Companies are finding it attractive to shift to an outsourced recruitment process due to a lot of reasons. Here, we try to break it down to the 5 most important reasons. But first, what does an outsourcing recruitment process mean? This is when a company would hire an external service provider to handle part or all of the recruiting efforts. Both Philippines based and overseas companies use these.
These recruitment efforts often involve handling of sourcing, screening, hiring, methodologies, managing, reporting, creation and enforcement of all employee handbook and paperworks. Service providers such as Springboard Philippines, assume ownership of the recruitment process and take responsibility for the results.
Why do companies outsource recruitment services?
1. Urgent Requirements with Rapid Growth
Oftentimes, businesses in the Philippines have an unexpected increase in their hiring requirements. This could be due to a sudden business unit expansion and an additional seasonal account to name a few. For example, BPOs are familiar with the sudden increase in hiring demand due to seasonal accounts. During times like these, even having a HR department in the company won’t be enough to fulfil the demand. These unplanned increase in business operations might also catch a company’s HR Team off guard. Some businesses might not even have a dedicated Recruitment Team to handle multiple hiring ramp-ups simultaneously. Outsourcing most of the recruitment process to firms who are doing round the year recruitment is the correct move. Chances are, they have similar talent pool in their pipeline for other client companies.
2. New Market Entrant
Companies entering the Philippines or any new market for the first time might find that they need to study, analyze and account for a lot of variables to be able to run their business successfully. This is especially true for foreign companies that choose to incorporate in the Philippines. They have to outsource several things like business permits processing, taxes and recruitment. Weighing on the cost-benefit analysis of starting everything from scratch might not make a good business case in terms of time, resources, risk and expertise. Most of these new entrants use a good Recruitment Process Outsourcing firm for recruitment to help them set-up the foundations of hiring a good team. A good business practice for new market entrants as well is they can use existing job portals like Worky.ph as a research tool to see if there are companies that are hiring for the same talent pool and to identify existing talent base to hire. Some job portals even have a salary comparison tool wherein they can benchmark salaries according to job titles and positions. All of these activities can be covered by a good outsourcing recruitment partner. It can also help save the time effort of new businesses so that they can focus on their core operations.
3. Leverage on Experience and Expertise
Recruitment Process Outsourcing (RPO) firms that have tenure will have the wealth of experience to advise and consult companies who are just starting their firms. Smaller firms can actually leverage on using RPO firms even though they might have to pay a premium upfront to be able to hire talents that might normally consider them within their application first-choices. A good outsourcing partner can sell a small company to a candidate with credibility since it is already tenured. A company’s HR personnel might not have the bandwidth to adapt quickly to the times as opposed to a recruitment process outsourcing firm who lives and breathes different requirements of different clientele and may utilize the wealth of experience built over the years and several industries and apply it purposefully to the client. They know the most efficient way to place a qualified candidate in a shortest amount of time. With that said, their experience in the recruitment landscape may involve, for example, knowledge on what job portal to use for a Full-stack Developer requirement, how to write an attractive and winning job description to get the best candidate and result, or use a job portal that has advance matching capabilities that can save recruiters time to filter unqualified candidate etc., Some RPO companies even have discounted rates from job portals since they are long-time customers. It’s not uncommon for recruitment companies to have 1 to two year contracts with job portals and advertisement providers which is not accessible to regular companies. RPO firms are also great in persuasion. They can help you communicate with the candidate of your choice regarding the pay or salary.
4. Reduce Long Term Costs
Hiring a full-time recruiter to fill-in recruitment needs of a company will always start out as a more affordable option. But in the long run, this can make a company incur more administrative expenses. Expenses such as additional headcount accompanied by paying salary increases, getting job advertisements, subscribing to job portal packages for resume searches, communications expenses are inevitable. As mentioned in the previous section, recruitment process outsourcing firms usually have good and long-standing relationships with job portals and job platform providers since they are considered more of partners for hiring. Charging and pricing packages are different and are usually pegged at the lowest and at its most competitive for long-time customers. Overall, this translates to lower hiring costs for a recruitment company which they can pass on the savings to their client companies.
5. Time-to-hire and economies of scale
Time-to-hire depends on several factors. It can range from two weeks to two months depending on the complexity of the job and its requirements. Most of the time spent in the recruitment process might be from the client’s stringent requirements. Passing the background check, fit-to-work health checks and credit checks are some examples. These usually comprise of 5 working days to accomplish. The recruitment and interview process itself might just be a one day process. Most RPO firms maintain a mix of different sourcing channels. Because of this, its marketing spend would inevitably be spread across related, overlapping and multiple job requisitions that are similar. In short, as the clientele list of the RPO company grows, its delivery service gets quicker and cheaper.
Worlwide data really shows that more and more companies are willing to outsource in recruitment services for several reasons. If you are having problems filling a certain role in your company, feel free to contact Springboard Philippines for a free quote on how we can help.
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By: Tristan Archie Ong
Managing Partner, Springboard Philippines
Managing Partner, Worky.PH