BTR, SFR Uses Recruitment Process Outsourcing as a Way to Scale Hiring
Recruitment process outsourcing brings top-notch candidates without having to add FTEs to the HR department.
Greater housing demand nationwide and the need to quickly find qualified labor to build and manage these homes and properties has most housing operators practically at wit’s end.
In expedited ramp up mode, they must find qualified and long-lasting employees, especially in the unique operational model that are the build-to-rent (BTR) and single-family rental (SFR) sectors.
“In the SFR industry, when you’re looking to open in new regions, it becomes a land grab; everyone wants to get in first, so you have to staff up quickly,” Andrew Bartlow, former Chief Human Resources Officer at Waypoint (later Invitation Homes) said.
This property management model includes multiple rooftops, and homes located all over a given market, miles apart,” Bartlow said. “Hiring at greater speed is crucial.”
When facing these circumstances – and staffing for apartment management and development companies as well – companies often have one or two in-house recruiters and rely on “a motley collection of recruitment contractors to do the staffing work,” Bartlow said. “Some were paid hourly, others by project, and others worked only for us.”
But this strategy doesn’t always work fast enough, and frustration can lead to seeking a new way.
Bartlow became a proponent of recruitment process outsourcing (RPO), which brought “instant infrastructure to our process of recruiting, getting headcount approved, and consolidated our candidate contact system.”
Additionally, he said using an RPO proved cost-neutral to what he had been doing, “and it worked better, because the process was centralized so we had more control, and it was professionally managed versus being simply a small part of a broader HR job.
RPOs at the Ready When They Need to Be
RPOs are typically hired on a project basis. Companies can “push or pull” their needs for RPO work based on when they need them.
To simplify the process and to create greater efficiencies, RPOs generally have the same access, take part in calls and prospect screening and make offers as the company’s HR or recruiting teams.
RPOs create a funnel of candidates and are generally more aggressive in going after candidates than an internal team. RPOs might be making 20-30 recommendations at a time.
“Because the RPO approach can be turned on or turned off, there’s less financial (payroll) risk,” Bartlow said. “You aren’t paying for a full-time recruiter during periods where you aren’t hiring and even times when you are laying off workers.”
Licensed Electricians, Plumbers Toughest to Hire
Currently, Bartlow sees that the competition for skilled, blue-collar workers – such as licensed electricians, plumbers, etc. – has never been greater.
“Making things even more difficult is the rising number of these workers who are happy to work on their own, for themselves,” Bartlow said. “The current tax code can benefit workers taking that approach.”
RPOs Deliver ‘Solid ROI’
Janice Stack is a former housing sector HR executive, is HR Partner at TalentWoo, which focuses on hiring for the housing market. She said RPO companies are an extension of their clients’ HR or recruiting teams and can effectively build long-term relationships within those companies.
“They help solve recruiting challenges by providing the people, tools and processes that allow the HR department to deliver a solid ROI, often less than 15% of total compensation hired,” Stack said. “And, depending upon the volume of hires, it can be much lower.”
When working at American Homes 4 Rent (AH4R), Stack helped the company grow from 200 to 1,350 employees in four years.
“We also restructured as we grew, initially hiring teams to buy, then lease, then ultimately to manage and rent the portfolio of single-family rental homes,” said Stack, who used TalentWoo then to hire approximately 400 people per year.
“Having an internal hiring team can be great, but many don’t have the breadth of skill and may be uncomfortable making cold calls as part of their sourcing strategy,” she said.
Teaching Recruiters to ‘Not be Afraid’
“RPOs such as TalentWoo teach their recruiters how not to be afraid,” Stack said. “They must be able to reach out to potential candidates and sound conversational, not sales-y.
“For all of our clients, we also actively manage their employee referral programs. Once one of our clients has hired someone, and they come to like the job and company, we ask them to reach out to peers to encourage them to come on board.
The commission rates and structure for an RPO differ from those of a staffing agency.
“Most contingency firms charge 18% to 25% of the first-year compensation,” Stack said. “Some companies assign the position to more than one agency and those then end up competing for the same pool of talent.
“If a company uses a retained search firm, typically reserved for executive level roles, they can expect to pay 33% of total compensation. RPO provides the benefits of retained search for the roles that a company regularly recruits for at a fraction of the cost.”
Hiring for More than Just Experience
Aaron Noe was AH4R’s executive vice president of operations several years ago and needed to scale up staffing nationally and at the corporate office in Las Vegas. AH4R had 52,000 homes in 22 states.
At first, Noe tried to build a recruiting team from within, “but that became too much of a burden on those staff members.”
TalentWoo helped him to hire property managers, leasing agents, service techs and superintendents.
“Back then, as the economy was improving, it became harder and harder to hire,” Noe said.
“TalentWoo took a very mindful approach. Its team considered candidates for reasons more than just experience, but how they would fit into our culture. We wanted people who would take pride in their jobs and stay with us at the company. When you can hire people like that, your retention rates will improve.”
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