How do you develop a talent pipeline for your future recruitment needs?

Blog - Keyboard Edbury Daley

Despite continued improving market conditions for the recruitment of procurement professionals, there are many organisations still facing major challenges identifying the talent they need for their business. The very best candidates with specific category expertise are highly sought after in an increasingly competitive hiring marketplace. A common theme is hiring managers knowing the skills required and when they will need them, but not being in a position to a progress as quickly as they would ideally like.

Under what circumstances do clients face this problem?

The current economic climate is promoting a cautious approach to increasing staffing overhead. Therefore hiring managers can be waiting for headcount sign off and want do some forward planning because the new hire is urgently required to help meet business objectives.

Most businesses want to explore internal candidates before searching the external market for reasons of cost saving and creating opportunity for existing staff. However, this action can create delays spent conducting an internal process that isn’t always expected to be successful.

Consultancies and Procurement Service Providers need to increase capacity for forthcoming projects try to estimate when they will receive client approval to start at which point the need for extra staff becomes urgent. A hiring company has outsourced recruitment to generalist providers who lack the specialist procurement market knowledge to find the right people quickly.

Project Timescales

It is also worth noting the amount of time it takes to to complete a recruitment campaign.  If you wish to conduct a thorough selection process interviewing several candidates at first stage and then arranging second and third stage interviews with busy diaries, it can take several months from receiving CV’s of suitable candidates to formalising a job offer for the successful applicant. If you then factor in notice periods of successful candidates which with senior appointments are often three months, it can take as many as 5 to 6 months before the chosen candidate joins their new employer. Of course it’s possible to recruit in a much shorter time frame but this demands effective candidate sourcing and commitment to prioritise the process from both line management and HR.

Effective Talent Pipeline planning can help with candidate sourcing and get the recruitment process off to a flying start.

Challenges to be overcome

  • Accurate forecasting of realistic timescales and achievable targets
  • Management of candidate expectations on said timing
  • Avoiding losing momentum when the recruitment process takes longer than desired.
  • Loss of strong candidates who take other roles or lose interest.
  • Competition for the best available talent

Our range of solutions

Our experience tells us that there is no one single solution to overcome these problems.  It requires a range of recruitment tools to plan effectively for swift effective recruitment campaigns even as little as two or three months ahead. We have developed our capability in this area by working in all the potential scenarios mentioned above, particularly with the consultancy businesses seeking to staff anticipated new projects.

The first thing to note is that there needs to be a realistic understanding from all parties of what can be achieved so we begin with educating hiring managers about the definition of a candidate pipeline, and the processes required to develop them. We make sure that the hiring managers and relevant HR contacts are truly engaged in the process and understand the obstacles involved.

We then study the relevant market conditions to analyse the amount of time it takes to identify and engage with relevant candidates before designing an appropriate strategy to develop the pipeline required to meet customer demand. We combine most or all of the following techniques to build a Talent Pipeline of potentially suitable candidates:

  • Assessment of both interim and permanent resource options
  • Use of several Executive Search techniques including defining target areas to research for suitable candidates
  • Talent Mapping in competitor organisations as agreed with the hiring manager.
  • Constant networking to source candidates who are new to the market.
  • Effective management of candidate and client expectations.

The crucial factor in delivering this service effectively is understanding the relevant market conditions and using that knowledge to combine the available tools effectively.

Case Study

One of our clients, a leading multi disciplined management consultancy, has headcount restrictions across the business, yet the Procurement practice is at full capacity and has several new projects in the pipeline. The moment one of these projects is signed off by the client, so too will the required head count, but until then they can only plan for the resource they need.

We have assembled a pipeline of both interim and permanent candidates with the relevant skills for the clients requirements using the methods outlined above. In particular we have used talent mapping and extensive networking to identify the best available candidates in the permanent market.  Interim resource has been identified through both networking and online advertising. We make contact with the candidates every time we receive an update from our client, managing candidate expectations on time scales and gaining an update on their own status.

