Thursday, 10 October 2013

Hiring Locally vs Relocations

Should I recruit more locally? Thoughts from the Worcestershire LEP conference 1

I was talking with a HR manager today at the Worcestershire LEP conference about their hiring practices and recruitment when we touched upon the topic of localism and CSR; not your usual recruiter speak I know but I thought I would pen some thoughts that might be of use to other HR managers. 

1.     The Benefits of hiring locally:

1.1  Reduces Greenhouse gas emissions and improves health for workforce through the promotion of walking, cycling and car-sharing. Reduces stress in employees with long commutes.
1.2  As mentioned in Bowling Alone: The Collapse and Revival of American Community (reference) each additional ten minutes spent commuting leads to a 10% decline in all areas of civic engagement; if you are a small village or town this can have a major impact.
1.3  Keeps money invested in the local community. The salaries you pay are likely to have a significant impact on local businesses; a multiplier of 3-4 would not be uncommon. When Longbridge in Birmingham shut down overnight, so too did many small business.
1.4  Fosters an engaged workforce through social activity. If a significant number of your workforce live close to one another they are likely to develop more engaged social networks.
1.5  No relocation costs. 
1.6  Reduced turnover of staff.  One of the key reasons people leave a job is that they are “fed up” with the commute, and whilst the age of homeworking is still developing, hiring people locally who are committed to the workforce and area will have a key impact on attrition.
1.7  On-going attraction. Referrals and attracting former colleagues are key factors of hiring in today’s economy.  Hiring local people means that they are more able to do this (unless you are a football manager and able to bring whole teams with you!).
1.8  Locals job-search locally.  People often begin their search for work locally resulting in the lower search costs on both sides and consequently, a greater chance of success in hiring and finding a new role.

Lots of positives for companies here to hire locally, far more than I had initially thought however before I get too carried away with the localism agenda, perhaps some thoughts on the disadvantages first.

2.     The Disadvantages of hiring locally

2.1  Restricts the supply of workers to the organisation. This can be especially important if you are in a service or creative industry using skilled workers that are hard to find.
2.2  May mean the local community are too reliant on one employer, as seen throughout the North of England when coal mining was shut down in the 1980's.
2.3  The costs of hiring may increase as the supply of labour within a radius goes down and employees bargain for greater salaries or rates. This can certainly be seen in London currently as salaries rise for particular skills sets especially in programming or programme management.
2.4  Settling for the available talent and missing out on the best talent.  Research has shown that recruiting top performers has a greater than expected impact on company productivity and growth.

3.     The impact upon your recruitment options

3.1  The type of job.  If the job is a permanent hire then going locally may be the better option; conversely contractors and FTC or temps may be able to travel more if the rate is higher.
3.2  The skill set needed.  If a job requires a particular skill set or expertise then you may need to look further afield, particularly if the role holder is a very rare skill.
3.3  Commuting.  Have you looked at travel time?  What would you call local? In London local may mean within a 1hr commute which can be as far as Brighton.  However, for somewhere like Worcestershire this might mean Central Birmingham to Bristol? Use tools like to work out what are realistic commute times - you may be surprised!
3.4  Location. What is your location? Do applicants have to drive? Could they walk, cycle, take the bus or train? This may have a major impact on whether you are able to go further.   Recruiting in city centres may be a deterrent to drivers given the traffic delays yet may also attract more candidates as they will be better served by public transport.
3.5  What is the competition? If you work in a particular market or industry segment that requires specific skills i.e. optoelectronics or software programming, do you know where to find other sources of talent?
3.6  What is the level of the role?  The more senior the role the more likely you are to have to widen the search area unless you are in a major city. Even then I would argue that the more important the hire the less location matters and the more the emphasis is upon getting the right candidate.

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