human resources and recruiting are no different. Talent acquisition and talent management are presented with the challenge of delivering compelling business cases to gain support for investment, if not to defend their very existence. Key questions HR leaders need to be able to answer include:
What is the cost associated with each new hire? What is the cost of recruiting, hiring and on-boarding a candidate? How do traditional response methods (i.e. job ads) compare with the

latest proactive techniques (i.e. social media)?

Which current manual processes are best replaced with automated and

self-service options?
How can recruitment and HR managers effectively answer these pressing

questions?
Are we strategically prepared to meet our short- and long-term goals? Do we have, and if not how do we find, the talent to face our future?

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RECRUITMENT PROCESS OUTSOURCING

4 As with any business challenge where efficiency, cost savings and innovation are needed, leaders face the build-or-buy question. Is the most optimal choice internal reengineering, outsourcing, or status quo? For some, recruitment process outsourcing (RPO) may be the answer. The fastest growing segment in the HR outsourcing arena over the past several years, RPO is garnering a lot of attention and increasing market size. Long term HROA research has indicated a significant uptake of recruitment outsourcing between 2005 and 2008, from as few as 17 percent of organizations to as many as 47 percent outsourcing some portion of their recruitment processes, and continued growth is anticipated. As illustrated below, organizations utilize outsourcing for all aspects of the recruitment process and find cost and efficiency benefits from those business choices. Organizations have a wide variety of reasons for outsourcing recruitment processes, and there really isnt broad consensus on the main reasons. Most commonly organizations say they outsource recruitment to decrease time to hire and lower the cost of recruitment. The next most common reasons cited are increasing both candidate volume and quality. 5 Most commonly outsourced recruitment processes
0%
Background checks/drug screening

10%

20%

30%

40%

50%

60%

Reference checking Candidate screening Ad creation and placement Name generation and sourcing
Recruitment technology

Job posting distribution

Temporary help

Recruitment marketing/ad strategy Selection/assessment testing

Interview scheduling

Most common reasons to outsource recruitment processes

0% Decrease the time to hire 10% 20% 30% 40% 50%

Lower the cost of recruitment

Improve candidate quality Increase candidate volume

Gain access to technology

Improve market outreach

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RECRUITMENT PROCESS OUTSOURCING

RPO Impact
Outsourcing parts of the recruitment process and utilizing end-to-end RPO have a positive impact on the quality of candidates an organization can attract; half of respondents to the HROA/Pinstripe/TPI Talent Acquisition Survey agreed that their RPO programs have improved the quality of candidates their organizations attract. This finding is important as improving quality of candidates is included in the top three reasons companies turn to RPO. A significant number of respondents also say that RPO helps their organizations gain competitive advantage and bring about positive change in their organizations.

Most common reasons to outsource recruitment processes

0% Improves the quality of candidates our organization attracts Helps my organization gain a competitive advantage Brings about positive change to my organization Is part of our talent management strategy Benefits candidates as well as hiring manager Helps my organization reduce costs Strengthens the role of HR with senior management 10% 20% 30% 40% 50%

Is necessary for my organization to operate in todays economic climate Is the solution to the managing the fluctuations in staffing demands
Agree Disagree

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W E AT H E R I N G , E V E N L E V E R A G I N G , A D O W N T U R N
Finding, hiring, and retaining the right people remains a challenge through all economic climates. Difficult economic times may lead to limited resources across some functions and an overwhelming number of candidates in others. Although recruiting may be down, the number of people looking for a job has increased. As a result, there are more resumes to consider, more candidates to interview and more responses to compose, regardless of the decision on their candidacy. Unfortunately, contrary to the perception, recruitment teams may be busier than ever during downturns especially if the resources in the Recruiting Department become part of staff reductions and reallocations. Encouragingly, organizations that take time to build infrastructure during a downturn will be better equipped to ride out the cycle and will be better positioned when things improve. In order to do so, it is necessary to take a step back to evaluate and revise workforce plans, talent acquisition processes, and technology approaches. 1. Evaluate Workforce Plans Whether companies engage RPO providers or take on the recruitment process internally, now is the time to build in efficiencies, maximize existing tools, eliminate waste, innovate, manage vendor relationships, and establish strategic partnerships. 2. Review Talent Acquisition Processes Leverage Your Hidden Goldmine One of the most commonly overlooked tools in any organization is the existing database. A real goldmine of information, the resumes collected by recruiters and HR staff over the past years should provide great leads on passive and active candidates. Tap Your Current Employee Pool Identify individuals who have been interested in gaining experience in other functional areas and who would be willing to wear two hats during difficult times. For the right employees, the current climate might provide real opportunity to gain much needed and desired experience in other areas. Strong employees will appreciate the opportunity for long-term career growth, and it will demonstrate how much you value them. Review Your Funnel and Revise Your Processes Companies may have fewer openings, but will have many more people applying, which will significantly increase the amount of time spent screening and responding to applicants. This will exhaust HR teams and could actually increase effective cost per hire. This is the right market to adopt a highvolume recruiting model for processing a high volume of candidates, in a time of low job requisitions.

