Strong HR is Pivotal for Growing Organizations
In 2016 the leadership team of a professional services firm decided it was time to hire a human resource professional. The firm had experienced dramatic growth in the DC market with an increase from 70 employees to over 100 and plans to open up new markets over the next few years. Like many small to mid sized businesses the Office Manager was responsible for the firm’s human resources functions. She was a capable manager, but it was clear to senior leadership that many other human resource functions such as employee relations, basic policies and procedures and talent management were not being properly addressed.
Outsourced HR – A Great Vehicle for Growing Firms
Recognizing that talented professionals would continue to be foundational to the firm’s success, the leadership team committed to building a human resources function that would help the firm scale efficiently and with the highest quality. They hired Smart HR as an experienced and trusted partner who would help them innovate and make the firm an even greater place to work, ensure compliance with complex laws and regulations, and manage the function in concert with the firm’s focus on efficiency and cost effectiveness.
Smart HR provided a part-time HR Director with many years of experience executing and managing all facets of the human resources spectrum. In her capacity as HR Director she serves as a member of the executive team and supervises a number of Admin, Operations and HR staff. One of her first tasks was to complete an HR assessment and to work with the leadership team to shape an HR strategy consistent with the firm’s growth plans. Not surprisingly recruiting and retaining talented professionals and staff emerged as a top priority.
Quality & Cost-Effective Recruiting
Recruiting top talent in today’s tight job market is an extremely challenging and potentially costly proposition. Responding to the requirements of fast growth, ensuring strong technical and cultural fit, and providing an environment where employees are excited to work are pivotal competitive levers for any growing organization. The case below demonstrates how Smart HR Inc. developed and executed an innovative and cost-effective recruiting solution for a growing professional services firm. A comprehensive assessment of the firm’s recruiting approach revealed that using 3rd party recruiting agencies, the firm was spending 25% per employee on recruiting which was about 3-5% above industry average and would cost them an average of 18-20K per new hire (25% on base salary is a typically recruitment agency fee). This fee was a one time, upfront cost that negatively affected cash flow.
Here is what the Smart HR HR Director did to reverse this unfortunate situation. First, she worked with the executive team to define the tangible and intangible attributes that they desired in all of their employees. These attributes included behaviors that linked to the firm’s values. Next, she created a pragmatic process for working with hiring managers to define job requirements, vet applicants, and make hiring decisions. Then, she increased the employee referral to make it attractive for existing employees to refer qualified candidates. A crucial part of this process was the emphasis placed on the hiring managers accountability for spending time on requirements definition, resume review and preparing for interviews.
In addition to these important actions, the HR Director convinced the leadership team to shift responsibility for recruiting from a collection of 3rd party agencies to an in-house function of HR and Direct line managers. Recruitment would only augmented by a limited number of agency special requests. Through these efforts, the HR Director was able to gain better control of quality, strengthen communications with hiring managers, and become more agile and responsive. In addition, the firm realized a dramatic reduction in spending per employee from upwards of 25% to closer to 4% (which includes internal HR staff time and internal training). These numbers are dramatic given that employee headcount has grown from 70 to 150 in offices across three new cities. The total cost savings through in house recruiting to date is over 1.4 million dollars.
While in-house recruiting is not always a viable option for all growing companies, this case demonstrates the innovative approaches Smart HR, Inc. deploys with its clients to meet their specific needs in their specific environments.