Recruitment leaders must think of the bigger picture and look at how they can remove and reduce recruitment costs in a downturn, write Tim Way and Gareth Flynn
Cleanse your candidate database; build talent profiles; train
your team and hiring managers; develop sourcing strategies;
provide market intelligence; review supply chain; provide
career management services; update your internet and intranet
pages, and so on and so forth.
Sound familiar? These are some of the suggestions pro
posed in a number of recent articles that discuss how to
best utilise existing capacity in internal recruitment teams
as a result of the current economic climate. These same arti
cles advocate this as the ideal time to continue investment
in your corporate recruitment function to position your
organisation to be first out of the blocks when the market
The rationale for this “invest now, benefit later” strategy is
generally sound and it is arguably one of the considerations
executives make when considering where to reduce, or suspend,
expenditure and where to continue with investment.
However, the consistent theme running through many such
articles is that they review and advocate the value of one par
ticular business function – recruitment – in isolation from the
remainder of the organisation. The reality is that no business
will review the value of a certain function in isolation, so lead
ers need to exercise caution in borrowing and/or delivering
these value statements and alternative activity ideas as a defen
sive mechanism against pending change.
While these suggested tasks may result in short-term pressure
release and demonstrate activity; they may be the wrong thing for
the organisation longer term and may simply delay the inevitable
and rational decision to reduce investment. Cost-to-income ratios
are an important metric for companies and can influence share
price and market confidence. If revenues are falling, costs will
have to follow.
Recruitment’s bottom line
A credible corporate recruitment function has the ability to
influence the bottom line in two key areas. The first of these is
revenue (by attracting and hiring the best talent in the market)
and the second is cost control/reduction (by removing and
reducing recruitment and associated costs from the business).
During a downturn the ability of a corporate recruitment
function to positively influence revenue falls considerably, with
hiring in the short-to-mid-term likely to be suspended or scaled
back. However, there remains a real opportunity to remove
and reduce recruitment costs and associated overheads from
the business and it is here that recruitment leaders have a great
opportunity to contribute.
Business and HR executives will make
decisions on how – and where – within the
business to reduce cost. Some continued
investment in R&D and product develop
ment, retention of key sales people/chan
nels and growth in emerging markets, for
example, will feature highly above any
credible case for retaining the corporate
recruitment function in its current form.
Only by taking action now to create a
lean and highly efficient corporate recruit
ment function will you truly position it to
deliver mid-to-long-term value when mar
ket confidence recovers. Even with future
growth your costs should remain much
lower than the “as is” model. This means
that in future more revenue, when gener
ated, will make its way to the bottom line.
Real recruitment value
Were you to approach your boss and say
“I believe there are ways we can reduce
corporate overheads in the recruitment
function whilst retaining access to a cred
ible, cost-effective service” I guarantee
he/she will say “I’m listening”; and they
might also add “and I’m glad you’ve
come to me before I came to you”.
It is human nature to want to protect
yourself and your team, especially after
you have invested so much in its devel
opment. However if you are able to
review your function’s real value during
a downturn, in relation to the broader
organisational objectives, you will demon
strate that you really understand, and are
thinking about, some of the wider busi
ness challenges your company faces.
It also promotes you as the type of
leader who can identify the need for, and
potentially manage, difficult change
which is a capability and attribute far
more likely to be retained and deployed
elsewhere in your organisation.
Tim Way and Gareth Flynn aredirectors of TalentQuest