Key Steps to Consider When Reevaluating Your Human Resource Costs

shutterstock_226614253_webReevaluating and improving human resource efficiency is vital to the success of any Property Casualty insurance company, especially when employee turnover can be so costly. An article by Insurance Business America stated, “…a November 2012 study from the Center for American Progress found that for positions earning less than $75,000—including most insurance producers—the cost of firing and hiring a new employee was roughly 20% of that position’s salary.” This means that a bigger emphasis is being placed on getting the hiring process right, making it even more important for every human resource department to take a closer look at their company’s candidate recruitment strategies and expenses.

When reevaluating human resource costs:

1. Determine if your organization has a ‘spend’ or ‘invest’ mindset. When asking human capital questions to hiring leaders, pay close attention to their responses. If the overwhelming responses to your questions are “how much is it going to cost?”, then you are likely part of a ‘spend’ culture. Conversely, if you are consistently asked “what is the expected return if we do this?”, then you are probably working in an ‘invest’ culture. These are two very different environments and understanding how to best deliver services to support the organization can drive everything including culture, attracting, hiring and retention strategies, metrics and recognition programs.   

2. Continually assess your hiring strategies, processes and budget. If you are spending or investing most of your time and money on recruiting and hiring whether internally or via third party, is it paying off? Make sure you are evaluating and measuring the right human resource strategies to really know if they are functioning in the most efficient way for your company. Items like reducing recruitment expenses or improving your investment return are key items to take into consideration. Should you insource or outsource recruitment efforts? If you decide to insource, you must develop processes that ensure your internal recruiters are solely working on recruiting needs. If you outsource, selecting the right recruitment firm for your company must be a priority to ensure human resource efficiency.

3. Find the most qualified insurance recruitment firm/recruiter for your company’s needs. When outsourcing your hiring efforts, your company must decide if hiring a recruitment firm or a specific recruiter will work best for your hiring needs. There is a big difference. When you hire a recruitment firm, you aren’t guaranteed to get the same recruiter every time. If you hire a specific recruiter, this means you are intentionally hiring a specific person to be the only one to conduct your searches. In either scenario, your company must seek out firms and recruiters that have a proven track record, impeccable referrals, large networks and are experts in all aspects of your industry. These are a few key qualities that will produce a qualified candidate in a timely manner; saving your human resource department time and money.

4. Ensure you are utilizing your internal/external recruitment strategies efficiently. If you decide to keep recruitment efforts as an internal responsibility through an in-house recruiter, make sure processes are in place to minimize distractions so that recruiting efforts are their sole focus. Often times, internal recruiters can get pulled into the other realms of human resources for various reasons. If your company decides to outsource through recruitment firms, be sure you are comfortable with their recruiting process, expertise and the type of search being conducted. Consider initially hiring only one or two firms or recruiters if you are conducting a contingent search to source potential candidates. Some companies think that using more recruiters to find employees will result in a larger pool of qualified candidates to choose from. This is not always true. In most cases, firms use many of the same methodologies to identify candidates; therefore you essentially end up with multiple companies contacting the same candidates.  This creates marketplace confusion and sometimes lessens a candidate’s desire to pursue your opportunity. Keep in mind, candidate identification is only part of the process, the best recruiters are also able to access and influence candidates based on their deep relationships, industry knowledge and personal experience.  

5. Implement the most effective type of search. When using a recruitment firm, you should be able to match your position and budget with one of the firm’s search options.  For example, if a company is looking to attract exceptional executive level leaders while learning about passive executive talent across the nation, a retained search may be the best option.  If a company is looking to hire key individual contributors and/or maximize their candidate pool, perhaps a contingent search should be utilized.  Or, if hiring high quality, management level candidates is necessary, consider using a customized blend of retained and contingent search features.