Outsourcing Hiring: A Competitive Business Advantage

It seems as though everyone’s doing it these days.  Outsourcing is becoming a common practice among organizations—big and small.  Today, more functions than ever are being outsourced to those who offer companies a dual benefit of increased success coupled with meeting high expectations of lowering overall costs. Employers are coming to understand the reality of internal hard and soft costs and the benefit of outsourcing to realize an overall cost savings.Global outsourcing is, of course, becoming increasingly obvious to consumers, but that represents only one piece of this business practice.  Even more, outsourcing locally and nationally is trending upward and becoming more common.  The overall tone in many industries today is that outsourcing not only makes sense because it allows companies to become more efficient while reducing internal costs, but it is in fact almost necessary to achieve the highest levels of both effectiveness and efficiency.  Outsourcing ultimately provides businesses with the capability to re-direct internal efforts to core areas of the business.  One business function that has historically been taken care of in-house, but has, in recent years, become outsourced to a very large extent is the comprehensive hiring process.

Decreasing Internal “Drag on the Sled” 

Hiring is a critical but often difficult and time-consuming part of doing business.  Competition alone requires that companies know what makes for a great hire to meet high customer demands as well as increased objectives and business goals.  Hiring the right people is a crucial variable in the success of any organization and its varied business units.  To achieve success, employers must rely on and invest in resources that will enable the company to hire great people. 

When managed completely in-house, the internal hiring process often causes a “drag on the sled” that is pulled by employees who are often charged with multiple tasks internally.  Of course, it is important to have someone internally involved in this process; however, using an outsourced approach to complete some aspects of this process can lead to a much more effective, cost-efficient, inclusive and long-term positive result.  Companies need people who will accurately represent their company, their values and their vision regardless of the title or level of the position.  It’s just good business.   

The typical hiring process for most companies begins well before the human resources or other administrative person takes active steps to interview potential candidates.  Many of these steps can draw away from the internal focus and can be skewed by internal bias.  Outsourcing to achieve third-party professional input, while ensuring that all critical factors are considered, can be extremely beneficial to a successful hiring process and end business result.  This process includes a variety of hierarchical steps.

1) Personnel Planning  

Personnel planning is different from succession planning.  A personnel plan is a long-range training and replacement plan, and it is an essential first step in the hiring process.  This step is one that may be pre-identified within an organization; however, if it’s not already in place, an outsourced HR professional can work with company administration to examine the structure, focus, needs and linear advancement of employees throughout the organization.  In doing so, the outsourced consultant may be in a position to see various opportunities and help structure a personnel plan that works for the company.  The personnel plan then becomes an important tool used to ensure that current and future staffing needs and levels are identified and met.  The personnel plan includes components such as recruiting efforts, training and development needs, transfers and promotions, terminations and retirements.  A solid personnel plan helps avoid both under and over staffing and prepares for future expected needs.

2) Job Descriptions and Critical Success Factors

Every organization with employees must have well-established and true-to-form job descriptions for all positions throughout the company.  Without this, how can an employee truly know whether he/she is performing what is fully expected of him/her?  Likewise, how can the company truly know and measure whether the employee is fulfilling all necessary obligations of the position and doing so in a consistent manner amidst others who may share that role?  In addition, critical success factors are an important step and component to consider.  Critical success factors are skills, traits, experiences, etc., that a job candidate must have to expect success in a given position.  Whether part of the job description, separately identified in a peak performer profile or developed and introduced in advance of evaluation or performance appraisal, these are critical to hiring long-term successful employees.  Often, organizations look to outsource the development of job descriptions and critical success factors.  By outsourcing, an impartial evaluation of positions can be made and standardized.  A good outsourced consultant will use a position analysis questionnaire as part of this process and will include communication with various employees within the positions to be considered.  When done internally, history shows a less complete assessment and an expectation differential between company and employee.