We then inform the client of any significant changes of candidate availability every 1-2 weeks as agreed. The deadline has shifted on several occasions now through no fault of our client, however we still have a wide range of highly motivated candidates ready to attend interview with the client as soon as they are able to commence the process. We currently have eight excellent interim options for two or three roles, and up to eight permanent candidates for one or two full time appointments.

 

What makes procurement people want to move jobs?

Blog - Keyboard Edbury Daley

A great recruitment strategy actually starts with the retention of your best people. Why? Retaining, developing and promoting your best people sends a very positive message to the market that your department is a great place to work. Conversely an organisation with high staff turnover and unhappy staff will quickly gain a negative reputation.

So how do you keep your best people happy, motivated and away from what is a very busy job market? Here we look at the reasons why procurement professionals to want to leave their current employer, what we in the recruitment profession call “push” factors.

From our experience with procurement people there are a number of factors in play. Using years of anecdotal experience, here’s a list of the most common reasons people tell us they want to move.

Lack of career progression

When people reach the glass ceiling where they realise their future opportunities for advancement are limited they are generally willing to consider roles with organisations where those opportunities are considerably better. This is a common mindset amongst “passive” job seekers.

Lack of training and development

“I’m not learning anything” or “I don’t feel challenged” are common complaints that usually tie in with a lack of career progression.

Break down in relationship with boss/peers/stakeholders

This can lead to a pretty unhappy time at work and usually results in a desire to move jobs as quickly as possible.

Lack of senior management support

Procurement needs sponsorship at the highest level to effect positive change.  A lack of support from the top is a common reason why departmental leaders want to move.  Similarly for those working with difficult or uncooperative stakeholders in Category Management roles, going to work can be very unrewarding and encourages people to seek an environment where their skills will be valued by others.

No challenge left in the role

Many leading procurement people thrive on delivering the inherent change required to deliver better commercial outcomes.  When they have delivered significant improvements and are left with running a “steady state” they become bored and seek the next challenge, usually in a new employer.

Treated unfairly

When people perceive that others are being treated better by senior management, whether it be through promotions, pay rises or bigger bonuses, this breeds resentment and pushes that person onto the job market.

Colleagues moving on

When people see their friends at work moving to other organisations for better roles and salaries they begin to wonder if they should be considering options outside their current employer.

Company health/profitability

By definition procurement people are commercially savvy and have access to all sorts of financial data.  They know when the company is struggling and this brings the issue of job security onto the agenda.

Work/life balance

Working long hours, making early or late calls to colleagues, stakeholders and suppliers in different time zones and excessive work loads will be tolerated by many in the short term but when it becomes a long term trend and impacts on your personal life it becomes a source of discontent.

Practical reasons

A significant change in personal circumstances often prompts people to look for a new job that is more suited to their lifestyle.  People also move because of excessive business travel and difficult commutes.

Financial

It is actually very rare that a procurement person lists salary as the principal reason why they want to consider a move.  In fact it’s usually us that raises the issue of salary and benefits when we first speak to a new candidate and most people will tell us that its only one consideration in a much broader picture.

However when it comes to actually discussing a job offer, it becomes clear that the salary is usually a critical factor. This situation is perhaps best illustrated by something one of my senior management consulting clients once said to me:

 “The thing that irritates me about hiring procurement people is how they switch from sales mode in interview to buyer mode at offer stage.  They tell us that career progression is their top priority then feel the need to demonstrate their negotiation skills and end up giving the impression it was about salary all along.”

Whilst this maybe a slightly harsh judgement, it does offer an interesting insight into how many procurement professionals behave during the process, and confirms that salary is a key driver in almost every job move.

In our recent research into recruitment best practice we asked how much of an increase in basic salary would you require to commit to a move? Only 10% of participants would move for an improvement of 5% on their salary, whilst 44% wanted at least a10% uplift.  39% said they would only move for an improvement of 20%.

