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8 April, 2013 Posted by John G. Self Posted in Healthcare, Recruiting
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Cost Reductions and Internal Recruiters

Posted April 8th, 2013 | Author: John G. Self

As many major healthcare systems across America continue sweeping expense reduction initiatives to lower their costs below Medicare because they want to avoid trouble, and not because they are in it, the impact this will have on recruiting is potentially significant.

At this point, for better or for worse, talent management and acquisition is not a high priority in many health systems.  It is right up there with succession planning.  Roughly translated, recruiting is an expense line, not an investment.  The conventional wisdom is that many health systems will begin to shed their internal recruiting overhead over the next 24 months.  There are some health systems that plan to retain much, if not all, of their infrastructure, but the vast majority will not.

Lest you think this is a blog post about external recruiters engaged in some very wishful thinking, you miss the point.  I cannot speak for my many competitors/colleagues but I am very busy today.  No, this is a post to suggest that the dynamics of finding a job will change over the next several years.  In many cities, where large health systems have controlled the overwhelming majority of their own recruiting, candidates will, over time, see a return of external recruiters handling these projects in a variety of arrangements: 

  • Contingency – the health system or hospital will pay only if the recruiter successfully places a candidate.  The contingency firm will get a professional fee.  Expenses incurred in the project will be to the account of that firm.  Contingent firms, most of which offer placement guarantees from 90 to 180 days, will face more pressure to strengthen their accountability
  • Outsourcing – health systems will engage a sole source provider to handle 90 percent of their recruitment needs.  Their professional fees will be tied to performance and the budgets will be designed to reduce recruiting costs by 30 to 40 percent with tough performance metrics governing time to hire, etc
  • Retained recruiting firms — can expect to see an increase in senior level searches but clients will be more demanding in terms of the firm’s value proposition, from the size of professional fees and expense budgets, to the length of the placement guarantee

While this trend will create disruption for candidates who have nurtured relationships with the internal recruiters, there is potentially a silver lining because it will loosen the structure giving more candidates a chance for choice positions. 

This is just another example of where it pays for candidates to be flexible and to build relationships with any number of recruiters.

© 2013 John Gregory Self

© 2020 John Gregory Self

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