The Priority Triangle: Speed. Quality. Cost.

TA Operations 101: You cannot have all three components of the Priority Triangle. You must choose to focus on just two and accept a deficit in the third.

In 2022 and 2023 TA Leaders were given a clear mandate which will continue into 2024: significantly reduce operating costs and find in-year savings to help navigate challenging budgetary pressures across the organization. The Priority Triangle dictates that to meet this mandate TA Leaders must give up on their key operational KPIs, like time to hire (speed), or accept a diminished recruiting experience for both hiring managers and candidates (quality).

But what if that wasn’t true? What if you could have all three components – a TA function that delivers quality candidates aligned to business demand, a quality journey that supports a differentiated TA experience focused on the right candidates at the right moments, and a TA function that is a consultative enabler of wider organizational strategy, all delivered within a landscape of reduced TA operating costs?

Thanks to the rapid rise in the complexity of automation and AI outcomes, and by striking the right balance between tech-enablement, people-organizational design and an efficient operating model, some TA leaders are now delivering all three components of the Priority Triangle. The result is significant operating cost reductions that satisfy transactional budgetary pressures, while delivering better quality strategic recruitment to serve increasingly complex business demands.

What are the 6 key focus zones to drive down costs while increasing value?

1. People: the right resources, doing the right task, and the right time and in the right locations. For many TA organizations, ‘People’ can account for as much as 45-55% of total direct operating outlay in staff-costs alone, but there is also a significant additional cost in how and where you organize your teams. Repeatable administrative tasks conducted by highly-paid recruiters in high-cost locations can increase your transaction cost by as much as 35-40%, with no additional productivity benefit to justify the surplus cost. Ensuring the right tasks are conducted by the right people is critical to a cost-efficient TA function, as is the right location strategy. Offshoring or nearshoring is a very effective way to reduce costs, especially if your organization has the infrastructure already in place. Where this doesn’t exist, outsourcing the whole recruitment process or specific expertise areas like Sourcing, is an effective option. It has the added advantage of moving fixed costs to variable and distributing risk. AMS clients have seen in-year savings of $11 million through this lens alone. Importantly, staff cost reductions do not need to mean overall headcount reduction. Most of the time it’s about freeing up your team to focus on high value activities while making savings behind the scenes.
2. Process: an agile workflow that can deliver differentiated experiences within a globally consistent framework. Your workflow should be fully focused on the intersection between efficiency and experience. How you deliver volume-hiring should differ from how you deliver hyper-niche recruiting in candidate-led markets. Delivering the right level of experience for different hiring types can yield big operational gains, which can in turn drive direct cost-savings through better efficiency of as much as $1-2million, alongside the opportunity for headcount rationalization or re-purposing.
3. Technology: tools and platforms that enable your people and process, not vice-versa. The future of TA is enhanced relationship-building so leverage technology to reduce repeatable administrative tasks through automation and enable your people to make smarter decisions with the support of AI and data. Technology often comes with the largest investment, but it doesn’t have to. Assess what technology you have in-play today and identify the opportunities to maximize that through available and new release functionality. If your tech-stack doesn’t deliver what you need, then a new vendor might be the right answer, but your tech transformation can be cost-free if you can identify additional cost-savings elsewhere. By covering your change costs by in-year savings, you enable all future efficiency gains, driven by your new technology, to be entirely upside.
4. Engagement: Brand, marketing and attraction spend is higher than ever, but ROI isn’t keeping up for most TA organizations. It’s been historically difficult to track return-on-investment for marketing and media spend, with such a wide range of vendors and tools in-play. As a result, many TA functions can identify significant underproductive overspend in this area. Leveraging the right tools and accessing the right data can put you back in control, reducing your overall spend while improving outcomes against the objectives you really desire. With most organizations see investing in their EVP as a priority (a good thing!), the market is now swamped with organizations saying very similar things. Differentiation is a challenge, but it is vital to how you engage and convert talent. Being more meticulous and strategic with your overall spend in this area and redistributing your spend towards strategically important talent segments (such as digital skills) through dedicated talent-value-propositions (TVP) can help your investment go much further, without increasing your overall spend.
5. Hidden operating costs: Some are difficult to find because…well, they’re hidden. For example, shadow talent acquisition activity happening elsewhere in the business and outside of the TA team.  Others are hiding in plain sight but can be tricky to quantify. For example, do you know how much it is costing the business in lost revenue when Time to Offer is +3.5 days for a Sales role? Do you know how much cost you’re incurring through TA workflow wastage?Identifying your hidden costs provides you with a true assessment of your operating costs. In some cases, these costs can represent as much as 10-20% of additional costs which were previously unallocated (sometimes even more!). This can be a powerful tool when you’re creating the business case for change, putting you in control of the conversation demonstrating overall costs across the organization, and a real yardstick by which to judge success post-transformation.
6. Agency costs: an important partner when used strategically. No successful TA model entirely eradicates Agency usage and spend. Most optimized TA functions partner with search firms for between 6-8% of total hires, leveraging a select group of well-governed strategic partners for specific pre-identified demand.Identify the select roles where search firms can deliver where you cannot, and free your teams to focus on developing dedicated strategies to tackle everything else. Thinking holistically and more strategically about how you fulfil overall business talent demand places you right at the center of your organization, alongside offering the opportunity to save significant costs. Whether the budget is owned by TA or by the business, organizations can save as much as $5-15 million annually – depending on the average Agency fees in given markets, geographies and sectors - by focusing on direct sourcing efforts either by bringing them in-house or outsourcing to a recruitment process outsourcing partner. This saving category often provides any immediate early funding needs on TA transformation activities.

What comes first?

Simple: the business case. You need to shape the internal conversation for investment. You can deliver the cost reductions required, but in order to do so you need to drive strategic change within the TA function that will also deliver long-term additional value. It’s win-win.

AMS has partnered with many global-leading organizations to develop compelling business cases for change. Contact us to learn how you can get buy-in and sign-off for the strategic change you’re seeking to drive as a TA leader.