With the skills shortage we mentioned above and this approach to negotiating job offers, its clear to us that companies looking to attract the best procurement people will have to look carefully at their budgets in 2015.  Quite simply, if the financial package on offer isn’t attractive, most procurement people will wait until someones makes them an offer that does meet their expectations.

Our message to procurement leaders is this – we are on the cusp of a skills shortage in key areas of the procurement profession.  Hiring good people is becoming increasingly difficult in a competitive job market and your best people will be in the sights of head hunters. A key target for you in 2015 is to work hard to keep those best people.

Whilst a small degree of staff churn is viewed as healthy by most, keeping your best people will also make it easier to attract a quality replacement when you do lose somebody.

How to avoid the ten most common hiring mistakes

Blog - How to avoid the ten most common hiring mistakes

With increasing competition for the best staff an effective recruitment strategy is vital. Here we look at the ten most common obstacles to attracting the talent required for your business.

1. Understand your internal recruitment processes from the start.

A lack of awareness of standard recruitment procedure in your company leads to additional steps and delays. Typically this can be anything from an additional round of interviews or psychometric testing to a medical. Introducing these stages haphazardly part way through the recruitment process is very off putting to potentially strong candidates often leading them to lose interest or accept a job elsewhere. If you aren’t absolutely sure of the procedure speak to HR before you get started and be clear with candidates about the next stage throughout the hiring process.

2. Be realistic about candidates attitudes towards salary when moving jobs.

Unless there is a huge improvement in non monetary terms such as a much shorter commute, candidates are looking for an absolute minimum of a 10% increase in basic salary, often more. Your company may well be a desirable employer but you still need to budget for a reasonable salary increase for your chosen candidate.

3. Be precise about the salary budget.

A recruiting company states that the basic salary for a particular vacancy will be £50k to £55k and then when the offer is made to the successful candidate it is £50k which, it transpires, was always the absolute maximum. The extra £5k mentioned initially to the candidate could be crucial in creating an incentive for the candidate to be interested. So be clear from the start and therefore ensure that the candidates you see fall within salary budget.

4. Don’t cast the net too wide.

Consider the following scenario: you’ve posted your vacancy on your company website and linkedin, you have an advert in a trade journal and on several of the online job boards and you have instructed six recruitment agencies. You have covered all the bases and are expecting some great candidates to interview. However, adverts on or offline have always been an unreliable source of quality candidates so you are probably hoping your recruitment agencies will produce the goods. But each agency knows that there is five other agencies and a slew of advertising to compete against. They are on a no placement no fee model and their chances are slim. So they spend their time working on other assignments where their chances of making a fee are greater and leave you without the quality shortlist you were hoping for. Be more strategic in your selection of recruitment methods and agencies rather than going for the catch all approach.

5. Develop a full understanding of the experience and the other clients of the recruiter working on your behalf.

You create a PSL panel of recruiters and agreed terms. The successful companies impressed you with their slick presentation, powerful brand and big office networks. But did you meet the person who will be responsible for selling your senior level vacancies to the best candidates in your industry? Recruitment consultancies are typically high staff turnover businesses and you may have an inexperienced consultant placed on your account. Ask your recruiters which of your direct competitors they work with as this may limit their ability to approach and attract candidates who could be an ideal fit for your needs.

6. Don’t negotiate too hard on recruitment fees.

If you have multiple vacancies in your department you can use this leverage to get your chosen recruitment consultancy down to a low percentage of basic salary as a placement fee. You may have got a great deal, but only if the recruiter fills all the vacancies. Remember they are working on a no placement no fee model and almost all of their other assignments will be more lucrative than your work if you have pushed too hard on their fee level. Given your multiple vacancy assignment you would expect to be near the top of their priority list. The fee deal you struck probably means you are a lot lower than you think so strike a balance whereby the terms are attractive for both parties to ensure you get the best results from your recruiter.

