Looking for a strategic solution that would support all of HR’s stakeholders at BloodCenter of Wisconsin, Ildiko Huppertz, Director, Human Resources, chose to outsource. Here’s why: The hiring managers were dissatisfied with their recruitment process. The applicant pool was too small and the quality of candidates was poor. Additionally, it took too long to fill a position–up to 100 days when it should have taken just 45, she says.
BloodCenter of Wisconsin, which is the only supplier of blood to over 50 Wisconsin hospitals, knew it had to do something. So its executives talked to Pinstripe, a recruitment process outsourcer (RPO) that has a division that specializes in healthcare. “We work with healthcare organizations to improve their talent acquisition and management systems. This helps them reduce their overall labor costs and improve efficiencies,” says Jill Schwieters, EVP and leader of Pinstripe’s Healthcare Group.
To see if outsourcing could give BloodCenter the transfusion of talent it needed, it decided on a pilot. Huppertz says the HR department selected the donor services department and contracted to have Pinstripe recruit 40 employees from July to June 2006. These were high-turnover positions, having one of the highest costs per hire of any job at BloodCenter. And the hiring manager’s job satisfaction scores had hit bottom.
“If Pinstripe could fill these positions quickly, we knew we’d have a good return on investment,” says the HR Director.of BloodCenter, which also provides diagnostic laboratories services nationally and operates the internationally known Blood Research Institute.
Pinstripe, which completed its transition, proposed a new recruiting process. Then it upgraded the applicant tracking system. The recruitment partnership found qualified people to fill all 40 positions–the first time in several years there was no vacancy. After six months, only four of the new hires had left–a 90 percent retention rate.
The HR department surveyed the hiring managers before Pinstripe entered the picture. Then the hiring managers filled out surveys quarterly thereafter. The satisfaction scores improved markedly because Pinstripe culled out the best candidates and only sent the top two or three to meet the hiring managers. In addition to high-quality candidates, Pinstripe was responsive and delivered high quality customer service.
Hiring costs fell markedly. Huppertz says outsourcing reduced the cost per hire 57 percent, The HR director points out that the time to fill almost met that level of savings as well.
“Cost savings are crucial to the financial health of healthcare organizations because they typically operate with very thin margins,” says Anne Nimke, Pinstripe Co-Founder and Chief Marketing and Business Development Officer. “Typically the chief financial officer gets involved in most outsourcing decisions.”
Pinstripe also automated the process. Huppertz says the BloodCenter had a paper-intensive recruitment process; the HR department routed paper requisitions and resumes to the appropriate managers. They only posted job requisitions once a week.
Automating the Application Process
Pinstripe’s system is real time. Managers post their positions electronically and can submit them the minute they need to fill a position.
Before, an applicant could apply at BloodCenter’s Web site, but it was a three-step process. The HR department printed out the resumes for evaluation. “This process was killing a lot of trees,” says Huppertz.
Now applicants can apply directly at the Web site, which uses Pinstripe’s technology. They have to answer specific questions. And they now get automatic responses from BloodCenter based on their responses. Pinstripe’s process culls out the mismatches and only sends BloodCenter candidates who are a good match.
In the past, BloodCenter had to interview four candidates to find one it wanted to hire. Today Pinstripe is finding much better candidates. Now managers only have to interview two people to hire one and usually the second candidate is the next hire. “This saves our managers time because they don’t have to block out time to interview people we’re not going to hire,” says Huppertz.
The technology allows the successful candidates to schedule their interviews online. “Now there’s no lag time,” says the Wisconsin HR Director. “Before, candidates had to wait at least two weeks before we could schedule interviews.” The benefit: a quicker time-to-fill cycle.
Since everything is online, BloodCenter has started to track where the applicants are applying from. “This has led us to other folks,” Huppertz says.
Huppertz says the application tracking system is easy to use. “Their technology enhances our image. It’s helped us brand the center,” she explains.
