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FULFILLING TALENT OBJECTIVES IN HIGH ORGANIC-GROWTH MIDDLE MARKET COMPANIES

Mass Recruitment Speed, Efficiency and Success

May 2015

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In such organizations, the task is to successfully recruit a substantial number of employees in a very short timeframe. The company may be launching a new product, entering a new market, building a new facility or extending its sales and operations into new geographic regions. Speed is of the essence to seize the business opportunity, yet it must not detract from the ability to secure top skill sets.

Such hastened talent demands often are beyond the capacity of a midmarket company’s HR and/or talent acquisition teams to handle effectively. For HR, in particular, workforce expansion requires adding high volume recruiting activity to a burgeoning workload, much of it focused on the successful on-boarding of new talent and the continued support of incumbent staff. It is additive work—not shifted work—because core HR activities cannot be deferred during the growth period.

The consequences of these pressures can be significant. If scurrying to fill employment

ranks, poor hiring decisions may be made. By slowing down to carefully consider job candidates, the launch deadline may be missed.

This report underscores the need for middle market companies (organizations with between 1,000 and 10,000 employees) to strongly consider the consultative and transactional services value of RPO when in high organic-growth mode.

According to NelsonHall, a leading outsourcing analysis firm, recruitment process outsourcing will have a compound annual average growth rate (CAAGR) of 15.4% between 2014 to 2019. In the firm’s Targeting Recruitment Process Outsourcing 2015

INTRODUCTION

Few talent acquisition endeavors are as high stakes as those within a company in high organic-growth mode.

report, NelsonHall states, “RPO continues to be the fastest growing HRO service, doubling by 2019,” and the “U.S. and U.K. RPO markets will continue to dominate as talent demand for skills intensifies with aging workforces.”

Why is RPO such a thriving service? The answer is it can directly contribute to the achievement of strategic growth initiatives and other goals by aligning HR functions in these efforts, while also improving efficiencies, such as cost-per-hire and time-to-fill.

We hope this report helps you attain your immediate and long-term growth objectives through a highly effective workforce demand planning approach.

RPO continues to be the fastest growing HRO service, doubling by 2019.

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MIDDLE MARKET: FAST GROWTH NOW

77% of Middle-Market respondents ranked the “ability to attract, train and retain talent” as one of their top five business challenges.

According to a 2015 survey of 1,000 U.S. midmarket companies by the National Center for the Middle Market, the overall revenue of these organizations increased 7.2 percent in 2014, compared to 4.9 percent for the S&P 500 over the same period. Buoyed by rising confidence in both the global and national economies, nearly three-quarters of the survey respondents (68 percent) plan to invest their capital in growth opportunities in 2015.

As midmarket companies grow organically, operational capacity must increase, requiring more talent, better talent or both. Not surprisingly, year-over-year employment growth in the middle market doubled from 2013 to 2014. Overall employment growth among the survey respondents averaged 5.0 percent in 2014 and is expected to continue at a 4.0 percent rate of growth in 2015.

As the companies in the survey sought to secure additional talent to support their growth initiatives, more than half (51 percent) acknowledged that they had struggled to fill this skills gap. Additionally, 77 percent of respondents ranked the “ability to attract, train and retain talent” as one of their top five business challenges.

In this era of fast-paced business decisions and rapid change, the failure to quickly enter a new geographic territory, for instance, can result in a competitor getting their first. In such cases, the company with the most agile recruitment capabilities will win.

Many middle market companies are experiencing fast growth, both organically and through acquisitions. Having exercised caution in the first decade of the 21st century, midmarket businesses are expanding services and bridging new geographic territories.

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Typical Talent Challenges ForHigh Growth, Mid-Market Companies

HR Lacks Defined Strategy

Bottom Up HR Strategy

Use Data & Analytics To Position HR As Revenue-Impact Dept.