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W E AT H E R I N G , E V E N L E V E R A G I N G , A D O W N T U R N
3. Upgrade Your Organizations Technology Tools The technology available to find and communicate with candidates has become more sophisticated and is core to both active and passive candidate recruiting. This includes: job posting distribution (like Viper and eQuest); posting aggregators (including SimplyHired and InDeed); SEO (search engine optimization) offered by Jobs2Web; and, candidate search and marketing technology like AIRS SourcePoint. These types of technology aids are in the portfolio of any proactive recruiting department and RPO provider. Most integrate easily into many standard ATSs. If they arent integrated, then a download/upload or import/export is available to connect the technology. The marketplace is moving toward a comprehensive technology solution that creates a one-stop-shop for talent acquisition where integration is on one platform. HR management technology consolidation goes beyond talent acquisition to encompass a full suite of services for talent management that is available to employees and managers on a self-service basis. These include workforce planning, talent acquisition, performance management, learning management, payroll, and succession planning.

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LOOK TO THE FUTURE

Even (or perhaps especially) in an economic downturn, the demand for talent remains a top concern for the nations leading organizations. Organizations that seize opportunities presented during downturns not only to attract and retain top talent, but also to build a recruiting infrastructure that is flexible and scalable are most likely to thrive in any economy. Now is the time to innovate and embrace solutions that will drive future growth. The market has shifted from a scarcity to an abundance of candidates in a very short time, so organizations need to adjust accordingly to be certain that they arent overspending or spending in the wrong areas. However, this is a great time to be out in the market as the competition for talent is much lower. To take advantage of it, companies should remain active but identify cost saving initiatives such as renegotiating existing relationships with providers; no one should be paying last years rates! Protect Your Brand! The few companies hiring will receive hundreds or thousands of resumes for every job they post. It is critical that they incorporate tools so that they dont miss good people or alienate future prospects and customers. This is particularly important for consumer brands, as every applicant is also a possible customer or patient. As bad as it may seem, remember that every downturn yields winners and losers. Companies that are strategic are most likely to weather the current economic climate, and may even emerge as more efficient and successful organizations.

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ABOUT THE SPONSORS

Known for innovative and uniquely effective sourcing of talent, in addition to executing on customer-focused process improvements Founded: April 2005 by an experienced team of HR, HRO and RPO leaders and industry veterans Total Employees: 136 FTEs; Average Recruiter experience is 5 1/2 years; Pinstripe Leadership Team (12) average HR Leadership experience is over 12 years Headquarters: Brookfield, WI; 32,000 square foot Service Delivery Center; 9,000 square foot training facility Target Markets: Commercial - Global 5000; Healthcare - Domestic Healthcare Systems www.pinstripetalent.com

Worldwide sourcing advisory firm Nearly 400 advisors Completely independent and unbiased Provide sourcing advisory services in: IT HR Finance All other business functions

Our goal is to help our clients optimize their business operations through a combination of insourcing, shared services, outsourcing and offshoring. www.tpi.net

The HROA is the definitive independent organization for all those who purchase, provide, or participate in HR transformation and outsourcing. Our membership encompasses over 7,500 HR executives, including the largest 50 buyers, the top 30 providers, the leading sourcing advisors and attorneys, and the best thought leaders in HR Transformation. The HROA brings its diverse membership together to set standards and practices, provide peer networking, and maintain a robust curriculum. For additional information about the HROA or to join, visit www.hroa.org. www.hroa.org