Business Case. Revision date Summary of Changes Revised by New Version No.

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1 IT Services Programme Office Business Case Project Name: Online Recruitment Project Initiator: Sofia Avgerinou Division: Human Resources Project Owner: Project Ref: HR Author: Sofia Avgerinou/Nova Larch/Sarah Pedder Date prepared: 1 st November 2007 Revision History this document was amended on: Revision date Summary of Changes Revised by New Version No. 02/11/07 Made calculations and created Sofia Avgerinou/ Nova V.2 Annex B1,B2,B3 and revised after consultation with Mine Tullgren. Larch/Sarah Pedder 21/11/07 R3ef changed HR from HR07002 Brian Young V.2.1 Distribution this document was distributed to: Name Title Date Version Mine Tullgren Business Analyst 22/10/07 v.1 Mine Tullgren Business Analyst 02/11/07 v.2 MIS Steering Committee 05/11/07 v.2 Approvals this document was approved by: Name Title Signature Date Version Alison Johns Head of HR Division On submitted 07/11/07 v.2 paper copy Andy Coulthard Head of MIS v.2 MIS Steering Group 15/11/07 v.2 Page 1 of 10

2 Summary This paper documents the justification for the undertaking of the project, based on the estimated cost of development and implementation, and the risks, against the anticipated business benefits and savings to be gained. The total business change must be considered, which is likely to be much wider than just the project development itself. Project Name: Online Recruitment Project Initiator: Sofia Avgerinou Reference No.: Author: Sofia Avgerinou/Nova Larch/Sarah Pedder Date Prepared: 1 st November Project summary description [Insert a brief high level description of the project. terminology] Please avoid acronyms and technical This business case presents a rationale for the purchase and implementation of an online recruitment system at LSE. The School s key aim is to retain its competitive edge and continue to attract and recruit high quality staff. However, research indicates that UK and international universities are switching their recruitment processes to online systems. Thus, projecting a more positive impression to applicants, reducing their administration, increasing efficiency and reducing their costs. The current recruitment process at the School is administration heavy. The majority of the process is handled manually, which requires a great deal of effort. Therefore the process is costly, inefficient and could be more effective. A survey 1 of 91 UK Higher Education Institutions, including the LSE s main competitors, indicated that 64% intended to develop their current systems to include online capabilities and a further 12% intended to incorporate shortlisting capabilities. At present LSE s application process is comparable to 67% of other institutions surveyed, whereby application forms could be downloaded from a website in a pdf format or word format and submitted via post or . 15% of institutions already have an online system, the surveyed showed that this figure is likely to increase to 64% over the next 5 years. These findings are supported by the recruitment team s own survey of 25 of the School s competitors. 57% are currently using an online recruitment system, 42% of which have been using one for 2 years or more. Of the 43% who do not have an online recruitment system at present, 86% are planning to introduce one in the near future. The Recruitment team is happy to provide the results of the survey if requested. In order to keep up with the progress other institutions are making in terms of their recruitment practices and to address the limitation of the LSE recruitment processes, it is proposed that the School should adopt an online recruitment system. An online recruitment system is a webbased system that would allow the School to computerise the recruitment process. It would publish adverts and accept applications for vacancies via the LSE website and automate many parts of the recruitment process. After considering the options, the case identifies the business need for an online recruitment system and justifies the purchase in terms of benefits and costs to the School. 2. How does the project fit with the unit s plans, operating statement and School s strategic plan? [Where appropriate please relate directly to the School s 5 strategic priorities] The Human Resources Division strives to provide an excellent service to both its internal and external customers. Two of the Division s priorities, which are aligned to the School s strategic plan, are: 1 Conducted by and advertising agency, AdsFab, in 2007 Page 2 of 10