The pilot was so successful BloodCenter hired Pinstripe to handle all its non-executive recruiting needs. BloodCenter reallocated recruitment staff to other strategic HR functions.
The biggest benefit for BloodCenter: the HR department can focus on more strategic projects instead of focusing on the myriad of details required for recruitment. These new initiatives include launching a new onboarding process and improving the performance management system.
An important new project has been the creation of BCW University, a training institute focused on staff and leadership development. Huppertz says now the company has cured its recruiting challenges, the HR department is focused on improving its retention rate. One way to do this is to “develop the people who are here.”
Huppertz says it’s difficult to recruit in the healthcare field “because there are not enough candidates to pick from.” So BloodCenter’s employment strategy is to focus on retention and development. “That makes people want to stay. It also makes us the employer of choice,” she says.
“It’s our goal to make them competitive,” says Schwieters. “We can’t solve the people shortage problem. But we can help the healthcare organization become the employer of choice, then find and retain the best talent in their market.”
Overcoming Two Challenges
The BloodCenter executive says the change-management aspect of outsourcing was the most difficult. The HR department had to let go of recruiting. And the hiring managers had to learn a new system. “We needed buy-in from both groups,” says the HR Director.
Huppertz says she immediately got her staff to focus on their new, exciting initiatives. They also witnessed outsourcing’s positive results. “When they saw the hiring managers were satisfied, they were happy to let go of recruitment. They didn’t have enough time for everything,” she reports. “The HR recruiters were overwhelmed with recruiting,” recalls Schwieters.
As for the managers, Pinstripe partnered with BloodCenter to teach them how to use the applicant tracking system. But the sessions infused other knowledge as well. Pinstripe executives explained the importance of communicating with Pinstripe’s representative. “They understood they had to make her part of their departments,” says Huppertz.
The executive says the managers were excited about having new technology. “They saw immediately the new technology helped them with the recruiting process.”
The biggest change-management challenge was a change in the interview process. In the past someone from HR and the hiring manager interviewed the candidate together. Now, Pinstripe’s staffer does the culling, leaving the hiring manager to interview the candidate solo. The HR department held separate training sessions on interview techniques. “It was difficult for several of our managers,” say Huppertz. Now, however, they like the new process “because it’s a lot less time consuming for them.”
Huppertz says she values this outsourcing relationship; she includes the Pinstripe rep in many staff meetings. Pinstripe provides a monthly update and produces strong reports. “I view Pinstripe as an extension of my team,” she says.
Pinstripe’s Value Proposition
Co-founders Nimke and Sue Marks were part of the coterie that founded the RPO segment in the early 1990s. In 2000 they sold their RPO firm and Wisconsin’s largest staffing organization to a Fortune 500 staffing company.
Most RPO firms focus on the acquire and hire parts of the recruiting process. Pinstripe includes two other aspects: sourcing and engaging. Currently their value proposition, christened Requisition to ResultsÆ (R2R), has 1,500 distinct processes. “It’s our belief that the real success of recruiting is the success and retention of the employees placed–not just the filling of the job,” stated Nimke.
Lessons from the Outsourcing Journal:
- There is a shortage of qualified talent in the healthcare field. That makes it difficult to recruit. BloodCenter of Wisconsin decided to focus on training and development to retain the good people it has. It could do this because it outsourced the time-consuming task of recruiting to a recruitment propcess outsourcer.
- Technology that automates the recruitment process produces better candidates and saves time for hiring managers because they only have to interview the cream of the crop. Technology also helps develop new channels to ferret out talent.
- Outsourcing recruitment saves money two ways: it can cut the cost of recruitment and it can allow the HR department to devote fewer people to the task.
- Change management is a crucial key to success. Both the buyer and supplier have to get buy-in from the hiring managers and the HR department. It’s easier to help the HR department let go of recruiting if they have exciting, important new work to do. Training the managers in new processes is a must.