High-speed, high pressure, or scaled-up in-house recruiting can lead to suboptimal hiring outcomes. Poor quality hiring exposes organizations to costly risks, including poor performance, increased cost of vacancy, and employer brand damage. The good news is that these risks can be mitigated through the use of Recruitment Process Outsourcing or RPO.
Mitigating the cost of a poor hire
Let’s start with one of the most significant risks for any hiring organization: the risk of a poor hire.
There are many understandable reasons for making a wrong hire. Perhaps a talent acquisition team is understaffed, the processes to find, attract and select candidates are not defined, an organization needs to fill a vacant role urgently, or top candidates are getting snapped up by competitors in a highly competitive market.
But these factors expose the organization to the long-term costs of poor hiring outcomes.
Thorough hiring processes and due diligence can suffer when hiring teams are under pressure, meaning not enough time is spent examining a candidate’s work experience, testing their skills, or determining if they will be a good cultural fit and a worthy representative of the brand.
Poor hiring leads to significant and unnecessary costs. Korn Ferry’s research found that the cost of replacing a manager within 6 to 12 months of hire is 2.3 times their annual salary – a significant expense considering the rising costs of hiring a new candidate into an organization. A high level of attrition and vacant roles will impact the bottom line and overall revenue potential.
A poor hire also leads to significant indirect costs to the business in terms of poor delivery, unhappy clients, and the damage to the team culture caused by working with an under-performer. Other team members often have to cover any projects that the poor hire has failed to deliver, leading to increased stress and resentment.
Finally, there’s the morale factor: no one likes watching a colleague – even an underperforming one – being let go.
Fortunately, holistic RPO solutions are built to improve quality outcomes while hiring at speed and at scale. RPOs work closely with clients to understand their culture and the key drivers for their organization. “As a result, we’re able to create profiles and processes that ultimately lead to better hires”, he said.
Korn Ferry has some very specific & proprietary IP known as Success Profiles which align with our client's internal structure, their culture, and are used to determine what will be the best hire for that client. This IP, along with rigorous processes and leading technology associated with an RPO, help mitigate the replacement costs that come with a poor hire.
Korn Ferry’s Intelligence Cloud – our AI end-to-end talent platform - combines employee data, market data and Korn Ferry-owned data and insights to accurately inform talent decisions with precision. It gives you and our recruiters the competitive edge to not only source talent, but make sure the talent is the right fit for your business. The seamless flow of data creates a faster end-to-end process from sourcing, assessing, securing and developing talent. Simply put, you get the best talent faster.
A key part of Korn Ferry’s Intelligence Cloud, Success Profiles are dynamic benchmarks that reveal the traits your team needs to help your organization reach its goals, such as innovation, customer-centricity, inclusivity, cost-efficiency, connectivity, agility, service, and sustainability. Leadership Success Profiles help unearth if candidates are inclusive, think digitally first, and are self-disruptive.
“Korn Ferry has some very specific & proprietary IP known as Success Profiles which align with our client's internal structure, their culture, and are used to determine what will be the best hire for that client.”
Mitigating the costs of unfilled roles
Don’t make the mistake of underestimating the impact of vacancies or unfilled roles. Vacancies can increase workloads of existing staff (leading to burnout, stress, and attrition), increase time to production, and will ultimately lead to loss of revenue.
A Korn Ferry study warned of a global talent deficit of more than 85.2 million workers by 2030, which translates into an eye-watering $8.5 trillion revenue shortfall as a result of unfilled positions. The worst impacts are expected across four sectors: financial and business services, technology, media and telecommunications, and manufacturing.
Thousands of organizations have already experienced a taste of this talent crunch during the pandemic, with talent shortages at a 10-year high and 69% of employers struggling to fill positions in a candidate-driven environment.
To fill crucial roles in a highly competitive talent market, businesses need to leverage ready-to-go, highly efficient, fast, and effective recruitment processes that decrease time-to-hire and maximize recruitment ROI.
RPOs maximize the process to reduce the time to fill vacancies. RPOs like ours work to create proactive talent pools and efficient processes to fill positions more quickly. Korn Ferry has found that using an RPO can slash hiring time by upwards of 35% and costs by 30%. These time and cost savings vastly outweigh the costs of partnering with an RPO provider.
By 2030, Korn Ferry predicts a global talent deficit of more than 85.2 million workers.
Protecting the recruiter brand
A leading RPO solution can be used to de-risk recruitment, safeguard the employer brand, and enhance the talent pipeline.
An ill-informed hiring process can impact an organization’s reputation in several ways. A poor hire will typically not be a great employee, and delivery to customers will be impacted, which of course is not good for an organization’s brand.
Other risks include the negative word-of-mouth associated with high attrition. Clients, suppliers, competitors, and customers will notice, for example, when their point-of-contact keeps changing. Frustrated candidates will share information about their poor candidate experience online, making it increasingly difficult for the organization to attract new talent.
With success profiles, Korn Ferry has a very clear perspective on what “good” looks like for thousands of roles. These insights feed into our AI sourcing framework to find the candidates with the right attributes against requirements.
Our assessment practices then select the best options, while an enhanced candidate experience assures the best talent wants to join your organization.
A highly professionalised hiring process will fully adhere to industry compliance and help ensure the new team member aligns with the organization’s culture. Great hiring processes also remove the burden created by unfilled roles.
Korn Ferry’s clearly defined processes guarantee we do our due diligence, while robust reporting gives us visibility across the whole recruitment function. This enables us to de-risk talent acquisition not just for a single candidate, but across thousands of hires.
Ultimately, Korn Ferry’s RPO solution does not cut corners. We have made some significant investments in technology that create a very efficient process and a high level of delivery for recruitment.
Choose an RPO solution that will work to safeguard your employer brand. I recommend finding a provider that:
- Helps de-risk recruitment by understanding and professionalizing every stage of your hiring process.
- Evaluates and redesigns your processes to improve the consistency, quality and efficiency of your talent acquisition function.
- Ensures candidates align with your team culture.
- Uses science and technology to take the guesswork out of recruitment and to support decision-making with trusted data.
If you want to learn more about the positive impact an RPO can have on your talent acquisition, please download our RPO eBook.