Hiring Exchange - A HotGigs blog

Why isn’t your staffing firm a business partner?

• Virtually all companies of any size use contingent workforce to augment full-time staff.
• Companies have lots of opportunities to find and acquire contingent workers—websites, personal contacts, professional referrals…but staffing firms are by far the most common and reliable source.

No manager I know would argue with either of the above statements; they’re common knowledge, no-brainers. But if they’re true, then why is it that so many companies regard (and treat) their staffing firms as anything less than professional business partners?

I’ve worked with a lot of corporations to develop and implement successful contingent workforce strategies, and I think there are two answers to this question:

1. Most corporate hiring managers have been badly burned at least once by a staffing firm feeding frenzy, i.e., firm(s) that act more like sharks than trusted business partners.
2. Corporations think of staffing firms as disposable and interchangeable (because they haven’t made the effort to cultivate a positive, meaningful business relationship with their suppliers).

But developing business partnerships with preferred staffing suppliers can result in many, many benefits to your company:

Hard cost savings. A trusted relationship with preferred staffing firms lets you negotiate and standardize rates across skill categories. The firm will most likely offer “preferred customer” rates, and you may also be able to negotiate volume and early pay discounts.

Soft cost savings. These are savings that aren’t really “real money” in the quantifiable sense, but still real and tangible benefits in other ways. For example, every day that you go without filling a critical spot is a day that products and services don’t get out the door, losing money and competitive advantage for your company. Developing a good relationship with a staffing firm almost always increases the chance that the right resources are delivered for your open reqs in a timely manner at the right price.

You’re more likely to have dedicated account managers who understand your business requirements and don’t inundate your company with inappropriate resumes and candidate. These waste your managers’ time, and that costs your company real productivity dollars.

In addition, you enjoy consistent fulfillment of contractual obligations such as background checks, candidate qualification verification, invoicing, payment and reconciliation accuracy, etc., because the firms know the rules. It costs your company money to chase paperwork and sort through a quagmire of screwed up staffing firm invoices.

You also reduce legal risks due to policy violations. Your firms will better understand your rules, and are less likely to do damage to your brand.

Finally, simply streamlining inefficient, redundant processes carries its own benefits. A lean, clean machine is a cost-effective machine.

There are lots of tools out there that can help you streamline and improve staffing firm relationships (and you’ll find several at HotGigs.com). But there’s no substitute for old-fashioned relationship-building.

In my next post I’ll offer some of my favorite ways to build staffing firm relationships. If you’re already doing it, I’d welcome hearing from you. What problems have you encountered? What benefits (or issues) have you seen when developing closer ties to preferred vendors?

--Elaine

Elaine Taylor is a subject matter expert in the area of contingent workforce management (CWM). She consults with Fortune 500 companies to help them develop CWM strategies that effectively reduce the cost of their temporary labor resources (by as much as 22%), while minimizing “employee misclassification” risk and introducing business process best practices.  She has published broadly in the area of CWM, including co-authoring HR.com’s Vendor Management System Buyer’s Guide. Former and current clients include Charles Schwab & Co., Inc., Entergy Corporation, American Family Insurance, Ryder Transportation & Logistics, Northrop Grumman and Sutter Health.

How can you mitigate contingent workforce risks?

In my previous post, I talked about what kinds of contingent workforce-related risk a company might encounter these days. Once you’ve identified that risk, how do you build a plan to manage it?

Obviously there are a lot of variables in any individual company’s strategy, but in general I recommend a four-step plan.

Step 1: Understand that the risk categories are, in many ways, interrelated. For example, in many instances where a company has implemented “background checks” to address security concerns, the company ends up exacerbating employee misclassification/co-employment risk because of the manner in which the background checks are completed and monitored.

Step 2: Accept that there are no easy approaches. Each category has numerous components and addressing them sufficiently will be a complex undertaking. For example, many companies will say they have already eliminated the risk of employee misclassification/co-employment by implementing a tenure policy for contingent workers.

