Workforce Management - A Health-check
Case Study: Logistics Co.
Recruitment Supplier was approached by a mid sized logistics firm, a company with 10 depots across the UK and 700 van drivers, to analyse their recruitment and workforce management / planning functions and provide guidance on improvement. During our initial meeting, it became clear they had no handle on their temporary staffing costs or the number of recruitment agencies they were using. Individual depots were engaging unvetted agencies, resulting in ad-hoc compliance issues. Additionally, they wanted to change or outsource how they managed the shift rostering, as their incumbent technology was using Excel spreadsheets.
After spending time with their hiring managers and TA team, we found that they lacked control over costs. We recommended a master vendor/MSP hybrid model and the implementation of a specific Vendor Management System (VMS) across their current supply chain, which was managed via various Excel spreadsheets at the time.
We provided a full report on their current processes, risks, cost benefits of different options moving forward, and recommended strategy and changes. This approach didn’t change their workflow initially but provided insights into costs and vendor performance. After a three-month review, several underperforming agencies were terminated. The MSP brought in a Master Vendor to further improve workflows and reduce time to fill. As a result, overall costs were reduced by over 30%, and risk was significantly mitigated. We set metrics for the VMS to track agency performance and outlined the reports we wanted from the MSP.
In-house or Outsource?
Logistics Co. initially contacted us to understand their options around improving their current process (in-house) or migrating to an outsourced model. Delving into the business showed there was much more to consider, but many companies go through a cycle of reviewing in-house or outsourcing. So, what should you consider?
Costs:
In-House: Involves significant upfront costs for hiring recruiters, investing in technology, and ongoing operational expenses.
Outsourcing: MSP/RPO services come with predictable costs but can vary based on service level agreements.
Hybrid: Balances costs by leveraging external expertise for specific needs while maintaining some in-house control.
Recruitment Types:
Temporary and Contract Workers: Managing temps and contractors requires efficient rostering and shift management systems. In-house teams need robust software to handle these complexities.
Permanent Employees: In-house recruitment allows for greater control, while outsourcing provides access to a broader talent pool and streamlined processes.
Statement of Work (SOW): Outsourcing specific projects or tasks to external providers under a detailed SOW can help manage costs and ensure accountability for deliverables.
Recruitment Systems:
In-House: Requires purchasing and maintaining technology for applicant tracking, rostering, compliance, shift management, time & attendance and so on.
Outsourcing: MSP/RPO providers typically use advanced recruitment technology, reducing the need for companies to invest heavily but you are limited by the systems the MSP has access to.
Managing Agencies:
In-House: Directly managing multiple agencies can be complex and time-consuming but you keep the element of control.
Outsourcing: MSPs/RPOs handle agency management, streamlining communication and coordination.
Cost Per Hire and Time to Hire:
In-House: Control over the recruitment process can potentially reduce these metrics, but efficiency depends on the internal team.
Outsourcing: Established processes and networks often lead to reduced cost per hire and time to hire.
Pitfalls of Each Model
In-House:
High initial costs
Resource-intensive
Scalability issues
Outsourcing:
Loss of control
Integration challenges
Cost variability
Hybrid:
Complex coordination
Inconsistent processes
Management overhead
Metrics to Consider implementing for each option
Cost Per Hire
Agency performance
Time to Hire
Quality of Hire
Candidate Experience
Offer Acceptance Rate
Recruitment Funnel Metrics
Hiring Manager Satisfaction
Diversity Metrics
Final Thoughts
The decision between in-house recruitment, outsourcing to an MSP/RPO, or adopting a hybrid model depends on specific needs, resources, and strategic goals. Each option has pros and cons, and a thorough analysis of costs, process efficiency, technology requirements, and workforce management capabilities is essential for making an informed decision. By carefully considering these factors, companies can choose the most effective recruitment strategy to meet their long-term objectives.
Recruitment Supplier is agnostic in both recruitment model selection and technology selection, ensuring unbiased guidance tailored to your unique business needs.
If you could use a recruitment process health check or are considering outsourcing staffing, bringing recruitment in-house, or implementing new technology within the workforce management process, do get in touch via the contact form on https://www.recruitmentsupplier.co.uk/consultancy
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