Justifying spending on recruitment

By David Brown
|Canadian HR Reporter|Last Updated: 11/21/2002

Finding great people is still the number one priority at a lot of organizations and it will remain that way for some time to come.

But at a time when most businesses are holding the line on costs, recruitment can be a source of frustration for a lot of people in the HR community, says Fiorella Callochia, author and principal with Oakville Ont.-based HR Impact consulting.

They are expected to find the great talent that drives corporate performance as well as develop the practices, programs and policies that ensure the talent is willing to stick around. But at the same time they are often being told to do it with less money. “They are getting creamed in terms of budget,” she says.

The demand for talented people still exceeds the supply. HR departments certainly know this, but to receive the funding they want to conduct successful campaigns, they have to make the business case. HR professionals have to start acting like HR accountants, she says. “They have no choice. They have to talk like the finance person.”

They need to have all the data that clearly illustrates the costs of turnover to get the money to improve recruitment process so that better fits are hired in the first place and turnover comes down.

HR has to explain why it makes sense to spend the extra money for a focused, targeted recruitment campaign that may only turn up 10 high-potential candidates instead of posting an add on an online job board that may bring hundreds of resumes.

While it is not universally the case, HR is getting better at capturing the costs of turnover and recruitment and doing a better job of building business cases for the CFO and the CEO.

With an understanding of costs, smarter decisions around recruitment and retention can be made to keep those costs down.

Many organizations are interested in using referral programs to find people who are a good fit, says Callochia. And exit interviews are being used more effectively. It’s a good idea to do a followup interview a few months after the separation so that the leaving employee isn’t worried about jeopardizing a good reference, says Callochia.

Other organizations are also willing to spend the time and money to refine job descriptions so that when they do post an ad for a position they are improving the chances of getting the right person in the right position.

They need to clearly define the competencies they are looking for not just the personality type.

And in some cases, more responsibility for recruitment is being given to managers. If they are being held accountable for the turnover rates in their departments they should have more say in who joins the department in the first place, says Callochia.

The basic recruitment philosophy remains identifying the highest number of qualified candidates for the least amount of money, says Cathy da Costa, of Toronto-based Ad-Link a recruitment advertising consulting company.

But many organizations are looking for help to make recruitment more cost-efficient.

As the cost of newspaper advertising has gone up, its effectiveness as a recruiting tool has gone down. Trends like that are forcing organizations to rethink what they are doing with recruitment budgets.

Although the Internet is being used extensively many organizations are looking to improve how it is used.

Rather than just posting a job listing to one of the popular online job boards, they are going to agencies that can help put the ad in front of high-potential candidates, da Costa says.

Ads placed through association job boards, in newsletters, or even a Web site prospects visit frequently can be more effective. She also says there has been a big increase in the number of organizations doing direct mail campaigns.

A lot of her clients that want to improve recruiting success rates are asking about branding these days.

They want to promote themselves in the market as an employer of choice, she says. And rather than just posting an ad describing the job duties, companies are trying to explain to candidates why people want to work there.

The increased need for HR to use third-party help to improve recruitment campaigns is of course good news for da Costa’s company. But with the growing complexity and the rising stakes of the recruitment market, she says she’s just glad to see employers use an agency to improve recruitment. “It just makes so much more sense. I’m happy to know that someone is using one of our competitors than if they weren’t using an agency at all.”

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