3) Identifying Candidates

All companies identify candidates in different ways.  Whatever the process includes, the prescreening step should not be overlooked.  Often, prescreening can reduce the probability of time wasted interviewing candidates who are simply not qualified or who just will not fit into the organization.  Prescreening is a function that is very often outsourced to HR consultants. They can help weed out those who are not worth interviewing based on criteria pre-identified by the company.  The outsourced professional is well educated in the art and science of prescreen interviewing and is experienced in making good decisions regarding the entire hiring process and the implications of each component.  In the prescreening process, individuals’ knowledge, skills and abilities are compared with position standards, job descriptions and critical success factors.  Through this process, viable candidates can be identified.

4) Conducting Interviews

Too often, those making hiring decisions forget that the end goal of an interview is not to fill a position; rather, it is to find a person who is the right “fit” for the organization.  While internal administration is surely involved in making final hiring decisions, outsourced professionals can also add value to this part of the process by determining a candidate’s potential or probability of success. From the development of behavior-based questions, to actually aiding in the interviewing stage, more companies today are seeking assistance from outsourced HR professionals.  In addition, companies are looking to outsourced consultants to design and incorporate job fit tools in the hiring process.  The development of a “job match pattern” allows candidates to be measured against an identified pattern associated with probable success, based on the company’s unique requirements and including critical competencies for success.  Outsourcing for this function has grown and is expected to continue.  As a final stage, and often in conjunction with determining final selection, background checks are often performed, which are most commonly outsourced as well.

The Hiring Process Takes Time

The process of hiring is one that is time intensive.  Outsourcing the hiring process allows an outsourced firm to offer their core competencies to the organization.  This often leads to a greater time allocation and direct focus on the company’s needs, as the outsourced professional understands both the competitive nature of business as well as what a successful candidate looks like.  Outsourced professionals gain an understanding of the employer’s specific hiring requirements by getting to know their needs, getting to know their structure and operations, getting to know their people and getting to know the culture of the company. All of this knowledge is necessary to identify and accurately represent the organization to candidates.  Just like internal administration, outsourcing focuses on meeting high expectations of what the company requires in qualified candidates.  While the outsourced professional works diligently to protect the employer’s best interest, internal resources can be directed toward achieving other core functions of the organization.  Rather than losing time through added internal responsibility, outsourcing frees internal resources and serves in a complimentary manner to balance the hiring process, from beginning to end.  

What to Consider When Outsourcing:

1. Is the company comfortable allowing another person/firm to be part of your hiring process?  Some people have a difficult time letting go of the reins, but if they can learn to do so, the benefit of outsourced assistance can be realized to the fullest.  
2. Does the outsourced professional have documented processes that will work easily for your business without going through a lot of red tape?  Outsourcing should make your life easier, not add extra tasks and work for internal administration. 
3. Does the outsourced professional have the resources to begin working on your staffing needs right away?  Hiring is important to you and your company, so a good outsourced professional should be in a position to make your needs a priority.
4. Don’t be afraid to ask the outsourced professional questions.  Being part of the process does not have to be time-consuming for internal administration, but taking the time to be involved and even asking for references is an important step to consider.
5. Don’t partner with an outsourced professional solely based on price.  Companies should look for a good balance between price, value and experience to receive the end quality results they seek.
6. Communicate in writing via a service provider agreement to clearly outline expectations, changes to the agreement, specific roles and deliverables.  Insist on written confirmation from the outsourced professional to ensure a mutual understanding of what is required, and expect feedback and reporting based on the work that is being performed.

Outsourcing all or part of the hiring process simply allows the company to do what it does best—remain focused on the business of increasing business.  It allows companies to use their human resources more effectively and efficiently, it reduces internal time-consuming drag and leads to an overall boost to bottom-line operations.  By outsourcing components of the hiring process, internal capital is freed up and may be re-invested into other key areas of the business to focus on organizational strategy, growth and continuous development.  Ultimately, the choice to outsource does not move away from control; rather, it moves toward an ever-changing focus on the varied approach to business success.

Construction Business Owner, December 2007