Value for Money (VfM) in Project Resourcing

One of the ongoing challenges of recruiting project management practitioners is the desire for the hiring organisation to achieve Value for Money (VfM). This is especially so in the work we undertake in the Public Sector where VfM in some organisation seems to equate to the cheapest available resource!

The National Audit Office (NAO) suggests that VfM is about “the optimal use of resources to achieve the intended outcomes. ‘Optimal’ means ‘the most desirable possible given expressed or implied restrictions or constraints’. Value for money is not about achieving the lowest initial price.”

They go on to explain that VfM should be considered in the context of Economy, Efficiency and Effectiveness of the money to be spent, whilst bearing in mind the desired quality.

So how is this impacting effective recruitment?

Let’s say that the hiring organisation has looked at their requirements for a contract Project Manager who will be engaged on a critical project, for a period of six months. Looking at the market and their available budget they have arrived at a maximum daily rate of £500.

In good faith the requirement is then passed to the recruitment department, be this HR or a third-party RPO (Recruitment Process Outsourcer) to weave their magic and provide a shortlist of suitable candidates. The leap of faith being that the recruitment department will assess all candidates against the given criteria, including day rate before providing a shortlist.

Unfortunately, we see many instances where the recruitment department then decide to add their own VfM criteria to their task when reviewing candidates and shortlisting. This may be a personal decision, one driven by their measures or in some instances driven by their rewards (some RPO’s are rewarded on the cost savings between advertised rate and fulfilment rate!).

So a shortlist is created based on an interpretation of the requirement and extra VfM assumptions; which presumably had already been applied when the original requirement was identified and costed at £500 per day. The worst case we have seen is the shortlist being created based on the five candidates requesting the lowest day rate, with no regard for their suitability or capability!

The hiring manager may get lucky and find a suitable candidate, more likely is that the process will have to be repeated leading to significant levels of re-work and added cost in terms of wasted time as well as potential delays or impacts to the project (opportunity cost).

How can I prevent this from happening?

As the hiring manager ensure that you have a conversation with your recruitment partner:

  • Explain that you have undertaken a VfM analysis in setting the budget at £500/day.
  • Ask what key criteria they will be applying when they shortlist.
  • Set expectations that you wish to see suitable candidates in a range of costs around the £500/day.
  • Request a summary of why each candidate has been proposed.

These simple steps, which Arras People apply during their selection process, will have a significant impact on the effectiveness of your recruitment process.

Your recruitment partner may not be happy, but they will soon realise that you take recruitment seriously. They could even increase your overall VfM if you spot a real talent at a lower cost and avoid that unnecessary rework!

 

project-resourcing

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