By Tim Bradley, managing director, Pecaso UK

If businesses believe that people are the jewel in an organisation’s crown, why are so many HR departments poorly prepared when it comes to recruitment? Rather than having watertight, failsafe resourcing processes in place too many organisations expect their HR departments to don hard hats and fire fight the recruitment blaze when they are given the green light to increase head count or find a replacement, says Pecaso’s Tim Bradley.

There’s no argument that in this day and age it’s becoming more difficult for companies to grasp hold of and retain their slice of market share. As we all know, people are the key when it comes to company performance and retention and churn percentages are some of the best indicators of how a company is fairing. But when it comes to recruitment, many companies fall flat.

The recruitment industry is one of the healthiest in the UK, worth an estimated £23 billion, according to the 2002/2003 Recruitment Industry Survey. Given the cooling down of economic conditions over the last few years, this year has seen the first decline in recruitment market worth since growth began almost 30 years ago, down just over 5% on the previous year.

This figure is indicative of just how valuable human capital has become in British industry. The lowest unemployment figures since the Second World War indicate that there is burgeoning competition for quality candidates and companies have to be increasingly wily to attract the type of people they want to employ.

If human capital is such a precious resource, why is it that many companies are decidedly slipshod when it comes to recruitment? Generally companies are far too reactive and tend to fire fight when faced with the latest recruitment drive and this can prove fateful.

When managed badly, recruitment can prove to be a very expensive business. The visible costs are factors such as huge fees that companies pay to recruitment consultancies and inflated advertising costs.

But in addition to the obvious costs, companies are incurring a huge opportunity cost when it comes to this core HR function. For example, HR departments don’t consider a lack of process efficiency when it comes to cost leakage. Wasted time and effort means that HR professionals get distracted from their core business, which in turn, costs the company money.

If the process was managed effectively, time and effort would be maximised. Lack of organisation also means that employer brand suffers. This has an effect on the image that the company wants to project to external candidates and could cost them in terms of reputation and quality candidates.

It can also have an effect internally, and damage reputation as far as existing employees are concerned. HR departments need to start measuring these intangible costs as it will help the company to maximise its recruitment budget.

In-house recruitment is generally based on three methods and if HR departments honed these techniques into an efficient and streamlined system, the recruitment function could be vastly improved.

DIY
The first is the Do-It-Yourself (DIY) approach.

Sourcing candidates via advertisements and gathering information from the corporate web site is the general approach. Many companies do this haphazardly but it’s vital for them to structure it properly.

An internal promotions and job review policy is paramount if companies want to retain knowledge within the organisation and keep job satisfaction at an optimum. A solid advertising strategy is also important.

Many candidates go directly to the company, submitting CVs via corporate web sites or simply posting them. Do HR departments have facilities to log these candidates correctly or do these CVs simply vanish under piles of paper in an in-tray?

Businesses must have the systems to track these applications accordingly, because even if they don’t have relevant positions at that time, there will come a rainy day when they will. In the same way you wouldn’t throw out any other surplus resource, why waste opportunities with quality candidates?

E-recruitment
The use of electronic job boards is another way that companies recruit. If companies use this method, they need to be very precise when it comes to job specifications.

Recruitment agencies
The use of recruitment consultancies is the third and most popular option, but companies are often guilty of relying too heavily on external agencies.

Outsourcing recruitment is not necessarily the panacea it paints itself to be. If recruiting is proving to be a problem for an organisation, then outsourcing that problem is not necessarily the right answer.

If HR are having difficulty in sourcing quality candidates, then why should an external agency have any more success? Many recruitment companies are very effective in terms of fitting candidate profiles to the company but relying solely on recruitment companies is a costly business.

They do have their place, but as a support to the internal recruitment function. When using them, HR departments should also have an established service level agreement in place. Furthermore key performance indicators and a benchmarking process will ensure that HR departments are getting a guaranteed level of service and quality of candidate, for the right price.

A combination of all these methods might provide the best solution. Analysis of the current system can be an important foundation for the future process, as it can provide a sound benchmark to gauge future performance against.

It can also assist in identifying where the “disconnects” are. The sub-standard areas of the current recruitment process. From this starting point, the setting of milestones and a mapping process are imperative in honing the system for the future.

As with external suppliers, there is no reason why HR departments shouldn’t benchmark their own performance. This limits “slip” in the resources that are being utilised and ensures that HR staff have always got their eye on the ball.

With quality candidates becoming an increasingly elusive entity and staff retention and churn making an impact on board room agendas, the need for quality human capital and retention is one of the biggest challenges that face businesses today.

With this in mind, it’s time that HR departments woke up to the recruitment challenge and implemented processes that help them make the most of internal recruitment procedures and stop them letting precious human resources slip through the net.