Yet what they learn when they find themselves on the defensive end of an employee misclassification/co-employment legal action is that “tenure limitations” serve only to put parameters around the size of the liability the company will incur. Tenure limitations do nothing to eliminate the potential for liability.

Mitigation of employee misclassification/co-employment risk occurs only when a company has addressed all of the key factors related to this category, the most important of which is control of workers, not tenure.

Step 3. Engage all key stakeholders early in the strategy development phase, as well as during implementation. The team should include representatives from these departments:
•    Human Resources
•    Procurement
•    Finance
•    Legal
•    Security
•    Compliance
•    and last but certainly not least, representatives of the user community

Step 4. Acquire the specialized CWM knowledge you need. You can do this either by engaging a subject matter expert (SME) or by investing the time and energy to learn the discipline yourself. But beware “the expert.”

Many companies have created costly problems by believing the claims of people or organizations that promote themselves as CWM experts. In fact, they’re experts in other fields, such as contingent staffing, VMS software development, procurement or HR. They may have a different agenda and they most likely don’t have the expertise you need.

In future posts I’ll tell you how to source this kind of expertise, and give you a list of questions you can use to determine who’s actually a subject matter expert in this area, and who’s a wolf in sheep’s clothing.

Of course, strategy development is only the first component. The implementation of your CW risk mitigation strategy brings its own challenges, and if you think those are “fun,” wait until you have to deal with the management and oversight aspects of CWM programs. I’ll cover those, too, at a later date.

In the meantime, please let me know if you have questions or concerns in this area; we’ll include them in future posts.

--Elaine

Elaine Taylor is a subject matter expert in the area of contingent workforce management (CWM). She consults with Fortune 500 companies to help them develop CWM strategies that effectively reduce the cost of their temporary labor resources (by as much as 22%), while minimizing “employee misclassification” risk and introducing business process best practices.  She has published broadly in the area of CWM, including co-authoring HR.com’s Vendor Management System Buyer’s Guide. Former and current clients include Charles Schwab & Co., Inc., Entergy Corporation, American Family Insurance, Ryder Transportation & Logistics, Northrop Grumman and Sutter Health.

Use RSS to stay in touch with candidates

Last week I was giving a Jobs2Web webinar, and I asked attendees how many knew what an RSS feed was—or had one. Almost no one did. Then I asked how many had a personalized home page from, say, Google or Yahoo? About half said they did.

Surprise—RSS is all over those personalized home pages. We had the big “ah-ha” when I showed them my Google home page, and pointed out the RSS links that were driving all that content into my page.

RSS, or "Really Simple Syndication" is popping up in job boards now, and it’s driving a lot of really effective tools. It’s going to be appearing all over corporate career sites in 2007, so it’s something you’ll want to understand.

RSS can be VERY valuable to your recruiting team because it can convert otherwise “wasted” visitors into “deferred candidates.” 

Today, the vast majority of career site visitors do three things: look, click and leave. We expect that—they don’t see a job they want, your apply process is too long, whatever. Fortunately, RSS lets you give those casual visitors a fourth option: they can add your jobs to their personal home page.

RSS feeds are something you’ll want to consider, and something that we’ve recently added to the category pages of our Jobs2Web clients. Here’s what it looks like:

It only takes about five seconds for visitors to set up the HotGigs RSS link on their home page, and once they do they’ll get advance notice every time you post a fresh job. This is what they’ll see:
   
I reviewed the data from one client and found that 23% of the visitors to that site also clicked the RSS feed link.  Over the course of a year that’s thousands of deferred candidates that otherwise would have been lost. With RSS, they can daily view jobs, and apply when their desired job appears.

Whether you add RSS feeds using Jobs2Web or ask your IT department to do it, don’t wait. It’s one of the easiest moves you can make and it can increase your talent pool enormously. Want to learn more? Visit our Jobs2Web site, or drop us a line.

