Service Level Agreements: Summing Up

For the past two weeks we have been discussing the value of service level agreements, or SLAs. There has been a large response to the questionnaire I distributed, and I now want to share some of the reactions and comments I have received and sum up this discussion. While almost all of the agencies and third-party recruiters who responded indicated that they use formal agreements with their clients, very few of the internal recruiting departments say they use service level agreements. This is too bad. Service level agreements have many benefits, as outlined last week, and they can help to improve how you are perceived by hiring managers, prevent massive cuts in staff and budget during crunch times, and provide the goals you need to earn bonuses. The organizations that use SLAs were overwhelmingly positive about the experience. I had phone conversations with many of those users, and they felt it was essential to their success to have these agreements. Other firms indicated that, although they do have goals established for their function, these goals are not put into a negotiated agreement, as they would be in an SLA. One person said, “No formal SLA is in effect. However, there are hiring metrics kept to establish goals.” My worry here is that probably no one but the recruiters know what these goals are ? or care. Hiring managers who have not been through some sort of negotiation over service levels and expectations will not care what your goals are. One firm I talked with uses a broad-based SLA ? more of an overall workforce plan. This can be quite effective as well. They said, “We establish the number of people that will be needed in the top of the funnel and determine where that candidate flow will come from (either advertisement, cold calling, or data mining) at a strategy meeting. From there, we build a deliverables schedule, and everyone at the strategy meeting commits to timelines.” If they include hiring managers and those responsible for projects, this firm really has the first step of creating an SLA. This person went on to say, “To some extent this arrangement is negotiated. Mostly we listen to all parties involved and come to an agreement. Rarely would I say it is a heavy-handed approach.” While it is not clear how the agreement is finally approved, what would make this a strong process would be to get everyone to sign a document agreeing to the negotiated outcomes. For those looking at a way to segue into an SLA process, this approach could be a good start. Putting an SLA together is a process and takes time and influencing skills. The first time around, though, is often an educational process. Each hiring manager has to be convinced that these agreements are worth the time spent in discussion and negotiation. Tying the costs of recruiting to your performance will get managers to listen. An Example of a Comprehensive SLA I recently had a long conversation with the director of staffing for an East Coast high-tech firm. He shared an extensive SLA document with me from his firm. It is comprehensive, covering eight separate areas:

  • Needs assessment
  • Article Continues Below
  • Statement of work (recruiting services timeline)
  • Cost estimates
  • Responsibility charts
  • QA measurements and metrics
  • Recruiting schedules
  • A chart of the recruiting organization
  • A list of recruiting roles

The needs assessment section is really a workforce plan for each hiring manager or business unit, depending on the need. It covers growth, projects attrition, and shows hiring managers the current capacity level that supports their respective organizations. This is a feature I rarely see. It is very helpful, though, to initiate a discussion with a hiring manager about capability and staffing levels. The statement of work outlines the general areas of responsibility along with a detailed listing of sources to be used, screening processes to be used and how offers will be made. It includes a timeline showing the normal flow and expected times that will be involved at each stage. This is a powerful feature that sets expectations right at the beginning. Any discussions about time take place before recruiting starts, not after, when you can’t do much about it. The costs estimates outline cost per hire goals and explain to the hiring manager how they can have an impact on those figures. These estimates lay out projected costs and show where increases might occur and why. Responsibility charting is a simple table with responsibilities and roles clearly defined and assigned. The sections on metrics and recruiting schedules are just what they seem to be. Metrics and quality standards are discussed and co-determined between the recruiter and the hiring manager along with a schedule, which will become the progress report and flowchart for both parties. The final sections overview the organizational structure and roles of the currently assigned recruiting team. Adjustments can be negotiated based on the hiring manger’s needs. What is best about this is that the process is made transparent to everyone. No one should be surprised by a change in events or a problem; they can all be discussed against the standards that were negotiated. This extensive document provides the best outline for an SLA that I have seen. This staffing director has introduced SLAs at several organizations over the years and finds them essential to his success. When faced with this current market downturn, he was able to renegotiate the SLA, focusing in on hiring people who could add revenue or create new products. This allowed him to shift recruiters to critical areas, freeing him up from arbitrary budget cuts that can easily destroy months or years of hard work. He has cut recruiting costs by $1.5 million dollars in areas where it makes sense to cut. While some recruiters have been released, many others have been assigned meaningful searches for hiring managers who are after people that the firm needs. This is one of the major benefits of having agreements that clearly outline what you will do and how much it will cost. In summary, SLAs are becoming required documents because they capture and summarize a communications and negotiation process that leads to openness and understanding. Given these tough times, this is what we need more than ever.

Kevin Wheeler is a globally known speaker, author, futurist, and consultant in talent management, human capital acquisition and learning & development. He has founded a number of organizations including the Future of Talent Institute, Global Learning Resources, Inc. and the Australasian Talent Conference, Ltd. He hosts Future of Talent Retreats in the U.S., Europe, and Australia. He writes frequently on LinkedIn, is a columnist for ERE.net, keynotes, and speaks at conferences and events globally, and advises firms on talent strategy. He has authored two books and hundreds of articles and white papers. He has a new book on recruiting that will be out in late summer of 2016. Prior to his current work, he had a 20+year corporate career in several San Francisco area tech and financial service firms. He has also been on the faculty of San Francisco State University and the University of San Francisco. He can be reached at kwheeler@futureoftalent.org.

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