7. Don’t make the recruitment process too one sided.

You want to make sure you put the shortlist of candidates through their paces and so you set up a half day assessment centre for stage one whereby there is a group interview and some psychometric testing. The problem is that the best candidates are probably only tentatively interested at this stage and unwilling to attend the assessment centre until they know more about the job. Maybe they are not entirely unhappy with their current employer or maybe they have multiple vacancies they are pursuing. Either way, you need to offer a little courtship before sending them to a formal assessment. Set up an initial interview which is as much about you selling the job opportunity and your company as it is assessing the candidate. Only when you have them excited about what you have to offer can you expect them to take half a days holiday and go through rigorous testing.

8. Communicate promptly with candidates following interview.

Candidates assume no news is bad news. A delay of more than 48 hours will mean positive momentum will begin to drain away as will the candidates interest in the job. Going back to the strongest candidate quickly maintains the impetus and increases your chances of a job offer being accepted.

But don’t forget the candidates who you are discounting from the process. Dealing with them professionally creates good PR for your company as an employer and you may want to go back to them for a different position at a later date.

9. Take in to account the detail of fringe benefits when making a job offer.

Generally both hiring manager and candidate will focus on basic salary when pitching their expectations on package but a failure to dig in to the detail of the benefits package may come back to haunt you. Corporate employment benefits include some or all of the following: car allowance, bonus, private medical insurance, life assurance, pension, discounts, vouchers, share options and signing on bonuses. You might be improving the candidates basic salary with your job offer but lowering their overall package. You need to gather this information early on to understand if you can make them a compelling financial offer.

10. Manage expectations on timing of the offer letter.

If you have verbally offered the position and got a verbal acceptance in return you need to sort out the paperwork. Often someone else needs to sign the authority to recruit and may not be immediately available. Then the authority needs to go to HR to put together a benefits pack and then post out the contract and offer. If this is the case make sure you tell the candidate that the offer letter wouldn’t be with them for ten days and stay in touch until they have the contract in their hand.

The strengths and weaknesses of typical recruitment models

Blog - Strengths and weaknesses of recruitment models

Organisations that take recruitment for granted or treat it as a ‘transactional process’ only (as many in Procurement and HR do) risk a serious impact to their reputation with candidates and their ability to recruit the best people in the market.

A major issue is that many of the current recruitment models and processes were implemented as a result of the market conditions during the last recession. The recruitment market has since bounced back strongly and particularly for specialist roles. Those models designed around success metrics such as cost or time per hire only have significant weaknesses when organisations need to source ‘non-core’ roles.

Recruitment is in theory a simple process but unfortunately this ignores the fact that people are not a commodity or a product and in reality, people make recruitment very complex. Why? Often we find that emotions, opinions, views and impressions often count for more than concrete facts and figures and people’s reactions can be impossible to predict fully.

However, there are a few basics that make the process run smoothly:

  • Is the role budgeted and is the headcount approved and signed off and agreed with Finance and HR?
  • Is it clear and agreed what the specification really is? Do we know what we want? The lack of a clear specification or disagreement between key stakeholders about the skills, competencies and knowledge needed often wastes considerable time and effort.
  • Crucially – Is this specification realistic in the market? Are the levels of skills and experience really available externally at that salary range in that geographical area?

Hiring problems and delays typically arise if these are not in place as ultimately the specification or salary or location has to change further down the process with a host of unforeseen consequences.

 The typical recruitment models

Organisations typically source using one of the following main routes or models.

Internal recruitment (within the organisation) via:

  • advertising (intranet / bulletin)
  • internal promotions or secondments

External recruitment via:

  • Outsourcing provider
  • In-house recruitment team
  • multi-agency PSL
  • Single source contingency
  • Retained search

Each of these has strengths and weaknesses and deciding which model to use is often based on historical decisions which may not match the current circumstances.

The challenge is that often organisations try to find a one-size fits all approach and this is inherently an approach that is doomed to failure and here we critique each of the main recruitment models.

Internal recruitment

Our focus for this article is on external resourcing however in many organisations the bulk of vacancies are actually filled internally but the internal process needs to be integrated effectively with the external process to avoid delays or confusion.