Enlist Senior-Management For Top-Down Approach

MACRO ISSUE RESOLUTION

Weak Employer Brand and EVP

HR Expected to Be “Jack Of All Trades”

Seeking Talent That Does Not Exist

Stuck In The “Top Candidate” Trap

Create Programs To Boost Hiring & Retention

Find Partner For Advanced Sourcing, Recruiting Processes & Tools

Get Access To Current Talent Pools, Comp Rates & Job Descriptions

Identify True Top Talent With Compentency Profiles

TALENT-SPECIFIC ISSUE RESOLUTION

HR Lack of Time and Resources

HR Not Always Privy To Large Project Plans

Changing Project Needs and “Surprises”

Allow HR to Focus On Strategy & Find Partner For Large Projects

Engage Key Stakeholders In Workforce Planning

Access A Nimble Team That Can Scale & Pivot Quickly

HIGH VOLUME PROJECT SPECIFIC ISSUE RESOLUTION

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PLANNING THE SCOPE OF HIRING

As middle market companies evaluate short- and longer-term organic growth options, they must consider the talent needed for these plans to succeed.

In today’s talent-based economy, workforce demand planning is vital to the success of a company’s organic growth plans, but all too often companies don’t have the discipline, the time or the internal skill set to conduct proper workforce planning.

While HR leaders will attest to the importance of proper advance workforce planning, many are not privy to their companies’ growth plans until

they are in play. Suddenly, they must recruit and hire a great number of skill sets in a very short timeframe. An HR/talent acquisition staff accustomed to handling a handful of hires a year is now faced with hiring exponentially more people, often in new and varied positions. Unable to meet the demand, they risk workforce gaps impeding the business intent of the strategic growth initiative. If they stumble, the growth initiative may fail to achieve the strategic intent.

Meanwhile, the CEO is focused on expanding the business—not talent planning. This puts the onus on HR/talent acquisition to strategically determine the different skill sets and overall employee volume needed to fulfill the growth objective. Then, they must handle all the transactional elements of recruiting, including interviewing and onboarding the new employees.

HR could (and should) outsource the workforce demand planning and transactional elements, and

identify key areas where they can engage with an RPO partner, but many midsize company HR leaders, in addition to their CEOs, have little experience leveraging this third party model. They also may consider an out-sourced recruitment provider as a mere implementer of tactical needs no different than hiring an employment agency. Many are unaware of the tremendous upside potential of an RPO strategic alliance buoyed by senior leadership support.

In today’s talent-based economy, workforce demand planning is vital to the success of a company’s organic growth plans, but all too often companies don’t have the discipline, the time or the internal skill set to conduct proper workforce planning.

Want To Transform?Create a Plan & Work The Plan

“(In) organizations that took a rigorous, action-oriented approach and completed their transformations (all initiatives had been fully implemented), executives report a 79 percent success rate—three times the average for all transformations… No single action explains the difference; in fact, the more actions an organization takes, the more likely its transformation is to succeed.”

McKinsey & Company, “How to Beat the Transformation Odds,” April 2015

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HR doesn’t have the bandwidth to set aside their current responsibilities and focus on recruitment

Workforce and demand planning are not specific functions of the firm

Your business line hiring managers have never been trained on proper interviewing skills

No formal employer branding programs or employee value propositions are in place

The attributes of your company’s top performers have never been documented

You lack internal experience with advanced sourcing techniques and talent communities

Other responsibilities preclude HR from keeping current on recruitment tools, trends and salary market rates

No formal process exists for comparing competitive data such as salary, compensation and benefits

You lack a defined recruiting process complete with prescribed actions, procedures and participants

9 Warning Signs Your Company Is Unprepared For Large Project Growth

Your mid-market company is growing fast. HR has scrambled to put in the proper training and benefits programs. Now you’re expanding into a new market or launching that new product. You’ll need 50+ hires quickly. Is it realistic to assume your HR team can pivot into a lean-and-mean recruitment machine? Here are some hints that they may not be prepared:

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TALENT MARKET AND SALARY MISPERCEPTIONS

Coming out of the recession, misperceptions persist about talent availability.

