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The cost of hire is important, but not the most important KPI

Samskip is originally an Icelandic company that was established in 1990. Samskip has grown into one of the largest container transporters in Europe. In 2011 Samskip has more than 1000 employees in 20  different countries. The European establishments of Samskip were responsible for all recruitment. Elaine Pelisson (HR Director) is  along with two assistants responsible for Samskip’s recruitment activities. The average European recruitment requirement in 2011 and 2012 was between 40 en 50 vacancies.

Halfway 2011 Elaine Pelisson decided to move from an agency led recruitment strategy to a direct recruitment strategy. The most important reason for this switch was to reduce the recruitment expenses on the external agencies. Additionally Samskip wanted to be more in contact with candidates and have a better feel for selecting the right candidates. According to Pelisson;

“Self-recruitment equals freedom. You can always still employ an agency.”

In May 2011 Samskip set an objective to recruit their own candidates for open vacancies. Where third party agencies offer a small selection of candidates, Samskip was very curious about the quantity and the quality of the available candidates and started their own search.

“Some agencies charge 23% of the annual salary. I wanted to know which candidate was available”

As Elaine was going to recruit directly, Samskip’s vacancies had to stand out of the crowd. Via a job marketing campaign and a dedicated Google optimised careersite  a lot of applications were generate in a very short period. The first thing that Elaine noticed was the amount of candidates that were interested in a career at Samskip. It was a first step and Elaine started to increase her time to recruit more vacancies directly. She is now responsible for the recruitment and selection that was previously done by agencies. On average this costed her and her colleagues approximately 5 hours per day for all vacancies.

“One of the first vacancies that I did myself was a sales position in Italy. I had published the vacancy on 3 job boards. Within 1 week I received 78 applications. In order to process this number of applications we had to adjust the administrative process.”

Since April of 2013 Elaine is managing her recruitment process with the use of Qandidate.com, VONQ’s free recruitment system. Because she can now create and manage the vacancies from one place, she has generated a saving of 2 hours and is now spending on average 3 hours per day with recruitment. This has saved her 40 percent of her time.

The cost-per-hire decreased enormously from the moment that they moved to a direct recruitment strategy. This has resulted in a cost saving of 32% compared to the previous situation. Considering her average recruitment needs of 40 – 50 vacancies per year, this is a substantial saving.

This cost saving was an important reason for Elaine to handle the recruitment process herself. Apart from this cost saving she also had a better view of the quality and the number of available candidates. “Because I now recruit myself I can also recruit more pro-actively.” By using Qandidate.com she can also create better reports for the stakeholders. Qandidate.com also enables her to keep a close eye on the performance of vacancies on the job boards, and she can see in real time how many applications were generated for every vacancy.

Through this new method Elaine can also work more pro-actively. It often happens that she fills multiple vacancies with one and the same job marketing campaign. This leads to an additional cost saving.

Conclusion

Within one year Samskip has completely switched from an agency-led recruitment strategy to a direct recruitment strategy. An important success factor in this switch is the use of the right tools. Both in the way you communicate with candidates (Google optimized career page) and in the way you handle your recruitment administration (Qandidate.com). This change has resulted in more knowledge about the labor market and the available candidates in the market. Samskip now also has a stronger employer brand and a lot of expenses were saved. Samskip hereby proves that it is definitely possible to make the switch from agency-led to direct recruitment strategy.

Ralph Brasker
Chief Marketing Officer at VONQ