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Due to the COVID-19 pandemic, the UK economy has shrunk and, unavoidably, entered recession. According to the Office for Budget Responsibility (OBR), it will be our nation’s deepest recession in 300 years.

Many organisations are focusing on a short to medium term strategy of remaining commercially viable whilst also preparing for a difficult commercial landscape for the foreseeable future. But they should consider an alternative approach to Talent Acquisition that could make a significant difference to their longer-term financial health and growth. It’s time to make new choices.

A mistake businesses often make in recruitment is planning their strategies by looking in their rear-view mirror when they should be looking forward. This is especially true in times of economic uncertainty. The COVID outbreak ejected us from a very good hiring environment and so models used over the last few years are no longer applicable. This is forcing a change in behaviour at a pace we have not seen before. The good times can also instil a dangerous and misplaced sense of confidence in business leaders. But the more forward-thinking and realistic they can be, the better their organisation’s prospects, particularly as we traverse this period of relaxing lockdown and head into the unknown.

When there is a dip in the market, companies are often guilty of holding onto fixed costs for too long. When there is a recession, the effects of this delay can be even more damaging. In talent acquisition, bought-in technology point solutions and in-house recruiters can become examples of these damaging fixed costs. The fixed costs are often too high and, as recruiting needs fluctuate, the TA structure can end up being inefficient with the need to end technology contracts or find roles for their in-house recruiters that aren’t recruitment based.

Simply removing the fixed cost of in-house recruiters and acquired technology is also an imperfect solution. The thinking in a recession – or the lead-up to a recession – is that nobody is hiring, but they are. Just not at the same rate and often only the pivotal and / or key roles. If businesses remove too much of that fixed cost without a back-up plan, the fallback is to enlist recruitment agencies to fill those essential roles that inevitably will come up. The most likely outcome of this is that the total cost will outpace the fixed cost of the in-house resources that were removed.

Business leaders need to weigh the following three options and choose the best model for their organisations and the current and upcoming needs of that business:

  1. Keep all recruitment and TA in house
  2. Outsource all recruitment, managed by your recruitment director. This model is typically used by SME organisations as it offers on-hand expertise when it comes to scaling
  3. Establish a hybrid between options 1 and 2. An in-house team manages recruitment to a certain level, and a partner is enlisted to manage the complexity and operations. This enables companies to retain knowledge internally.

The advantage of stripping back costs and enlisting help from outsourcing experts is that you are bringing external specialists into your organisation – together with their ability to optimise your tech stack and augment it with their own. They will know your industry and act as a shock absorber when it comes to economic peaks and troughs in the future. With a fully in-house team, high fixed costs remain through ebbs and flows in recruitment needs. With a Recruitment Process Outsourcing (RPO) partner the cost, as well as the service, can be scaled up and down according to your needs.

In the current UK climate, with Brexit, trade wars and the pandemic, now is not the time to be taking on more fixed costs. Now is the time to remove as many fixed costs as possible, relying on an RPO partner providing a clear path to reducing costs while increasing flexibility and scalability. Now is the time to think differently.

Seb O’Connell, President, EMEA & APAC – Cielo

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