Simply posting a role to a job board to generate qualified candidates isn’t as effective anymore, yet some hiring managers hold onto the image of yesterday’s candidate landscape of eager job seekers at every turn. They are bewildered to find skills shortages and the need for advanced sourcing strategies and condensed time-to-offer metrics to secure desirable candidates.

Just as HR professionals have access to unprecedented social data about candidates, the reverse is also true. Candidates can obtain company information, employee reviews and customer feedback that were inaccessible not long ago, underpinning the importance of a strong employer brand.

Another byproduct of the recession: long-tenured employees who juggle multiple roles. The employee may have started in one role, but over time and staff cuts, the role has expanded to include multiple functions typically performed by others. When the need arises to replace these employees, a skewed perception on what to expect may translate into time wasted searching for candidates that simply do not exist.

Compensation packages are now multifaceted and competitive. This may be a hurdle, as burdened HR teams do not have the right data or the capacity to properly price the required skills in the relevant labor pools. It is common for organizations to ignore the supply and demand

dynamics of the labor market and underestimate the compensation requirements of targeted candidates. Compensation “equity” is confused with “equality,” with skills “selling” at today’s market price, not at the rate of the existing team hired five years ago.

An RPO provider flush with clients is a fountain of knowledge for current market compensation rates. Unlike agencies, RPO fees are rarely if ever based on starting salaries, so the market-rate data is unencumbered by competing priorities.

Some hiring managers hold onto the image of yesterday’s candidate landscape.

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HR managers also must avoid the “top performer” trap. Everyone wants top performers and seeks the stereotypical profile: a pedigree that includes the best schools and a resume peppered with tenures at top consumer brands. This is not an accurate depiction of what constitutes a topnotch performer for every organization, however.

RPO providers can undertake competency profiling of existing star performers, creating recruitment efficiencies crucial to companies

“Top Performer Trap”

“Talent Availability”

“Skills Gap”“Role Scope Creep”

“Compensation Equity vs. Equality”

“Defining Star Performers”

“No Employer Brand”“Solely Relying On Job Boards”

in high-growth mode. Often, these profiles lead to the best hiring outcomes. To do this internally, HR leaders must be able to assess if the organization has clearly defined career paths, know how to manage top performers and develop programs that deliver on employer brand promises. If this is not the case, HR risks trading the challenge of hiring top performers for one of retaining top performers.

Everyone wants top performers and seeks the stereotypical profile: a pedigree that includes the best schools and a resume peppered with tenures at top consumer brands.

COMMON TALENT OBSTACLES

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8 Signs You’re Stuck in a Talent Time WarpJust because the economy has rebounded from the Great Recession doesn’t mean that your talent mentality has also rebounded.

TALENT, TALENT EVERYWHEREEveryone needs a job, so hiring the best should be fast and easy. Wrong. During the Recession great candidates may have seemed like they were growing on trees, but not anymore. Today professional-level candidates have more options and opportunities, and recruiters need advanced sourcing techniques and impressive employer brands to find and attract them to the company.

NO RUSH MAKING AN OFFERSome still believe they’ve got all the time in the world for interviews and making offers. Not so. If you are interviewing a candidate, it’s likely he/she is interviewing with other companies.

ONE EMPLOYEE WILL GLADLY DO THE WORK OF THREEThe 10-year veteran employee who accumulated multiple jobs along the way has left the firm. Just create the replacement’s job description based on that person’s final responsibilities. Nope. Because one employee weathered job scope creep doesn’t mean you’ll find a pool of others with the same abilities. Base job descriptions on realistic expectations or you’ll waste valuable time looking for candidates that do not exist.

WE DICTATE COMPENSATION NOT THE MARKETThe market dictates current compensation rates, and it’s not based on what’s “fair” compared to your other employees. Just because the last three people hired five years ago make X doesn’t mean that it aligns with today’s expectations. Unrealistic compensation offerings make recruitment an uphill climb.

WHAT SKILLS SHORTAGE?When it comes to STEM careers there simply aren’t enough candidates to go around. Deliberate employer branding programs, attractive employee value propositions and creative sourcing are what it takes to snag these candidates before your competitors.