Organisations typically will look externally even if there are potential internal candidates to understand if this will bring greater capability or potential or the ‘fresh look’ needed to drive a change programme.

Organisations need to consider carefully the following options

  • Running internal recruitment first – but this risks a lengthy overall process to subsequently find good external people.
  • Running internal and external recruitment together – this can work well but needs clear communication or candidates may feel they were messed around.
  • Recruit externally only – this needs to be carefully communicated so internal people are not demotivated or leave due to ‘lack of opportunities’

External recruitment

There are a variety of different solutions and they all have strengths and weaknesses – most work well in certain contexts but most fail as a ‘one size fits all’ approach rarely succeed in certain situations

Outsourcing provider

Many larger PLC’s utilised or expanded this model during the recessionary market as a key business driver was to contain costs via a transactional recruitment model similar to other outsourcing solutions.

As the market has changed many are now reflecting historic conditions. Indeed, the overall trend in outsourcing is now towards integrated and sustainable business solutions. Stakeholders are challenging the focus on the traditional strengths of recruitment outsourcing such as time or cost per hire and are looking for greater value and engagement from the resourcing model.

Outsourcing has been a great success in delivering volume hires at reduced cost and greater speed. Often however the overall statistics mask poorer results when sourcing for niche, specialist and senior roles or where there is finite supply of suitable candidates.

Typically, some or all of the recruitment team is relocated to lower cost locations but has proven to cause communication and engagement problems with candidates and stakeholders. Increasingly as other labour markets mature the pricing is not as compelling as it once was.

Often the outsourcer manages third party agencies for the client (at reduced rates). This makes sense commercially but exacerbates the transactional volume led approach perceived by candidates. Agencies have roles briefed via a portal with little or no understanding or engagement with the the client.

To summarise; outsourcing often works well for volume roles but is less effective for specialist and senior roles and can create a lack of engagement between the organisation and its own hiring managers and potential candidates

In-house team

In house recruitment teams historically have managed internal recruitment as well as sourcing externally via advertising, word of mouth or via agencies. They were often very successful particularly in well known local or national brands and could source hundreds (or thousands) of applicants through advertising. Their challenge was often more around dealing with fluctuations of demand and volumes of applicants.

However LinkedIn and social media have changed this landscape and allowed in-house teams to appear be more proactive but instead of one advert they now must source on LinkedIn, Facebook, Twitter Job Boards, sector publications, referrals as well as press adverts, agencies etc.

Many in-house teams grew just to deal with this massive increase in transactions and hence why many outsourced as they struggled to deal with all the conflicting priorities and the changing recruitment volumes. They often could not increase or decrease headcount as rapidly as needed.

This is also exacerbated as many are spending a significantly increasing proportion of their time with internal stakeholders or in internal meetings leaving little time to find or talk to candidates forcing a transactional approach.

This is exacerbated in SME’s as Recruiters struggle with changing or high volumes and with the knowledge needed when recruiting a wide range of job types. Typically, their focus is on operational / client facing roles and recruitment into support functions such as procurement suffers.

Many do recruit 80-90% of candidates directly (and in reality, this was often the case historically) but with a much bigger team now to do so. Critically the 10-20% filled via agencies are mainly specialist or senior roles. Very few in-house team are successful or effective at all roles at all levels.

The best recognise this and focus on volume or business critical roles and build good partnership based relationships with agencies in non-core or specialist areas to ensure they secure the best talent.

Some however try to recruit every role directly often using strict processes and sign offs to maintain a rigid control and consequently spread themselves too thinly or recruit where they have no real market knowledge or know what good experience looks like. Bulk sourcing techniques using inmails on LinkedIn often impacts negatively on brand and reputation and typically only attracts those active in the job market.

In summary in house teams can work well particularly in large volume driven organisation but again tend to be much less effective at recruiting for support functions or for specialist and senior roles.

