Staffing UnitedHealth Group Tom Valerius, the vice president of recruitment serv

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Staffing UnitedHealth Group

Tom Valerius, the vice president of recruitment services at UnitedHealth Group, was rightly overwhelmed in early 2001. He was facing a massive staffing effort. 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. For many companies faced with such decisions, the logical conclusion is to outsource the staffing function, thereby easily disengaging services when staffing needs are met.

Not so at UnitedHealth Group. Their concern was that by outsourcing recruitment and selection they might lose control of this critical function. As a solution, they decided to segment 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 the call centers—would be staffed by outsourcing specialists. The logic behind this two-pronged approach was 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.

In addition, the company decided to centralize its staffing operations. Since UnitedHealth first brought the recruitment of high-impact positions in-house, its expenses have dropped to $2 million—a savings of $10 million.

Discussion Questions

1. What do you think about the decision to centralize the selection function? What role do you think managers play in this approach to recruitment and selection?

2. Do you agree with the logic to outsource lower-level positions?

3. How might outsourcing the recruitment/selection function affect the methods used to select people?

4. How can you use these concepts in your future career?

Staffing UnitedHealth Group

Tom Valerius, the vice president of recruitment services at UnitedHealth Group, was rightly overwhelmed in early 2001. He was facing a massive staffing effort. 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. For many companies faced with such decisions, the logical conclusion is to outsource the staffing function, thereby easily disengaging services when staffing needs are met.

Not so at UnitedHealth Group. Their concern was that by outsourcing recruitment and selection they might lose control of this critical function. As a solution, they decided to segment 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 the call centers—would be staffed by outsourcing specialists. The logic behind this two-pronged approach was 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.

In addition, the company decided to centralize its staffing operations. Since UnitedHealth first brought the recruitment of high-impact positions in-house, its expenses have dropped to $2 million—a savings of $10 million.

Discussion Questions

1. What do you think about the decision to centralize the selection function? What role do you think managers play in this approach to recruitment and selection?

2. Do you agree with the logic to outsource lower-level positions?

3. How might outsourcing the recruitment/selection function affect the methods used to select people?

4. How can you use these concepts in your future career?

Explanation / Answer

The disadvantages of this approach are:

Managers are completely alienated from the centralized selection as the in-house recruiters do the whole recruitment process. The managers understand the job better and would have been beneficial to judge the job fit.

2.Yes, I completely agree with decision to outsource lower-level positions. These positions do not require critical competencies and so a recruitment agency will be able to fulfill the selection objective of the company. This saves time as well as money of the business.

3.The outsourcing agencies are given the selection guidelines, which they need to follow. The agencies are contract based, so they try to fulfill every selection criteria, as prescribed by business to keep the candidate conversion rate high. The recruiting process effectiveness is overall improved.

4. The main concept shared in this case is how the business should concentrate on the core activities and outsource the non-core and non-critical activities to external specialists. This way, efficiency of core business is improved and the overall effectiveness of the non-core activities is also looked upon.

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