3 1. To enable the School to recruit the highest quality academic and academic support staff by delivering an excellent recruitment service in terms of advice, policy development, training and maintaining effective relationships with internal and external customers. 2. To support the diversity of the School s workforce by improving LSE s image as an employer of choice and developing the School s brand. In order to support these priorities, the Recruitment team has identified three broad areas of improvement that the School will need to address. These are: The School s brand The time to hire an employee The use of resources for recruitment purposes The School s brand: The School s brand has an important role in the recruitment of staff. The School has a worldclass reputation in the academic world and thus is able to attract high quality academic staff. However, the School is not necessarily considered an employer of choice for academic support staff. The School s competitors, for example Harvard, have taken advantage of technology to create an attractive and accessible website to promote itself as an employer of choice. Other UK institutions have also adopted a similar strategy and are moving towards online recruitment systems. Hence there is a concern that the School s recruitment success may suffer a detriment if it solely relies on its reputation. Placing a greater emphasis on the LSE brand will help engage with potential applicants and portray LSE as an exciting place to work. Creating a web presence, will drive more recruitment traffic through our website rather than relying on traditional, and more costly, recruitment advertising. Applicants may only visit the website once, but will be captured through the website by allowing them to register for job alerts, join a talent bank or apply online for a vacancy. Therefore, the website is working harder for the LSE in terms of creating a dialogue with a great range of candidates who continue to be interested in working at the School. Furthermore, the LSE brand can be used to target diverse groups and to encourage them to apply. For example, adverts publicising the LSE as an employer of choice and emphasising our work on diversity can be placed in a wider range of publications and websites. Applicants can then visit the School s website for details about our current vacancies. Again, once they are at the website they can register for job alerts, apply online, or join a talent back. This allows the School to capture a wider range of applicants than it does currently. The time to hire This issue links directly to priorities one, two, four and five of the School s strategic plan. The time to hire refers to the time it takes to recruit a new employee from the start of the process to the appointment stage. The time to hire varies between organisations and is a potential problem if good candidates are lost because they receive offers from other organisations faster. Therefore the School needs to consider ways in which it can reduce the time to hire. This will enable the School to compete for high quality staff in order to maintain competitive edge. The School s current recruitment procedures are designed to ensure quality, fairness and transparency and therefore it is not possible to make any fundamental changes to the structure of the process. However, an online recruitment system will automate and reduce the time it takes to conduct parts of the process, thus allowing the School to see an overall reduction in the time to hire. Examples of what the online recruitment system can do are: Allows managers to submit a request to advertise to the Recruitment team and to the relevant budget signatory automatically Receives applications on-line, removing the need to manually input applicant data Automatically acknowledges successful receipt of an application when submitted on-line Automatically produces reference letters and invitations to interview Automatically produces letters of regret to unsuccessful applicants and candidates Page 3 of 10

4 Automatically produces offer letter using information submitted via an on-line authorisation form completed by the manager Automation will mean that posts are advertised quicker, selection committees gain access to their applications sooner and candidates can be invited faster, thus eliminating the need for manual completion of tasks thus saving time during the process. The main benefit of reducing the time to hire, particularly for academic recruitment, is that it will be possible to make an offer to the successful candidate quicker than offers are made currently. Resources The effective use of resources is an important issue for the School and relates directly to priority five of the Strategic plan. Calculations based on a conservative estimate of the cost per hire for the academic session, indicates that the total recruitment costs for the School is 1,684,000 per academic year (see Annex B1). The School needs to make more effective use of its resources in terms of recruitment and to find ways in which costs could be reduced, without compromising current levels of service. A large proportion of the costs involved in recruitment comprises the time that each member of the Recruitment team spends on basic administrative tasks, such as data input, filing and photocopying. The cost if using an online system is dramatically reduced because many of the tasks can be done automatically, thus eliminating the need for time to be spent in this manner. The School needs to consider that whilst members of the Recruitment team are spending their time on basic administrative tasks, they do not have the capacity to undertake work, which are of a greater value to the School. Similarly, the volume of recruitment campaigns has increased by approximately 10% every year during the past three academic years, and it expected that volume will continue to increase at a higher rate, as predicted under priority four of the strategic plan (the increase in the student numbers). An online recruitment system will provide the recruitment team with a software solution that will automate many parts of the recruitment process. It will dramatically reduce the costs per hire and reduce the amount of time spent on basic administration (as shown in Annex B1). Therefore, the School will save money in the long-term. Furthermore, the School will reduce its advertising costs by placing targeted advertisements and using websites and job boards to advertise vacancies. Furthermore, an online recruitment system will allow the School to focus its resource on more value added issues. For example, the advertising budget could be used to commission various projects in relation to recruitment, which in turn will help the recruitment strategy, and thus the School s priorities. This relates directly to priority five of the strategic plan, which states that resources should be focused to deliver priorities. 3. Options [Brief description of the different options considered for the project including recommendation of the chosen option] Various options were considered in relation to the request. These are: Option 1: Do nothing Continue the recruitment process in its current form: This option would mean that the School will have difficulties in recruiting, will not develop against its competitors, the service delivery to internal and external customers will suffer and the School will continue to fund an expensive and increasingly ineffective recruitment service. This is the least favourable option of the five. Option 2: Employing more staff in the recruitment team: This option would cost more because, in order to provide a quicker, more efficient and more effective service, we will need to employ at least four extra staff (two Band 4 and two Band 3 appointments). This will cost the School 99,474 per year. An online system will eliminate human error in some parts of the process because it is automatic. Similarly, reducing routine administrative tasks would improve satisfaction and morale within the recruitment team because advisers would have the opportunity to conduct more interesting and challenging work. Page 4 of 10

