The name of Mike Bishop might be a new name to many readers of this blog, given that he is not massively social. Neither has the business he heads the recruiting team for, Ricoh UK, implemented any new innovations in the social recruiting space. I have chosen Mike for this Sundays shout out because of what he has achieved over the last 2 years, in moving Ricoh from being heavily agency dependent, through to a direct sourcing model, and it has brought real results.
The shift to direct sourcing is probably the biggest change in the UK recruitment market. There is significant change afoot, and is a trend I’m expecting to dominate in 2012. I spoke to Bishop recently about the reasoning behind the change in thinking at Ricoh, and what the journey they had taken. Similar to other organisations I have spoken with who have followed the same route, it wasn’t all about reducing the cost of hire, although this has been a notable outcome.
Bishop feels that direct sourcing has given them a bigger impact on quality of hire, control over process, (in particular manpower planning) and harnessing the employer brand to attract the best talent.
Bishop joined Ricoh in 2008, after a career in agency recruiting, joining from sales recruiters Robson Taylor Selection. Bishop had spent over 7 years working in the sector before moving to the corporate sector, and it is this background that has clearly influenced his thinking since joining, reflected in the teams proactive approach to sourcing talent.
When Bishop arrived at Ricoh, agency spend for the year 2008 – 2009 was £2Mn and 675 hires. Very little hiring directly, and calling an agency, any agency was the default process for hiring managers. During the same year they had used 124 different agencies, had no formal agreements in place and had terms that ranged from 15% of the annual salary to 35% of the total package.
It’s no surprise agency hiring was the only real option. There was no career site,presence in any social media including LinkedIn. and no dedicated recruiters. The business had no local employer brand presence at any of their locations, and no means for candidates to apply should they chance on the business. The average cost per hire was £3,600.00
Bishop drew up a plan for year one to bring recruiting in-house, which meant extensive negotiations with the Ricoh board to convince them to change what they had been doing for some years. This started with the hiring of 3 additional recruiters, one to focus on sales and two for general hires, including the call centre. Bishop’s plan was not to cut out agencies completely, but to operate in a more controlled way. This was achieved by introducing a P.S.L. with specific areas of focus and speciality. Agencies that could add value, rather than purely introduce people.
In year one agency hires were reduced from 82% to 30%. The additional 70% of hires were achieved by adopting a mix of direct headhunting, launching a careers section to the corporate site, job board advertising, introduction of an employee referral program for the first time, and raising the local employer brand. The result of Bishops efforts for 2009/10 was the reduction of the average cost per hire to £945 over 675 hires, equating to a saving of £1.3Mn. No small change!
The year two focus for 2011 was a greater emphasis on direct sourcing approaches. Bishop compares this to operating as an agency only in-house, with the added benefit of being able to capitalise on employer brand and tell their own story. As a result of the savings and improved efficiencies in year one, the team took on additional responsibility for all the temporary staffing within the business giving them control of all staffing.
Another of the benefits that Ricoh have realised as a result of direct sourcing and greater control of the hiring process has been significantly improved retention, reducing the need to 375 hires. During 2011 Bishop placed greater emphasis on sourcing via LinkedIn, and latterly Facebook. The team use LinkedIn recruiter accounts to identify potential new hires and make approaches via InMail and calls. The latest addition to the team took on the responsibility for locating talent and approaching them via Facebook, with this channel now representing 40% of their individual hires, and is a channel they are looking to utilise increasingly in 2012. These initiatives during 2011 further reduced the cost per hire to £498, representing a total saving close to £3Mn over two years, as well as greater efficiencies and retention rates.
What I think is different about this story is that it has been achieved by adopting a just in time sourcing approach without yet committing to a social approach for talent attraction, although this is coming during 2012. A business needs to be ready for a longer term approach to adopting pipelining. The results of the last two years show the foundations are in place, as well as the support from the business that comes with tangible results. During 2012 Bishop and his team will be taking on responsibility for hiring throughout Europe, proving the benefits that can be achieved by adopting an agency approach in-house.
Bishop will be sharing the Ricoh UK story in the direct sourcing track at #trulondon on the 22′nd and 23rd Feb. You should join the conversation!