Outsourcing recruitment is a phrase that, as a SMB owner or leader, probably made you cringe at the dollar signs from what you know of recruiting agencies and recruiting platforms. But what if we could tell that you the old, huge retainers or large bounty models are being put down by newer firms that understand what SMBs need- reasonable prices and no hidden fees. That aside, how do you know when it’s time to outsource your recruitment process?
Here are the top 10 signs that your SMB needs to consider hiring an outside perspective for recruiting:
- Sign 1: The People You Hire are Fired within 6 Months
- Sign 2: The People You Hire Quit within 12 Months
- Sign 3: You Are Losing Candidates “To The Process”
- Sign 4: You are Hiring for More Than 2 Positions
- Sign 5: You are Hiring for Specialized or Technical Role(s)
- Sign 6: You are Spending over 15 Hours/Week Recruiting
- Sign 7: Your Time to Hire is Over 60 Days
- Sign 8: You Lack a Recruiting Message or Employment Brand
- Sign 9: You Only Hire Applicants
- Sign 10: You’re Not Using Technology to Recruit
Let’s start with perhaps the most obvious sign you need recruitment help: most of the people you hire need to be fired pretty quickly.
SIGN 1: THE PEOPLE YOU HIRE ARE FIRED WITHIN 6 MONTHS
Employee turnover, which is the fancy term for the number of people that leave your business (whether fired or quit), is a major cost center for many SMBs. It is especially costly if you are having to fire employees, and fire them quickly after hiring them. This is because the employee likely hadn’t even brought value to the company yet within their first 6 months, so not only do you have the recruiting costs, but you have the costs of training and lost time, plus the liability of firing someone and potentially needing to provide severance or engage an attorney.
Zane Benefits estimates that the cost of employee turnover for even a $10/hour job are over $3,000… and for a salaried, managerial position, you are looking at $20K and more per employee that turns over!
Outsourcing your recruitment process, or even bringing a recruitment expert in to analyze why you are hiring the wrong people, can save you a boatload of money in the long run when you think about employee turnover costs.
But what about if people quit on you constantly?
SIGN 2: THE PEOPLE YOU HIRE QUIT WITHIN 12 MONTHS
The second sign your SMB might want to outsource recruitment is that your employee turnover problem is from people quitting within their first year. Even with the current rampant stereotype that millennials and generation Z are “job jumpers”, the studies show that, if employees are happy, no matter what their age, they will stay with your business.
If you are losing people to other jobs or to burn out within a year’s time, you should certainly be considering outsourcing recruitment, as well as potentially looking for an HR or change management consultant so that you can dig deeper into the true, albeit potentially messy, roots of voluntary turnover.
Want a free 1 hour HR and recruiting consultation from certified HR professionals? Click here!
Another common recruitment problem is that you can’t seem to get to the actual hire.
SIGN 3: YOU ARE LOSING CANDIDATES “TO THE PROCESS”
Whether you are the only one who can do the actual hiring for your company, or if you have a process that takes awhile, if you find you are losing candidates to the length of your process, you should consider outsourcing recruitment. Why? Because recruitment consultants move more quickly than SMBs can and have things like offer letters, background check providers, and more on the ready so that when you find that dream candidate you don’t lose them to another offer, a competitor, or to self-doubt about changing jobs altogether. Recruiters can also be helpful to “keep a candidate warm”, sending them feelers on where else they are looking and what’s going on in their lives so that they can give you insight into how quickly you need to move.
However, it’s hard to move quickly at all at an SMB if:
SIGN 4: YOU ARE HIRING FOR MORE THAN 2 POSITIONS
If you have 1 HR person or if you have a leader who is the HR person plus their role (usually falls to the CEO or CFO) and you also have more than 2 positions open, you should strongly consider outsourcing recruitment. Especially if both of those positions are managerial or salaried roles, that alone can be a 20+ hours/week commitment while those roles are open in order to get the right candidates in the door.
This is when an outsourcing recruitment can be helpful, especially if you contract a company like 4 Point Consulting. When you need 4 Point’s services, you can turn the switch on… and when you don’t, you can turn it off, so that you save money and time, but also get to the hires without overburdening your current HR person or your managers.
This is even more true if:
SIGN 5: YOU ARE HIRING FOR SPECIALIZED OR TECHNICAL ROLE(S)
With talent in technical fields hovering at an estimated zero to 3% unemployment rate (which some have speculated is voluntary unemployment), if your SMB is looking for technical talent or other specialized roles, outsourcing recruitment makes sense in order to save you time, and in order to find the right people since these are not active job seekers.