5 Option 3: Use an external company to handle recruitment administration (outsourcing): This proposal was put to the Department Heads Forum (DHF) in After due consideration, the DHF did not approve this as a solution to the problem of handling recruitment administration. In addition, the company that could handle the outsourcing contract would not be able to perform the full range of functions of an online system. Option 4: Develop the existing recruitment database (Resource Link): This option would mean a slow modernisation of the recruitment processes as it is a database system rather than a web-based one. The Resource Link software is not designed to be a recruitment solution, but an add-on to a payroll solution. Therefore, the software is limited in what value it can offer and time and energy will need to be spent in the future to implement new developments of the database. Another major drawback is that the database cannot hold interfaces with external providers, such as online psychometric testing, which we consider essential. Option 5: Pay an external company to modernise the Jobs at LSE website (the LSE s job pages): This option would solve part of the problem. However, it would not address the issue of the time and cost involved in completing basic administrative tasks. Furthermore, the School would be in a situation where applicants were visiting the LSE website but not being able to use it to interact with us or apply immediately for a role online, thus limiting the benefits of having a modern website. Option 6: Purchase and online recruitment system: This is the preferred option because of all the benefits it will bring to the School. The benefits of the system are discussed throughout the business case. 4. Benefits expected (a) Clearly define the deliverables for the School community from the project and quantify the financial benefits (i.e. additional income and/or cost savings) both directly or indirectly [In relation to the chosen option] The benefits, which are analysed throughout the document, are listed below. School s benefits (includes financial benefits) Keep up with the School s competitors/comparators that have already introduced an online recruitment system or are about to introduce one 2 Reduction of the time to hire (Please see Annex B2) Reduction of the cost per hire (Please see Annex B1) Modernisation of the School s brand image Ability to recruit more effectively from the global market Streamline the recruitment procedures and minimise the time spent in administration (i.e. sorting out post, filing, photocopying, replying to s, sending out letters etc). This will enable the Recruitment team to spend time on issues that will add value to the School, such as giving advice to recruiting managers 3 Utilisation of technology as endorsed by the APRC and BOWERS report Management of financial resources more effectively in terms of cost savings and better use of our current resources. For example, it will help reduce advertising expenditure, allowing this money to be used for more value added projects such as supporting diversity or promoting the School as an employer of choice Improved communication and service delivery to internal customers Supports diversity, as the School will have more applicants for positions Creation of talent pools 4 that can be used for various purposes. For example, a talent pool of temps will mean that the temp costs will decrease as the School will not have to rely heavily on agencies The management of information will become easier, more accessible and focused Use of less paper thus supporting the School s Environmental Policy Save money on postal charges for both internal and external mail, thus reducing the reliance on the postal service (estimated approximate saving of 5,500 per year). Supports business continuity 2 Survey Results: of the 14 respondents, 8 said that they are using an online system. 3 Survey Results: of the 8 respondents that said that are using an online system, 7 said that it reduces administration 4 Talent Pools are banks of candidates with specific skills and experience relating to a particular type of vacancy. Page 5 of 10

