Recently, I heard from a talent acquisition leader who told me his goal was to transform their decentralized recruiting structure into a centralized one. He said they struggled to be competitive in the markets they hired in due to inconsistent and unstructured processes that resulted in losing key hires.
I’ve heard it again and again over the years, companies going from a centralized to decentralized, and back again to a centralized recruiting and hiring structure. Back and forth. Of course, there are business reasons for both, and companies switch seemingly every few years.
Centralized Recruiting:
- Consistency and Standardization: Centralized recruiting ensures that the recruiting process is consistent across all departments and locations, including how candidates are assessed across job types.
- Efficiency and Cost-Effectiveness: Centralized recruiting can streamline the overall hiring process, reduce redundancies, and lower costs.
- Compliance and Risk Management: Centralized recruiting can help ensure compliance and create better control and oversight of the recruiting process.
Decentralized Recruiting:
- Improved Responsiveness: Decentralized recruiting allows individual business units and/or locations to better respond to their specific hiring needs.
- Reduced Bottlenecks: Decentralized recruiting can reduce bottlenecks, especially in large organizations with high-volume hiring needs.
- Cost Efficiency: Decentralized recruiting can also save costs because individual business units and/or locations can find cost-effective recruiting activities, localized networks, and related resources.
And again, much more. But which one delivers the better candidate experience? Centralized or decentralized?
When we look at our CandE Benchmark Research data, the majority of North American candidate survey responses are candidates applying to centralized-recruiting companies – 78% in 2023 and 82% in 2024 (we’re still collecting data this year).
After analyzing our 2024 data, centralized recruiting has the candidate experience edge across our key ratings, and most of the candidate journey ratings when converted to the traditional +100 / -100 NPS rating scale (see below). This time, we converted all the ratings to traditional 11-point NPS ratings, which always skew lower in candidate experience.
Key Ratings and Candidate Journey Ratings (NPS)
The relationship rating difference above is more dramatic than it looks. Decentralized has a 74% lower NPS rating than centralized (13 vs. 6). It’s important to note that 90% of our candidate responses are those who didn’t get hired, and companies usually only see higher NPS ratings for those who received offers and were hired.
The lowest scores companies ever receive are from candidates who knew they were not selected when they completed our benchmark survey. This is basement-level low. Centralized still has the edge here, but a -79 NPS is nothing to brag about. Companies could deliver the best candidate experience in the world, but when you tell them, “No, you’re not qualified” or “No, you’re not hired,” it always skews negative.
The relationship question we ask candidates each year is an important indicator of what we call the contentment and resentment rates. The question is: How likely are you to change your relationship status with us based on your recruiting experience? It’s a forward-looking question that tells us whether the candidates will increase their relationships with the employers they applied to through brand alliance, product purchases, networking, and/or making referrals – or not.
The contentment rate (or great experience) is about the same for centralized and decentralized (25%-26%), but the resentment rate (poor experience) is 38% higher for decentralized than centralized (19% vs. 13%). That’s another significant difference; candidate resentment is at an all-time high.
But the centralized edge stops at offer and onboarding (new hire). Here, decentralized recruiting has higher offers and new hire ratings. Why? We’ll have to unpack that further, but part of the answer could be reduced bottlenecks, localized responsiveness, possibly more competitive salaries and benefits, and timely offers.
As we highlighted above, there are many business reasons why companies shift from centralized to decentralized recruiting and back again. However, the consistency and standardization in the centralized model contribute to a more positive candidate experience and lower candidate resentment. Centralized recruiting certainly has that candidate experience edge.