TOP PERFORMERS ARE THE SAME EVERYWHERETop schools. Yes. Admired consumer brands on the resume. Excellent. That’s what everyone looks for in a top candidate, but it doesn’t mean that these candidate types will perform well in your cultural environment. Create competency profiles based on living-and-breathing top performers in your organization, and use them when searching for candidates. It will make recruitment easier, and you’ll get better results in the end.

WHAT EMPLOYER REPUTATION?Access to unprecedented amounts of social data isn’t just a one-way street. Candidates can view previously unimaginable levels of company information, employee reviews and customer feedback. Recruiting efforts will lag for those companies that do not deliberately create an appealing employer brand.

EMPLOYEES WON’TDARE LEAVEEmployees no longer count their lucky stars just to be employed. You’ve got to make it worth their while. What’s your employee value proposition? What career paths are offered? How do your compensation packages compare with competitors? Ignore these questions at your own peril.

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THE IMPACT OF CHANGE

Midmarket companies tend to move fast. When an opportunity presents, the business must be aggressive.

Consequently, the frenetic demands to screen 500 candidates, pare this group down to 200 individuals and ultimately recruit 50 people within six months create chaos and confusion. RPO brings process by mapping out the required activities of all participants, including hiring managers. A thoughtful plan makes an organization more deliberate. The competent RPO provider asks prudent questions such as: Is it reasonable for managers to devote 80 hours per week to interviewing? How will the company onboard 250 people at once? Do ample work space and equipment exist for the new hires? Astute questions that business leaders ordinarily do not consider forces a better plan and fosters stakeholder commitment early in the program.

Another daunting challenge for HR is managing the impact

of the workforce expansion on current employees. Legacy employees must not feel threatened by the influx of so many new people. HR also must ensure that the new hires are aligned with the existing culture—the self-sustaining pattern of behaviors, thoughts, feelings and a mindset within the organization.

A cohesive culture is arguably the most important factor to running a successful enterprise. For it to truly provide value, companies need to hinge the RPO effort to their employment brands. This is a top-down endeavor, requiring legitimate executive sponsorship and support. A strong employer brand assists recruitment objectives, while a negative employer brand is a serious handicap to successful hiring. A purposeful employer brand generates feelings of meaningful work and engagement among

employees whose loyalty and word of mouth guide other talented individuals to the business. These varied cultural traits ultimately combine to differentiate a company from its competitors, generating profitable business results.

In many organizations, HR is built for the business the company was in, rather than the business it will be in. In such cases, the consultative and transactional benefits of RPO must be carefully weighed and considered.

In many organizations, HR is built for the business the company was in, rather than the business it will be in.

To Manage The Impact of ChangeAlign New Hires With The Company Culture

Maintain A Consistent, Authentic and Appealing Employer Brand

Manage The Workforce Expansion Effects On Current Employees

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RPO TO THE RESCUE

If a midmarket company plans rapid expansion, RPO is a “plug and play” alternative to drive cost and time efficiencies and consistent quality of hire.

The good RPO partner brings deep expertise to the challenge and works with HR, talent acquisition and hiring managers to realize superior workforce demand planning, project management and delivery. The provider can discern talent types and volumes, clarifying and mapping out how many skill sets are needed to achieve desired growth outcomes.

RPO also can help an organization refine and broadcast a powerful employment brand by defining an effective recruitment value proposition to target candidates outside of the firm’s core competency (e.g. why should an accountant join your whiz-bang technology company?). This ensures messaging will be fresh and attractive to a large number of the best job candidates in the shortest period of time.

RPO can further influence an organization’s cultural alignment with the prospective employees needed to transform the growth initiative into a successful enterprise. By

leveraging the provider’s extensive data sets and workforce analytic capabilities, clear and compelling competency profiles and job descriptions drive outreach to the right people with the right skills. RPO also ensures more open communications with existing employees to reduce the potentially adverse impact of the workforce expansion on high performers and even the rank and file. RPO handles the compliance laden and complex transactional elements of mass workforce recruitment. If hundreds of new employees are needed within a few months, the demand can be fulfilled with less risk of a poor skills match, thanks to the use of employment needs analyses, benchmarking

and process standardization. For companies entering new markets and geographies, the provider’s knowledge of local laws and regulations and its boots on the ground globally are an added bonus.

