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Should You Outsource Your Sourcing? 5 Tips for Success

by
Kevin Wheeler
Jan 19, 2011, 2:47 pm ET

Even though we are in an economic down cycle and unemployment in the U.S. is hovering around 10%, recruiters are still struggling to find people with the skills and experience their hiring managers are looking for.

Pipeline im BauPartly this is driven by the commonly held assumption that these skilled and experienced people have been affected by the recession and are actually in the job market. Recruiters know this is not the case and that many candidates have become even more difficult to find and entice away from a secure position.

While demand for lesser-experienced, educated, and skilled candidates has slacked, it has risen for those with higher-level skills. Many firms are trying to replace the employees they had with moderate skills or who were in learning roles, with people already accomplished in their profession.

This is a poor time to be an apprentice or a mid-level worker, as the focus is on paying a bit more for people with better skills who are more capable of achieving goals with minimal help right away.

This has put a huge burden on recruiters. It has increased the number of searches needed for the hard-to-find candidates while almost eliminating the need to source for the easier-to-find positions. This, in turn, has driven recruiting leaders to take a hard look at developing specialized internal sourcing functions or finding an outside firm or individuals to do it for them.

Things to Consider

Before deciding whether to keep sourcing inside or find an external provider, a recruiting leader needs to make sure they have answered three questions carefully: (1) is there a sufficient volume of need that will last over some period of time to justify focused sourcing, (2) do you need to simply have the names and contact information of potential candidates so that a recruiter can screen and assess them, or do you also need screening and assessment or even more than that, and (3) do you have the internal staff with the capability, knowledge, and bandwidth to be effective?

If there is an ongoing need and you lack staff, looking at an outsourcing provider might be both time and cost effective. Building an internal sourcing capability can take months of training in addition to the time needed to find recruiters with the needed skills. Many firms turn to contractors for this service, and that may make sense. Contractors are often local, may be very familiar with your organization and both its culture and skill needs, and work for a reasonable fee. However, they also often increase the leader’s workload significantly.

When sourcing needs are high, timelines are short, needs varied and changing, and the skills hard to find locally, then other solutions may be better.

What Kind of Outsourcing Do You Need?

There are three types of outsourcing:

  1. Generating names of potential candidates, often called research, which results in a list of names and contact information. These may turn out to be viable candidates, but many will not. All screening and assessment is made by internal recruiters and hiring managers. Results are most likely measured by how many names were generated, how quickly it was done, and how closely they met the previously-agreed-to specifications.
  2. Generating names and then screening and assessing them. This usually means that only candidates who meet certain qualifications are presented. Results are measured by how many qualified candidates are presented and by the speed with which this takes place.
  3. An emerging type of sourcing involves all of the above but also includes developing and managing a proprietary talent community of qualified candidates. This might include frequent communication with candidates, setting up and maintaining a Facebook page or something similar, and providing a means for internal recruiters and perhaps hiring managers to communicate with candidates.

Tips for Outsourcing Success

Clarity and Transparency: You need to have a clear strategy that outlines how sourcing fits into your overall success, where it is most needed, and be very open about why you are seeking an outside source.

Know which of the three types of outsourcing above you are primarily interested in: Obviously that choice will affect which outsource partner to use and will impact what level of relationship you need to have. Names generation can be performed by individual contractors and they can be located almost anywhere. The major choice criteria are ability to find the people you are looking for and the speed they can do it. Other sourcing arrangements are more complex; often need face-to-face contact at some point; and require a more sophisticated level of negotiation.

Choose an appropriate partner: Many times I see recruiting leaders choosing outsourcing partners without full knowledge of how deep their skills go or what their previous clients thought about them. You need to get references, spend time making sure their expertise matches your needs, and perhaps even start with a trial to see how they perform. You also need to make sure they can grow with your needs and fit your corporate culture.

Define your service level expectations: Work with your outsourcing partners to write down a set of expected performance levels, including time to find candidates, how many need to be presented, and what constitutes quality. Defining what a quality candidate is often becomes the most difficult aspect of a relationship. Take the time to be sure the definition is clear and how it will be measured is agreed to by the hiring manager, the outsourcing provider, and yourself.

Establish a vendor relationship manager: Relationships don’t just happen, and they are far more than a contract. Good communication, access to hiring managers when needed, and a willingness to negotiate through difficult issues are necessary components of any successful relationship.

Having a single person who acts as the account manager with the outsource provider is the best way to begin building a long-term-success model. When I speak with parties to failed outsourcing arrangements, lack of communication and difficulty to get issues resolved are significant factors.

Develop conflict resolution processes: Be sure to set up some informal and formal ways for conflicts, disagreements, and uncertainties to be addressed. This can be through the vendor relationship manager or through a committee or other body that is set up to deal with conflicts. The more defined this process is, the better it will be. It should answer questions such as: when is a conflict at the level of needed more formal resolution, how is a complaint raised, and whose decision is final.

Allow access to hiring managers and other key employees: Make sure you allow an appropriate level of direct interaction between the outsource team and the hiring managers. After all, the goal should be finding and placing a quality candidate, not about internal power struggles and politics.

There are many success stories, and all of them are because these basic steps were followed.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Keith Halperin

    Thanks, Kevin. ISTM that you should INSOURCE your sourcing if your onsite people are worth less than $11/hr (the vast majority of sourcing both phone and internet can be done for this) or more than $50/hr (the remaining sourcing for purple squirrels). Organizations that are paying $11-$50 for onsite sourcers are (in most cases) wasting their money.

    Cheers,

    Keith keithsrj@sbcglobal.net

  2. Brian Kim

    I found this to be successful for recruiting agencies that base their success in volume base recruitment. Outsourcing recruiters seem to be successful for companies that partner with Fortune 500 companies that ususally go through a VMO. (For example, Google, Microsoft, Boeing,)

  3. Ryann Reddy

    If a company has a solid recruiting group that knows how to handle the sourced information is key. I have found that if the client doesn’t have this the info is just wasted or not used properly to source candidates correctly.

  4. Sunil Potnis

    I am not sure if I would agree to outsource the sourcing component. Sourcing is an integral part of the entire hiring cycle and I believe every recruiter should do his/her own sourcing. I am not sure when sourcing got separated from recruiting business to be a full fledge function by itself but every recruiter should be capable of doing own sourcing. I am very sure if a recruiter has between 15-20 reqs than doing end to end hiring cycle is not difficult. I don’t like eliminating sourcing piece from the recruiter. A good recruiter has to be a good sourcer.

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