Reduce your recruitment risk with RPO
All recruitment poses a risk to the organisation doing the recruitment. This risk is heightened when the circumstances of the recruitment are out of necessity or pressured choice.
Rapid recruitment, pressurised recruitment, or a sudden large requirement to recruit can cause poor hiring outcomes that expose your business to expensive risks that you’ll need to address.
The problems caused when recruitment goes wrong can include the poor performance of a new team member, increased cost of filling the vacancy and worst of all, potential damage to your employer brand that could affect your recruitment into the future.
By changing how you recruit from a traditional approach to hiring new staff to Recruitment Process Outsourcing (RPO), you turn your recruitment issues into recruitment wins.
Mitigating the Cost of a Poor Hire
What could cause your organisation to make a poor hiring decision, and how can you mitigate the resultant costs?
There are many reasons that could cause an organisation to employ the wrong person when they recruit for a position.
- Understaffed talent acquisition team
- Your recruitment processes used to attract, interview, and employ staff are undefined and not as effective as they could be
- You urgently need to fill a role that causes you to rush the recruitment process
- Your competition is more effective at attracting top talent in a market short on high-quality candidates, leaving your organisation with less than ideal candidates
When hiring teams are under pressure, elements of the hiring process and due diligence can suffer. These can include not adhering to thorough hiring processes like checking a candidate’s relevant experience, testing their skills, and ensuring that they are a good cultural fit with the organisation.
These factors can expose your organisation to long-term costs associated with imperfect hiring. Research found that the cost of replacing a manager within six to twelve months of employing them is 2.3 times their annual salary. So, for example, a manager earning £100,000 could cost £230,000 to replace.
Additionally, high candidate churn causes unwanted vacancies, which will impact your bottom line and the potential to improve your overall revenue.
Direct costs of imperfect hiring decisions aren’t your only problem. Indirect costs can include poor delivery of services to clients leading to unhappy clients and the impact to your organisation’s culture from your other employees having to work with an underperforming colleague.
Add in the pressure, increased stress and resentment caused by covering for a colleague who isn’t working out and then having to watch when they are let go can have an impact on team morale.
The answer to these recruitment problems is RPO, as it’s designed to improve the quality of your recruitment even when hiring quickly and at scale.
How to lessen the costs of unfilled roles
By 2030 the global talent shortage may be as high as 85.2 million people, at a cost to the companies suffering because of this dearth of suitable candidates running to trillions of dollars in lost economic opportunities.
However, the impact of a business’s inability to fill vacancies and operate with unfilled roles is considerable and affects more than lost economic opportunities. These vacancies create additional work for existing employees, leading to burnout, stress, and employee churn, adding extra stress to your already overworked team. Don’t forget increased time to production and damage to your brand – a talent shortage affects every area of your business.
During the pandemic, thousands of organisations experienced this stress first-hand when talent shortages hit a ten-year high, and 69% of employers were struggling to fill their vacancies in a candidate-oriented market.
Traditional recruiting in those circumstances is ineffective; a new approach that leverages a ready-to-go, highly efficient, fast, and effective recruitment process that not only decreases your time to hire but will maximise your recruitment ROI is required.
Protecting the recruiter brand
To de-risk recruitment in a volatile candidate-driven market, an RPO solution could enhance candidate attraction which will, in turn, protect the employer brand by avoiding the problems created by poor hiring choices.
Poor hiring can affect an employer’s reputation in many ways. The employee you hire will generally be a poor employee, affecting your organisation’s ability to deliver to its customers, impacting your brand. High attrition rates can result in negative word-of-mouth from clients, suppliers, competitors and customers, and these same people will notice when their point of contact keeps changing.
From an employee’s perspective, their experience working for your organisation will also have been negative. In addition, they may vent their frustrations online, further affecting your brand and making it more challenging to attract the talent you need.
An RPO solution for your recruitment offers a highly professional hiring process that allows recruiters to source candidates with the desired attributes against the organisation’s requirements. This approach provides an enhanced candidate experience that will add lustre to the employer brand and ensure that the best talent on the market is drawn to the organisation.
An RPO recruitment solution helps to ensure that the new hire aligns with the organisation’s culture and transparent reporting offers visibility into the entire recruitment process removing the usual risks of traditional recruitment.
During 2020, one of our clients, a major corporate, decided to furlough their entire talent acquisition team and utilise our RPO to manage critical hires and candidate care to protect their brand and candidate experience. The few roles that needed hiring were paramount to the business. By maintaining the flexible RPO, they were able to meet their needs.
When recruitment started to increase in the summer, they brought back 50% of their talent acquisition team and slowly reduced the RPO to ensure a seamless integration of the internal TA team back into the business. This proves the agility of the service.