Peter Brasket, HotGigs co-founder & senior vice president, business development, has extensive experience in e-commerce, staffing, advertising, and online promotion. He’s proficient in Japanese and the language of customer satisfaction, and has successfully built many customer-facing ventures.

Is Pay-Per-Click a good way to recruit candidates?

Hi. I’m Peter Brasket, and I co-founded HotGigs with our fearless leader, Doug Berg. When I talk with our customers a few questions keep coming up, so for my piece of this blog, I’ll try to answer them.

For example, clients ask whether pay-per-click advertising campaigns can help them find better candidates. Yes, but since they can be expensive and time-consuming, you probably also want to consider alternatives. We think we’ve built a more effective tool that can complement or even replace PPC: Jobs2Web.

Pay-per-click (PPC), also called search engine marketing (SEM) or cost per click (CPC), is essentially placing ads on a major search engine like Google or Yahoo, that appear whenever someone searches on a certain word or phrase. You pay $X for every resulting click to your site.

It’s big business. On any given search page, “paid clicks” account for maybe 15 to 20 percent of the links clicked. “Organic” clicks, i.e., the natural, non-sponsored results make up the rest.

PPC is a useful tool and many on-line companies, including HotGigs, rely on it. But it’s also expensive. Before you rely on it, you need to understand whether or not it’s the most cost-effective choice.

Remember, 80 percent or more of the clicks from a search engine results page are “organic, i.e., NOT coming from PPC ads. Our JobsWeb tool focuses on capturing those organic clicks at a much lower cost per applicant, so it saves you a lot of money.

Generally speaking, a Jobs2Web cost per applicant is about 15 to 20 percent of the cost of an applicant sourced through PPC.

BTW, if you're considering or using recruitment PPC you need to know your cost per PPC hire.  Or if you can't get to that level, at least try to measure your cost per PPC-sourced applicant.

Here’s how:

• Find out how much you spent on PPC in a month (your PPC vendor reports this)
• Determine how many people clicked on your ads during that month (PPC visitors—also available from your PPC vendor)
• Of those visitors, how many uploaded resumes during this period? (PPC applicant conversion). You can obtain this using a tool such as Google Analytics or a tracking parameter in your ATS system. This tells you how many of the people that clicked through to your site actually uploaded a resume. Dividing applicant conversion into PPC visitors will give you a PPC applicant conversion rate.
• Now divide the amount you spent by the number of applicants, and you get cost per applicant.

That gives you a cost per applicant baseline. Once you have it, you can track the results of your experiments in attracting applicants cost-effectively. These methods might include improving your “pitch” or call to action, adding custom landing pages that provide more targeted information, and so on.

We also use this data to measure the effectiveness of Jobs2Web (Download PPCvsJ2Wchart.gif to see a line-by-line comparison of actual Jobs2Web organic results vs. PPC).

For example one of our clients spends about $5K/month on Jobs2Web, and their average cost per applicant is declining, now about $16.27. The same spend on PPC at a cost per click of 60 cents (Google's average PPC cost last year) would result in a cost per applicant of $48 – assuming they reached a 1.25% applicant conversion rate. J2W saves the client $31.73 per applicant, and because Jobs2Web is an organic search-engine applicant generator, their average cost per applicant will continue to drop with with time.

A second, smaller Jobs2Web client spends about $3500 monthly for Jobs2Web and is currently generating a $20.83 cost per applicant.  Using more realistic PPC numbers – say $1 per click and a 1% applicant conversion rate- the client saves almost $80 per applicant against a PPC cost-per-applicant of $100. 

Obviously you’ll always want to deploy a variety of tools to draw quality candidates. But pay attention to cost per applicant; that’ll tell you whether you’re getting good value.
--Peter

Peter Brasket, HotGigs co-founder & senior vice president, business development, has extensive experience in e-commerce, staffing, advertising, and online promotion. He’s proficient in Japanese and the language of customer satisfaction, and has successfully built many customer-facing ventures.