It makes sense to think that an organizations top performance priority would receive proportionally allocated funding to achieve its mission. I’m in marketing and my top priority objective is lead generation. Therefore it should come as no surprise that when I prepare a strategic plan and budget forecast that the largest wedge of budget pie sought is to fund lead generation initiatives. That just makes sense.
That’s why the results of a recent HR priority vs. funding survey from BNA took me by surprise. Why would human resources priority vs budget allocation equation be any different?
Case in point: Recruiting and Retention. Human resources executives most commonly cite their department’s performance in recruiting and retaining employees as the primary factor in how top management evaluates HR’s contribution to the organization. But despite the importance assigned to recruiting, budgets are stagnant and the systems deployed are often inadequate.
In the BNA survey, which covers a broad range of HR metrics, 48 percent of HR executives cite recruiting and retention as the top criterion in C-suite assessments of HR’s overall performance. Partnering to implement key organizational goals, often noted as a high priority for HR, falls in second place, with 39 percent of the HR executives citing this factor as the leading factor for management’s evaluation of HR’s contribution.
The BNA study, conducted annually for more than 20 years, is based on responses from 607 HR executives. Despite the softer economy and lower overall employment growth, 34 percent of HR executives identified recruitment and retention as their top priority for 2008, followed by only 13 percent citing strategic planning and management and 12 percent noting training and development. The importance assigned to recruitment and retention varies little by organizational size or industry sector.
Although the priority placed on recruitment and retention is clear, the BNA study reveals a disjuncture between this priority status and actual practices. For example, HR executives are more likely to plan and measure the results of their compensation and benefits programs than their staffing programs.
Fifty-nine percent reported that they regularly track compensation and benefits, compared with 52 percent who regularly use measurement and planning tools for staffing. In fact, Median HR expenditures increased to $1,082 per employee in 2007, up marginally from $1,056 per worker in 2006, according to the BNA study. Although 54 percent of the surveyed organizations reported that they increased HR expenditures in compensation and 52 percent increased spending for benefits, only 44 percent boosted spending for employment and recruiting in 2007.
The same percentage reported they will increase spending for recruitment in 2008.
Forty-seven percent reported that their budget allocation for recruiting in 2008 will not change, and 9 percent reported that it will decline, the largest percentage reporting a drop in spending for any HR task.
In addition, despite widespread coverage of increased outsourcing, recruiting and related tasks remain largely in-house, including tasks that are not part of core recruiting work. HR departments are most likely to outsource background investigations, but only 27 percent report that they use vendors for this work. Only 23 percent outsource drug testing and only 15 percent outsource pre-employment testing.
Recruiting responsibilities for lower-level positions also remain largely in-house. Responsibilities for non-college recruiting rests solely with HR at 53 percent of employers; 39 percent share the responsibility with other departments; and only 5 percent outsource the task. At companies with 2,500 or more employees, 45 percent give HR sole responsibility for non-college recruiting.
HR handles all college recruiting at 41 percent of employers and shares the responsibility with other departments at an additional 25 percent. Interviewing remains a joint effort, with 87 percent of the organizations reporting that HR and other departments share this responsibility.
During the past decade, recruiting has gained greater attention in the C-suite as top executives increasingly realize that corporate growth hinges on hiring the best talent for key positions in the organization. Meeting the mandate for effective recruiting, however, means that HR executives and recruiting directors in many organizations will have to make a successful case for additional resources.
Source: Workforce Management Online, Survey Data Emboldens Cry for Recruiting Funding, by Fay Hansen, August 2008
