Recruitment freezes cause "anarchy" and cost blow-outs
20 March 2009 8:22am
Employers that enforce hiring freezes during a downturn run the risk of anarchic recruitment systems and their costs spiralling out of control, says HR expert Steven Dahl.
Dahl, the founder and managing director of HR solutions provider Onetest, says it's a "myth" that recruitment freezes protect an organisation from escalating recruitment costs.
"We have to remember and be realistic that even in a recession, people get sick, they have to leave work, they move interstate... Even during a freeze, organisations will be recruiting. The volume of the recruitment might not be as high as it has been in past years, but the critical roles will still need to be re-hired.
"Turnover will still occur even in a recession. When recruitment processes are put on ice, recruitment becomes ad hoc and inconsistent, [leading to] 'recruitment anarchy'."
In a webinar this week, he explained how during a time when HR teams might be downsizing or "busy trying to do more with less", normal recruitment processes are put on ice. When a line manager needs to fill a business-critical role - quickly - they will bypass HR and send the job to an external agency rather than be "inundated" with applications, resulting in a cost between $10,000 and $15,000 (depending on the salary).
"Before too long other managers are following suit and... even though they were in the midst of a recruitment freeze designed to save money and cut costs, have ended up spending several hundred thousand dollars, just in replacement recruitment."
Now is not the time to let recruitment systems and processes slip, Dahl says. "We know that ad hoc rec ultimately leads to higher costs and greater variability of people that we bring into the organisation.
"We also know from life experience that processes that are more consistent deliver results... And when processes aren't clearly defined, and we have people who are busy, stressed or time-poor, they tend to do their own thing, and when they do their own thing they tend not to do it particularly well."
An employer can "end up with as many different selection processes as they have line mangers recruiting, and this isn't a good thing. If an organisation has right-sized or downsized or retrenched workers over the last six months, as we come out of this recession it has an enormous opportunity to actually recruit or refill its stocks of employees with more of the right people."
Applications influx an opportunity, not a challenge
Dahl says that while some employers are now shutting down the recruitment pages of their websites due to overwhelming numbers of job applications, this is not the right strategy.
Instead, they should set up online systems to capture all the applications and create a "talent pool" for future recruitment needs.
"What we should be looking at doing is opening it up and getting as many applicants in as we possibly can, registering their interest for future job opportunities, and building that talent pool of five-, ten-, fifteen-thousand candidates which can be accessed for future recruitment needs.
"I can only stress too much to organisations that they don't turn their back on collecting applications during what I know is a very tough time for business. Whilst you might not be recruiting as feverishly as you were in the last 12 months, you will need to recruit replacement roles; we will come out of the recession and when we do, and you need to recruit more people, this is a great low-cost way to tap in and get access to your very own ready-made talent pool.
"Building your talent pool is going to give you a huge commercial advantage over your competitors. It's going to help you to fill roles faster, and significantly bring down your recruitment cost per hire."
Keep the pool "warm"
Dahl warns that "talent pools do 'go off'" so employers must ensure they stay in touch with the database on a regular basis.
"Send notifications about what's happening in the organisation about new roles and opportunities that are coming up. You still need to communicate and engage with your talent pool to keep them interested, live and active. A good opportunity will always tempt or entice a jobseeker to take another look, so keep them warm and keep them engaged."
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