RPO also can support more long-term recruitment and succession planning needs, providing not just the “quick wins” necessary to launch a midmarket company’s growth initiative. Unlike agencies, the RPO has access to internal talent pools making the provider better placed to support talent management and succession initiatives. RPO offers the ability to identify and judge the performance of high-potential employees to fill new positions as they are created or become available.

Certainly, RPO is the surest way for a rapid expansion plan to have the more positive impact on the business. After all, people are the nucleus of an organization, the most important business asset—by far. Finding topnotch employees in great numbers in a short period of time is a task not for the fainthearted.

RPO handles the compliance laden and complex transactional elements of mass workforce recruitment.

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10 Qualities to Seek in a Hiring Partner

Recruitment & Employer Branding Expertise Experienced providers offer extensive research skills, are familiar with cuttIng edge recruitment and sourcing strategies, and can furnish tools and techniques for building a desirable employer brand. They can also build specialty talent pools and communities. 01

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SpeedSkilled RPO providers streamline your recruitment process by creating a simpler, more efficient solution—all while balancing improvements in time-to-fill and maintaining a high quality of hire.

Flexibility & ScalabilityOne of the greatest recruitment challenges is effectively responding to rapid fluctuations in hiring demand. An RPO provider should offer several solution options for scalability and flexibility to minimize your cost and risk as your hiring demand levels vary.

Cost SavingsThe longer a role is left unfilled, the more it costs a business. Placing the wrong hire in a position creates unnecessary turnover. An RPO decreases a company’s cost-per-hire and time-to-fill while enabling HR and hiring managers to focus on high priority responsibilities.

Technology and Data ExpertiseA skilled RPO provider will assist in selecting the best tools and technologies according to your business requirement. They can also analyze and interpret industry and market intelligence, leverage big data for better business decisions and implement automated candidate campaigns.

ComplianceFrom an EEOC, OFCCP and process perspective, your RPO provider must build your hiring system around your goals and objectives. This includes pre-defined Service Level Agreements (SLAs) complete with a governance model to safeguard expected program results.

High-Touch, Consultative ApproachA premium RPO partner provides white-glove service to both hiring managers and candidates. For hiring managers, this means offering strategic planning and ongoing reporting and measurement. For candidates, it translates into an exceptional hiring process experience.

Customized SolutionMany large recruitment companies operate on a one-size-fits all model. They simply plug your company into their RPO model. Be sure your RPO provider can customize the solution to the unique needs of your organization.

Talent Management and Coaching ServicesPremium RPO providers offer value-added talent management and coaching services such as competency profiling and psychometric testing, interview skills training, career and leadership coaching and services to aid with succession planning.

Ability to Reach Beyond Current BordersWhether you operate globally today or have future expansion plans seek an RPO provider who can grow with you globally. Be sure your provider has an on-the-ground, multi-national recruitment presence with local teams that grasp the values, customs and cultures of a location.

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Hudson is a global talent solutions company with expertise in recruitment process outsourcing, retained search, technology recruitment, recruitment consulting and talent management. We help our clients transform their organizations by leveraging our expertise, deep industry and market knowledge, and assessment tools and techniques. Operating in 20 countries through relationships with millions of specialized professionals, we bring an unparalleled ability to match talent with opportunities by assessing, recruiting, developing and engaging the best and brightest people for our clients. We combine broad geographic presence, world-class talent solutions and a tailored, consultative approach to help businesses and professionals achieve higher performance and outstanding results. More information is available at http://us.Hudson.com.

Hudson Global Inc. 1325 Avenue of the Americas

12th FloorNew York, NY 10019

t: (212) 351-7400http://us.hudson.com

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