Advice‐seeking and advice‐utilization for hiring decisions: An investigation of a partially outsourced recruitment process for rank‐and‐file managers

Abstract

We study a large-scale, partially outsourced recruitment process. A specialized consultancy assesses applicants' soft-skills on behalf of a client firm, who retains agency over the hiring decision. We conceptualize this collaboration as an advice-seeking, advice-utilization process and analyze the effectiveness of hiring recommendations provided in influencing the client's hiring decisions. Two external HR specialists not only differ in their soft skill ratings, but also differ in their aggregation of these ratings into their hiring recommendations. The consultants' recommendations are particularly helpful in separating very suitable from clearly unsuitable candidates but are less effective in the mid-tier of the skill distribution.

Housekeeping Staffing Alternatives: Contract Employees or Hire Full-Time

“…Companies began to substitute temporarily for permanent employees to cut costs in payroll administration and fringe benefits and gain greater flexibility in the face of changing business conditions. The importance of recruiting scarce talent was highlighted, and recruitment process outsourcing (RPO) was one of the fastest-growing consulting services, with global growth rates of 22% from 2013-2015, 14% from 2015-2017, and 3.3 billion US dollars in contract revenue in 2017 (Fabel et al, 2020).…”