6 As a team we are obliged to keep recruitment information for a certain period of time. An online recruitment system would take up less space in the School basement and save money in archiving (buying boxes, time spent archiving etc.) The system offers applicants improved data protection compared to a paper based system Facilitates flexible working for both applicants and users Applications cannot be lost Quicker to advertise posts No need for the Recruitment team to intervene in parts of the process as everything is automatic (for example, managers could check the number of applications received themselves) External benefits Candidates would be able to register for job alerts to find out about relevant vacancies Improved communication with candidates/applicants. For example, it would provide improved responses to applicants as the response will be automatic instead of an average 3 working days. It would speed the application process (reduce time to hire) Keep applicants informed of the status of their application automatically Make the application process more accessible It would modernise the recruitment web pages, helping the communication aspect The system will be able to work with time zone differences (b) What competitive advantage will result or be reinforced? The online recruitment system would reinforce the school s world-class reputation and develop the School s competitive advantage by: Reducing the time to hire to increase the School s competitiveness for the best candidates Creating talent pools to have suitable applicants on demand Creating a dialogue with potential and current candidates/applicants in order to maintain their interest in the School even if they are not actively searching for a job 5. Risks (a) Summary of the key risks of the project: [In relation to the chosen option] The project has certain risks that will need to be taken into consideration: The risk of not having the funding for implementation and future developments The reliability of the supplier: downtime of the system, the continued existence/credibility of the company, compliance with legislation, and ability to delivery as promised on time The risk of the web services team not being able to support the project and provide required information The availability of MIS resources for the tendering process and possibly to assist with the implementation The purchasing office not being able to assist in the tendering process (b) What is the potential risk in delay in the short term (12 months) and longer term? The risk for both short term and long term will be that the School s recruitment activity will be limited because the School will not take advantage of the technology which will enable it to enjoy the benefits (as listed above). Any delay in implementation will mean that the School will be further behind its competitors. It also means that the School cannot take advantage of the branding benefits that could come with the system and modernisation continues to lag. Any delay in implementation past October 2008 will mean inaccurate Management Information as the academic year starts from October and all reports will need to consider the full academic year. Page 6 of 10

7 6. Quantify impact on the following areas: (a)teaching and research activities and capacity: The online system will improve the recruitment of staff for teaching and research activities because it will allow the School to locate, attract and appoint the very best academic staff. Once appointed, academics will need excellent academic support staff to support them in their work. (b) Funding: Funding is required and the Recruitment team is hoping that the School will approve funding through the Service Development Plan. The Human Resources Division does not have any other budgets to support this initiative. (c) Resource requirements short, medium and long term: This should list any changes in resource requirements after the project has been completed In the short term the online recruitment system will need: Time from various LSE Teams such as the time of the Procurement manager, Web Services team and MIS In the long term the online system will need: Continuation of funding The software developments that will be needed for the system The online system will free up staff to deal with other value added tasks. (d) Workload and work practices: The online system will improve the workload and work practices of the Recruitment team and of the recruiting managers across the School because it will: Modernise and streamline the recruitment processes Automate stages of the recruitment process; for example, candidates receiving immediate acknowledgments of their applications Will be less paper oriented the system will save cost of paper for recruitment campaigns, notes, records etc., which will be online Easy access, easy retrieval and quicker/smoother practices for both the recruitment team and the recruiting managers Straightforward workflow and more accurate work practices; for example, the authorisation of funding could be done online Assist communication within the Human Resources Division - the online recruitment system can assist with providing accurate information for redeployment cases which will help the Employment Relations team with their work Reduce data entry for the Recruitment team and time will be spent on more value added activities The recruiting managers will be able to follow their recruitment exercise without the need to contact the Recruitment team as frequently as now. (e) Current and future policy and strategy: The online system will help the Recruitment team to support its aim of reviewing the selection methods used for the appointment of academic support staff and it will allow the Recruitment Team to offer psychometric testing for all vacancies. This will be done by creating an interface with psychometric test providers. (f) Student support: The online system will not directly affect student support but it will help to recruit high quality academic and academic support staff that will improve the student experience. 7. Costs [Include costs of support and maintenance considerations once project has gone live in addition to planning, development and testing costs. A projected resource costing must be attached to this case.] During the summer vacation period , seven software providers were invited to visit the School to give an initial demonstration of their online recruitment software. The companies were: Page 7 of 10