But wait? Nervous about the whopping 20-40% finders’ fees that many agencies slap you with? Don’t be. Look for an SMB-focused agency like 4 Point Consulting (who charges by the hour with capped maxes or a flat fee that is 10% or less), or consider hiring a contract recruiter as a temp employee at an hourly rate. Try looking on Upwork or other freelancer websites for contract recruiters in this space.
SIGN 6: YOU ARE SPENDING OVER 15 HOURS/WEEK RECRUITING
Similar to signs 4 and 5, if you are spending over 15 hours/week on recruiting, that’s 15 hours per week or more than you aren’t spending on clients, spending on growing your business, spending on doing the things that probably made your business grow enough to recruit. If this happens year round, that is almost 20 weeks of recruiting time. Outsourcing recruitment can get you this time back, which essentially is a part time job (perfect for a recruiter!).
Did we mention also that professional recruiters move faster? So not only might you get this 20 weeks of time back, but a professional recruiter should be able to move around twice the pace of you, plus they can also cut down on time to hire.
SIGN 7: YOUR TIME TO HIRE IS OVER 60 DAYS
Unless you are recruiting for a software engineer or a certain strategic member of the C suite, a SMB should be able to capably hire people in 60 days or less for any position. Managerial roles usually should take around 45 days (2-3 weeks to post/find candidates, 2-3 weeks for interview phases, 1 week for the offer to be accepted); lower level roles should be done in 30 days time. If you outsource your recruitment process, this time can become even more compressed and you can hire even more quickly.
SIGN 8: YOU LACK A RECRUITING MESSAGE OR EMPLOYMENT BRAND
Any good recruiter will tell you that they are, inadvertently, in sales. Which means that every role, every company or client of theirs should have a pitch and a brand. Is the company a tech startup that allows dogs in the office and has Beer Fridays? Is the client a buttoned up investment firm that has the Rolls Royce version of all benefits known to man (but you are going to sleep at the office)? These are recruiting messages that make up an employment brand. Even from these cursory two examples, you are probably picturing the type of person who works at each of those places.
If you just realized that your SMB has no employer brand or recruiting message, this could be a huge part of why you are missing the mark with candidates needing to be fired, quitting, or being lost to other offers. When you outsource your recruitment, the recruiter or agency should work with you to figure out what your message is and what kind of employee you want working for you to create their pitch to candidates… and better yet, not waste your time on applicants or candidates who don’t fit that pitch!
4 Point Consulting takes it a step further; we are a data-driven company and we A/B test messages to our sourced candidates to make sure we make the most of our time working on your positions.
Not sure what sourced candidates are?
SIGN 9: YOU ONLY HIRE APPLICANTS
Speaking of applicants, is that the only pool of people you have time to consider? While there can be some great applicants out there where it’s a right place/right time situation and someone is ready for their next move, recruiters add huge value from sourcing passive candidates. Sourcing is the fancy term for finding passive candidates who may not be actively looking, but whom look like a perfect fit for your role. They usually are the best hires, especially for managerial level roles or above, as they have a strong work history and are actively choosing to come work for you (versus running away from a bad situation).
Here are 4 Point Consulting, we even just do sourcing for some of our clients who prefer to do the outreach and phone screens on their own. You would be amazed what 10, 20, 30 hours of sourcing passive candidates for a profile can do for the quality of your hire and for the cultural match of the candidate to your company!
SIGN 10: YOU’RE NOT USING TECHNOLOGY TO RECRUIT
If you are still waiting for employee referrals and resumes to come to your “firstname.lastname@example.org”… well, we have got to get you into 2017 where technology is the best way (and almost the only way) to effectively recruit. From having a large database of qualified candidates to making sure your job postings actually make it to job boards, outsourcing recruitment can be a sure fire way to get your recruiting process into 2017 and make the most of the technical advantages out there (without you having to deal with setting it all up!).
TO SUM IT UP
Whether you related to 1 or all 10 of these signs, we’d like to invite you for a free 1-hour recruitment process consultation with 4 Point Consulting. SMBs attract passionate talent, from millennials who say believing in the mission of their company is crucial to their happiness to seasoned professionals who are in danger of corporate burn out. Here at 4 Point Consulting, all we work with are SMBs who take care of their people, and the people we hire for them relate to that concept as well.
Just ask us for your free hour and cite this blog post!