Centralized recruiting is the process whereby all direct hire creative staffing decisions are made by one human resources team within a company. Corporate recruiters working for a centralized team oversee the entire recruitment process for all new hires across all departments. The centralized recruitment model has become standard practice across most large corporations for a number of reasons. According to an ERE Media article, centralized recruitment to streamlines the process, makes hiring more cost efficient, keep recruitment consistent across the board and even eliminates bias.
While the benefits of this model are clear, especially for large business operations, there are also a number of downsides to consider. If your operation is small or specialized, it may be wise to decentralize the process. This usually involves moving hiring managers to each department, so they can make these specialized hiring decisions independently. Decentralizing recruitment may also involve the assistance of a niche staffing agency. Below are reasons why a centralized recruiting model may not be the best option for your company:
1. Lack of Position Information
While the HR professionals working for a centralized recruitment team will likely have a wealth of knowledge about best hiring practices, they still may lack more specific knowledge about the position they are filling. Lack of position knowledge occurs because centralized recruiters have to fill openings across all departments, leaving little time to understand the needs of each specific department in depth. As Chron explained, the centralized recruiter does not work alongside the new candidate in question. Subsequently, he or she could end up selecting and ultimately hiring a candidate who is not right for the role – either due to a personality clash with the company culture or a lack of necessary skills.
“80% of companies enlist the services of an external agency.”
With a decentralized model, hiring managers work with a specific team or department, taking the time to learn about its working culture and unique hiring needs. A decentralized model can even be supplemented with the help of a recruitment firm specialized in the department, as it is able to most effectively find the right kinds of candidates for specific needs, due to a wider pool of professional connections and a greater ability to reach passive candidates. So, for example, if a hiring manager is looking to fill a creative position, he or she may consult the specific expertise of a creative staffing agency. According to a survey from Novo Group, 80 percent of companies now outsource the services of an external recruitment agency.
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2. Ineffective for Geographically Diverse Organizations
A centralized recruitment system will likely prove ineffective if your company has multiple offices across a wide geographical area. As AzCentral pointed out, local demands and hiring conditions fluctuate from area to area, and a decentralized hiring process will be able to respond better to the specific local needs of each department. For example, if a job opening arises at a company office in Florida, requiring a quick fill, it is more time-efficient and cost-effective for local hiring managers to make the decision, as opposed to a centralized team based at the organization headquarters in, say, New York City.
3. Needs and Priorities May Shift
In a similar vein to local changes, a centralized recruitment process may not be able to keep up with fast-changing needs and decisions. For instance, several people leave a position or are let go in one month alone. Waiting for a centralized team to begin a job search for all the new positions across the company could prove much less time-efficient. It’s most effective for a departmental team or recruiter, who can anticipate the unique needs of their team, to make the call.
4. It Can Cost More Money
Chron explained that while it can be more cost-effective for a large company to have a centralized team, it is a different story entirely for a smaller operation. Establishing an HR team dedicated solely to making hiring decisions can be costly, and small businesses may not be able to justify such an expense if they do not routinely make new hires.
5. Managers and Executives Left Out of the Decision
With a centralized HR team, managers and executives may feel frustrated at their inability to voice an opinion over any new hiring decisions, Chron noted. After all, a department director will know the unique needs of the department or company better than an HR professional who deals exclusively with general recruitment.
Keeping all processes in one place might seem like the best choice for your organization, but when it comes to recruitment, taking a more specialized approach could be beneficial. To ensure your organization is bringing on the best candidate for the position within the department, perhaps a decentralized approach to your recruitment strategies is just what you need for marketing, creative, and technology hires.
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