8 1. I-GRASP Stepstone Solutions 2. Resource Link 3. Ceridian 4. Hot Lizard 5. WCN 6. Jobs Go Public 7. People Click Each company was asked to provide costings for: a) a basic system, comprising an initial figure for implementation and a monthly or annual licence fee, and b) any additional options or functions that were available for purchase The table in Annex B3 shows a list of the costings for each supplier, broken down into: Implementation fee Monthly fee or annual fee, where applicable Total cost for year one including the implementation fee and licence fee for the first year Total cost for four years Total cost of all optional extras that are available for purchase Total cost for four years including the optional extras The table shows how the costings differ between the providers and this is due to the different capabilities of the basic product and the additional options that are available for purchase. For example, IGRasp is the most expensive supplier because they have a variety of different modules for purchase. With the exception of Resource Link, all of the software providers offer a product that is specifically designed as a recruitment solution. In contrast, the primary function of Resource Link is to act as a payroll solution. The software provided by Resource Link is an add-on module that is designed to serve as a recruitment database rather than a web based online recruitment system. It is the least expensive quote because it is not comparable with what is offered by the other providers. In addition, maintenance and development of the Resource Link module would be charged on an ad hoc basis, resulting in a more expensive system in the long term. With the exception of Resource Link, the costings in Annex B3 include support, maintenance, future developments and updates to the software as well as training. Furthermore, the online system will pay for itself in the long term because of the overall reductions in the cost per hire (as shown in Annex B1). 8. Assumptions [Include any pre-requisites or future assumptions that support this project including any third party involvement such as vendor support] There are three prerequisites: That we get permission to tender in December 2007 That the Human Resources staff has the time to spend on the implementation of the project That the Web Services team can support the Human Resources team at the beginning of the project There are some future assumptions: That the chosen company will exist in the future and that it can provide the School with the service that it has purchased That the web use will continue to grow in the future especially in the recruitment market and that more people will have access to the internet and will prefer to apply online That funding will be available to support the development of the project 9. Project Resourcing [Include all the LSE teams required to work on this project in any capacity as well as external companies] The following teams (internal and external) are needed to resource the project: Page 8 of 10

9 The Recruitment team - for implementation and planning of the project and for managing the relationship with the vendor (management of the contract) The Web services team - for implementation of the project and to aid the decision making process The MIS Team to assist the tendering exercise The tender team - for the decision making process The Purchasing Manager for the decision making process and the management of the contract The users of the system for feedback on service delivery The Vendor for implementation, future development and training 10. Timescales [Key deliverable dates] Please find below the timescales for the project (please note, these could change according to when the decision is made to allow the Recruitment team to go to tender): Tender Exercise to begin: December 2007 Tender Decision: April 2008 Funding approval: May 2008 Implementation: start in June 2008 Project goes live: September/October Investment Appraisal [Balance between costs and benefits over the useful life of the product using the do nothing option as the baseline] As shown, figures illustrate the School s current recruitment costs are high. If the School continues to maintain its current recruitment methods, these costs will continue to be incurred by the School. However, if the School would like to reduce its recruitment costs, it needs to consider purchasing an online system. The initial expenditure involved in the implementation of an online system may seem high, however the School will see a higher return on their investment because of: a) A direct reduction in the cost per hire and the reductions of indirect costs such as postage, paper, time, human error etc. b) Benefits such as improving competitiveness, a better external image of LSE and a direct reduction in the time to hire. 12. Compliance [How does this project ensure that the School does not fail to meet policy and legislative requirements? The HR Manager has consulted with: Rachel Maguire, Data Protection Officer, in respect of the Data Protection Act and the Freedom of Information Act and established the criteria that the software company will need to meet in order to satisfy legal requirements. Jean Jameson and Gail Keeley on disability issues related to this project. In addition, the Employers Forum on Disability has also been contacted with regard to the issue. The online recruitment system will take into consideration issues such as online applications versus paper copy applications as well as access/disability issues in relation to interview arrangements. For example, some companies can provide the School with Audio Facilities that will allow people with visual impairments to listen to the information rather than read it. Margaret Newson, Purchasing Manager, to discuss a tender process and its implementation. IT Services and Web Site Services to discuss the project. MIS Team to discuss the business case. Page 9 of 10

10 For guidance on Major issues the following people can provide assistance: Rachael Maguire - Data Protection Officer Data Protection Act Freedom of Information Act Jean Jameson - Advisor to Students with Disabilities/Dyslexia Disabilities Discrimination Act Special Educational Needs and Disability Act Margaret Newson - Purchasing Manager LUPC Procurement If you are unsure of compliance issues please contact your Head of Division/Department for further information] Business cases must be reviewed and signed off by the Head of Division before formal submission: Head of Division: Alison Johns (block capitals) Signed: Date: Reviewed and signed off on behalf of MIS for consideration by the MIS Steering Group: MIS Manager: MR A COULTHARD (block capitals) Signed: Date: Page 10 of 10