Multi agency PSL / master vendor

This is one of the oldest recruitment models and often outsourcing or in-house team’s models in effect are just different ways of delivering a multi agency PSL or master vend model.

As with outsourcing the model is often based on size, scale and cost criteria and so typically larger recruitment businesses are appointed as they superficially appear to be more able to deliver more roles across more locations. Some of the more advanced examples do allow for niche or specialist recruiters.

Again for volume roles the model often works very well giving a small number of sources of supply with a high chance of success but again fail to adequately deal with specialist or senior requirements. A major weakness of this model is that multiple agencies can make multiple approaches leading to confusion and fights over ‘candidate ownership’.

Another unintended consequence is that commercially most agencies will focus more effort on exclusive roles but when they are one of three or four competing to fill the same role they will not put as much effort in as their chance of success and a commercial return is lower. This is less of a problem for multiple position roles but multi briefing of single roles actually diminishes the speed of response and the calibre of candidate found as each agency is only doing the minimum.

Successful PSLs are those that build in variation and specialism and allow a flexing of fee rate for certain roles.

Single source contingency

Typically used for non-core or specialist roles or increasingly at more senior levels where once it was retained work only. The advantage is that a client gets access to the network and knowledge of a specialist recruiter and should get an improved quality of candidate. The disadvantage can be the many agency interactions required across the organisation if all roles are sourced this way.

A big stumbling point is ensuring the recruitment business is a genuine specialist who really knows the niche market as many are not. A genuine sector specialist should be able to advise up-front on the skills and salaries in the market and provide a good quality shortlist quickly and know who the better performers are available.

Typically, if both parties invest time in the relationship and the brief is clear and the right partner used then the client has a relatively low risk route to source good candidates quickly and effectively.

This model works best if communication is open and there is genuine trust between both parties. Use of a genuine specialist ensures quick access to the best candidates and not just those who are looking right now.

The weakness of the contingency approach is two-fold and based around trust and openness

  • Will the agency commit? Their risk is that they can put a lot of work in and the role can be cancelled or changed or sourced directly or briefed to another agency. The client needs to be up-front on these issues.
  • Will the client commit? If the client does not invest enough time and respond promptly as the process progresses the recruiter becomes disengaged.

Retained search

This has been the realm of the Executive Search businesses at Board or ‘direct report to board’ levels or c. £150k and above or even used at lower levels when there is a critical need

In fact, in recent years this approach is more common in some niche sectors where the market is highly candidate driven. Increasingly, it is not retainer fee led but a variation to cover research or search list fee to ensure an up-front commitment from both sides.

Again, clients must ensure that the recruiter is a genuine specialist and more importantly that they are actually undertaking a search to find people and not just using their database.

Traditionally this model has worked well but the process can seem long especially if the firm starts every search from scratch. A number of more nimble and faster players now exist who challenge this and by being true specialists in a discipline or business sector know many of the key players and use their sector knowledge to source quickly as well as ‘searching’. Clients pay for knowledge and network and not the time of a long drawn out search.

Points to consider in conclusion

  • Many of the models typically used by many organisations to recruit were implemented in a recession based market and worked as in most sectors there were fewer open vacancies and it was easier to get good candidates to ‘apply’.
  • The market is now increasingly candidate driven and relies heavily on social media. However increasingly people expect to be treated well and not as a commodity and good candidates know they are in demand and work to their timescales and priorities and not to a model or a KPI.
  • The procurement process for many of these models has often focused on cost, volume and geographical coverage and breadth rather than market knowledge, approach and genuine capability, resulting in a typically transactional approach to recruitment
  • Organisations as well as recruiters need to do more get the attention of top quality candidates and what is increasingly making a difference is a focus on what are almost traditional values but in a modern context ie networking, reputation, use of multiple channels and increasingly delivering a more personalised service particularly for more senior or specialist roles

If any of the issues raised in this article are of interest to you and you would like further information, please get in touch with Peter via peter@edburydaley.com.