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Jones-Parker/Starr
Strategic Consultants to Human Resources and Executive Search Consulting Firms
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SurveyInhouse CapabilitySurvey of Human Resource Professionals2000 Participants The survey represents a sampling of the opinions of over 158 Human Resource executives on the subject of inhouse capabilities. Respondents were primarily in Fortune 500 companies.
JPS Comment: The concept of developing an inhouse capability seems to be most applicable to large corporations and small, fast growing companies with volume hiring needs and is applicable to venture capital firms concerned with attracting quality management into their portfolio companies.
Concept Appeal Approximately one quarter of respondents (23%) feel their staffing
departments currently handle their recruiting needs satisfactorily.
Almost one quarter say an inhouse capacity does not work or does not make
sense (23%). Slightly less than
half (46%) say they have already established a form of inhouse capability.
JPS Comment: There may be confusion about the definition of inhouse search
capability. It is evident that the concept is gaining consideration and
experienced consultants in search firms are being recruited into corporations. Purpose The most important reasons to bring recruiting inhouse include reduction
in costs (39%), faster hiring results (24%), greater familiarity with company
culture (24%) and better control (10%) over the recruiting process. JPS Comment: Improving the search process by bringing external consultants
inside is viable. Search
consultants and hiring management should commit to realistic goals and
timetables at the beginning of a search assignment. Negotiating discounted and fixed fees should be considered to
reduce costs. Background
Experience in retained search consulting (57%) is the most important
background. However, work in a
contingency agency may also be useful (22%). JPS Comment: Retained search consulting experience is usually better
preparation than contingency experience because the listening skills required as
a partner and consultant are more fined tuned. Measurements of success The tools for measuring performance ideally should include the
time to completion (34%), percent of searches completed (26%), number
of qualified candidates presented (19%), longevity of hired candidates
(14%) and hired candidates’ contribution to shareholder value (7%). JPS Comment: Quality control and evaluation has been missing from the
recruitment process. Instituting
measurements based on the priorities of an organization should be part of any
recruiting effort and will help clients assess the value added by inhouse and
external recruiters. Clients should
drive this enhancement. Compensation A significant number of respondents (38%) had no answer when
asked, “What is the right salary for the head of staffing?”
However, an almost equal number (36%) believe that $150K or
more should be the base minimum salary. In
addition to salary, stock options (55%) and a completion bonus (28%)
when assignments are successfully filled should be offered as well as
sign-on bonuses (10%). JPS Comment: Attracting search consultants requires a competitive
compensation plan which must include wealth building opportunities.
Even in the staffing arena "talent rules." Benefits Every respondent (100%) felt that relying on inhouse staff results in a
reduction of external fees. Other
benefits include more accurate decisions (45%) regarding selection of external
search firms, better control and efficiency (27%) and improved understanding
(28%) of off limits issues and how they affect recruiting.
Most respondents (87%) do not believe an inhouse search group can work
for clients outside the company while serving inhouse hiring managers. JPS
Comment: The benefits of using inhouse search staff confirm that the reasons for
taking this approach are valid. However,
the concept of a separate "company" does not have the same acceptance
for reasons of confidentiality and competitiveness. Internet Respondents (69%) feel that the Internet will be used for lower level recruiting and that the top salary threshold will be in the $150K range (47%). JPS Comments: The Internet will continue to affect recruiting in ways we cannot yet understand. Everyone in recruiting needs to evaluate how to use the Internet to his/her advantage. Internet search is a tool that will lead to the creation of a permanent position as Director of Internet Resources. Other General Comments The majority say inhouse search managers · can "raid" competition (50%) · do not have access to better search technology (64%) · are not more likely to secure a candidate commitment (79%) · are not more interested in new hires (57%) · are not more aware of company strategy (57%) The majority say external recruiters · have an off limits conflict (64%) · should not handle all line searches (58%) · can better maintain confidentiality (50%) · can carry higher workloads (64%) · will attract better athletes (71%) · have access to a broader talent pool (93%) JPS Comment: There will always be a role for external recruiters based on demand for service, unusual circumstances, level of an assignment and the need for the Board/Senior management to justify and bring objectivity to the process. There are inherent limitations to both approaches. Other Predictions and Trends A panel of Search and Media Luminaries sponsored by the Association of Executive Search Consultants (AESC) in December 1999 discussed the following predictions and trends. · Executives will have their own special representation similar to the "sports agent." Recruiters will have to go through that gatekeeper. JPS Comment: Several consultants have tried this approach without success. However, they may have been ahead of their time. The idea has merit. · Traditional search will be relegated to the highest-level positions only while the Internet will take over mid-level recruiting. Therefore, Internet career sites will cannibalize the traditional search firm. JPS Comment: Traditional search is already being cannibalized in those large firms with Internet products.
· “Dot coms” will continue to attract CEOs from traditional and non-traditional backgrounds and even executives with gray hair will move into the .com companies. JPS Comment: The shortage of talent will create more opportunities for gray haired executives, women and minorities. products.
· There will be more searches conducted jointly by two search firms. To date, this has only been done a couple of times, but team recruiting will become more common. JPS Comment: Inhouse search managers have already conducted dual track searches to deal with the off limits problems of external search firms. · There will be only four global search entities in the year 2005 with the balance in specialist boutique firms. JPS
Comment: There will be eight to ten global firms. · Video clips will replace resumes and include project samples with emphasis on the spirit and values which executives bring. JPS Comment: The Internet makes the technology for video resumes and conferencing more available and acceptable. Candidates' values will continue to grow in importance but results are still key. · General management experience will become more important in the future so that someone currently designing a career strategy needs to have a mix of specialist and generalist work experience with technology savvy as a key component. JPS Comment: Searching in a narrow specialty can develop early burn out and a tendency to recycle candidates. In the future, recruiters will return to a broader approach and bring teams of specialists together to serve the client's specific needs. · Clients will pay higher fees to get the talent they want. Talent will rule! JPS Comment: Talent will rule and call the shots! The recruitment process will continue to need fine-tuning so that companies can attract the highest quality talent available.
See
the Integration Non-Matrix See
the Separate Profit Center model OBSERVATIONS Intake
Meetings Inhouse capability spends more intake time than is required by external search consultants. Job
Specification Change Changes in the job specification may occur more frequently. External search firms would charge a new fee for search changes. Fees The actual charge or credit to the corporation is a lower rate but should be analyzed as if an external rate (33 1/3%).
Culture Inhouse staff understands the culture better than external consultants but can be hindered by internal politics. Volume External search consultants handle higher volume. They have more time to attack the problem. Results Inhouse capability has more pressure to produce results. External search consultants manage expectations and dodge bullets. Outside A key issue is what to do with staff during a downtime or plateau in demand. This has led to the consideration of working for outside companies on a selected basis. The idea has not been embraced. Shootout Inhouse staff find themselves competing in shootouts with external consultants. Dual searches have resulted to cover off limits. Video
Conferencing This approach is gaining in acceptance. HR departments should consider using this technology. Beginning The first step is to hire a senior search consultant to lead the inhouse capability staff. The ability to add value by being inhouse has appeal but adequate compensation must be offered. Compensation Base Salary Bonus quarterly based on performance of the group. Examples: On quarterly basis · Take total "revenue" · Back out costs · Put 50% into bonus pool · 50% accrues to HR department Pay quarterly bonus based on who "sold" and who "executed"
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