Tom Valerius, vice president of recruitment services at UnitedHealth Group, sat in his Minnetonka, Minnesota, office in 2001 wondering how he would meet his company’s voracious staffing needs. By his estimates, more than 40,000 employees would have to be hired in the coming years to meet strategic business goals.
With six corporate divisions and a presence in all 50 states, this would be no small task. "I thought to myself, ‘I can have an internal recruitment staffing function of over 200 people, or I can do something smarter,’" Valerius recalls.
Ultimately, he opted to revamp the company’s recruitment operations. The process began by segmenting hires into two categories: those who would be staffed by an internal recruitment team, and those who would be recruited through outsourcing partners. Under the new strategy, in-house recruiters replaced search firms to fill decision-making positions, such as managers and executives with salaries of $100,000 or more. All other openings--in information technology, administration, consumer services and call centers--would be staffed by outsourcing specialists, including Hyrian and StraightSource.
The logic behind this two-pronged approach is that UnitedHealth could maximize control over the quality of candidates in influential posts, while at the same time reduce expenses by filling mass staffing orders with outsourcing partners--a more cost-effective method. Every position is important, but when you have to fill 700 jobs you can’t be as discriminating about each position, Valerius says.
He drew from his previous experience in business development to negotiate with outsourcing partners. The contracts were structured on a volume basis, which means that the higher the staffing order that UnitedHealth places, the lower the price tag per capita. "This principle is no different than what happens at the retail level," Valerius notes. "You can get better prices for paper towels at Wal-Mart because of volume. They are moving volume."
In addition, the company centralized its staffing operations. With the help of Taleo, it was able to eliminate redundant work and infrastructure costs across its six divisions. This required adopting new technology and automating 105 human resource functions. The result was a leaner recruiting team, which was trimmed to 30 members, an 85 percent reduction. By streamlining its operations, UnitedHealth was able to save about $1 million on overhead during the first year alone.
But the biggest financial payoff has come from the savings in recruiting-related activities. Since UnitedHealth brought the recruitment of high-impact positions in-house, its expenses have dropped to $2 million--a savings of $10 million. Much of the cost reductions are attributed to the dispensing of search firms, which charged exorbitant fees.
Today the company is able to hire more people at a cheaper rate, paving the way for rapid growth in the near future. UnitedHealth plans to hire 18,000 staffers this year and an additional 19,500 in 2007.
"We are providing the fuel for the rocket to fly," Valerius says.
For its proactive efforts to meet its future staffing needs, UnitedHealth is the winner of the 2006 Optimas Award for Vision.
|THE MINNETONKA, MINNESOTA-BASED company is one of the largest providers of health services in the country, serving about 65 million people nationwide. UnitedHealth received the top spot in Forbes’ 2005 list of most admired health care companies. It has 40,000 employees.|
|UNITEDHEALTH GROUP is a diversified health and well-being company with six operating businesses: UnitedHealthcare, Ovations, AmeriChoice, Uniprise, Specialized Care Services and Ingenix. The company posted revenue of $45.37 billion in 2005 and is ranked No. 40 on the Fortune 500.|
Workforce Management, March 13, 2006, p. 30 -- Subscribe Now!