4 Keys to Deciding: Should We Centralize Recruiting?

At PeopleResults, we help our clients with many different interesting business challenges, including their organizational strategy.  Since my area of focus is Talent Acquisition, the question I often help HR and TA leaders answer is, “Should we centralize recruiting?”   There’s no one-size-fits-all answer to that question because each company and team is different.  That’s when methodology matters.  We typically start with 4 key considerations when helping our clients decide which structure is right for them:

DemandThis seems obvious, but it’s critical to know projected hiring volumes and any global hot spots, ideally for the next 5 years.  So, if your China operations are growing by 50% and the Americas at 25%, those are important puzzle pieces to determine where to place your resources and leadership.  When you think about it, recruiting is like a supply chain.  So in addition to the workforce plan, we look at what I call “Recruiting Math”, a.k.a., pipeline or “funnel” statistics.  This helps us know not only the end goal, but to predict the effort involved in turning your employment branding and sourcing into actual hires.

ScalabilityEvery talent leader knows that as the business fluctuates throughout the year, so does the recruiting plan.  So, the ability to shift resources to scale up and down is critical.  If you can do that with existing global resources, it may make sense to centralize.  Another option is to consider outsourcing part or all of your TA delivery.  This allows the Recruiting Leader and their direct reports to focus on strategy and innovation, with an external partner handling the day-to-day hiring.  Of course, RPO is not a panacea.  It requires tight management, a “trust but verify” relationship, and it isn’t right for every company.  But if scalability is a primary concern, outsourcing can be a new and flexible component of your organizational strategy.

Appetite for Standardization: The degree to which global TA teams share and coordinate their processes is one of the keys to efficiency.  We often start by categorizing recruiting steps into three levels of harmonization, to help clarify for leaders and team members which activities will be managed the same way all over the world, and which ones don’t require compliance with global standards.  For example, some organizations report recruitment metrics globally on one scorecard – a “Core & Consistent” standard.  They might also provide guidelines for their assessment approach and competency based interview questions, but not mandate their usage.  That would be a “Core & Flexible” item.  Finally, their selection of a particular search firm in Kuala Lumpur might be a completely geographic decision, making it a “Local Choice”.  Once agreed and implemented, the “Core & Consistent” steps can present opportunities for centralization.

Existing Resources:  We think about this in both quantitative and qualitative terms:

  • How many direct and indirect resources around the globe do you have access to?
  • Is there a solid line, or dotted line relationship to the people who get recruiting work done today?
  • Are they well respected and trusted by the internal customers they serve?
  • Is there budget to add headcount, or is there a push to reduce fixed costs associated with hiring?
  • What are the current productivity targets for recruiters, and are they held accountable for their results?

These critical questions will help determine your organizational appetite for a centralized team.  Unless you’re in a startup, a “clean sheet” org design is not very practical.  And while it’s not about creating roles around current team members, you might be surprised at how existing talent can rally around a fresh approach to recruiting.  I’ve done it, and it works!

All in all, organizational change is not for the faint of heart.  It takes insight, good design, and careful communication.  But these four considerations can help determine if the business case is strong enough to merit centralization.  If so, PeopleResults is here to help!

Erin McDermott Peterson is a Partner with PeopleResults. Follow her on Twitter @ErinMcPeterson or connect via email at epeterson@people-results.com

Erin McDermott Peterson