4 Ways Talent Acquisition Relates to Productivity and Profitability in European Businesses

In Cielo’s recent survey of 400+ HR Directors and C-Level Executives with Talent responsibility across Europe (UK, Germany, Poland, Czech Republic, Hungary, Netherlands and Belgium), we asked respondents to tell us about the effectiveness of their Talent Acquisition strategy, and how their Talent Acquisition function ties their performance to business results, such as organisational productivity and profitability.

We categorised the respondents into High, Medium, Low Impact talent acquisition functions. No surprise, High Impact functions ranked the best at delivering against business objectives, and they also had the highest levels of productivity and profit.

The survey findings pointed to a correlation between investing in a Talent Acquisition function and increasing profits by up to 20%. Further, the data showed that as a Talent Acquisition function matures (i.e., moves from Low to High Impact), so does an organisation’s productivity and profits.

The following facts and figures were chosen to help you create the business case that investing in your Talent Acquisition function will help your company grow:

1) Organisations with Talent Acquisition strategies that help shape business decisions are more profitable.

Only 12% of all survey respondents felt that their organisations were as productive as they could be, and a fifth rated their organisation as being unproductive, meaning there’s huge room for a lot of organisations to improve their output.

However, High Impact Talent Acquisition functions that were effective at shaping business decisions had the highest level of profits and productivity. In fact, 31% of High Impact Talent Acquisition functions said they felt they were operating at maximum productivity.

2) A healthy respect for your talent team helps your business grow.

It should not be a surprise to you, but how valued and respected Talent Managers feel correlates to how productive and profitable the business is.

The most profitable organisations have the highest respect for their Talent Acquisition teams, with 47% of those surveyed at High Impact Talent Acquisition functions saying their Talent Acquisition Leader is highly respected, indicating that these teams/individuals have built partnerships with key stakeholders.

3) A proactive approach to Talent Acquisition saves time and money.

A tactic High Impact Talent Acquisition functions use to be proactive, and therefore more efficient and productive, is creating talent pools across business areas.

Creating and maintaining talent pools helps organisations tailor their resourcing needs by region and skillset. Neither Medium nor Low Impact Talent Acquisition functions are active in this area, making it a quick win with clear future return on investment for organisations looking to improve their Talent Acquisition function, and their productivity and profitability.

4) Small changes have a big impact.

Going back to basics and investing to improve core recruitment acumen is another good starting point. Even High Impact Talent Acquisition functions report needing to strengthen video and telephone interviewing skills and techniques for investing in keeping candidates warm in between selection and start date.

The need to improve on the basics shows there is a viable business case to invest in additional training, to adopt new technologies or to partner with third-party organisations, such as a Recruitment Process Outsourcing (RPO) provider. It is noted that organisations that partnered with an RPO firm outperformed their peers in areas such as delivering quality hires consistently and demonstrating agility – with the Talent Leaders of these organisations being three times more respected than those not utilising RPO.

The average organisational profit margins of the 122 respondents who ranked as having Low Impact Talent Acquisition functions was just 18.75%, while organisations with High Impact Talent Acquisition functions had average profit margins of 41.94%.
While Talent Acquisition is not the only influence on the profitability of an organisation, the stark contrast between profits is too strong to ignore – proving that investing in your Talent Acquisition function should be a key consideration if your business is looking to improve productivity and profitability.

The full report, “European Talent Acquisition Trends: Productivity, Profitability and Personal Impact,” goes into comprehensive details on European talent acquisition trends.