Outsourcing deal saves Norwich Union £2.3m in recruitment costs

Insurance giant Norwich Union - which announced massive job cuts earlier this month - claims to have saved £2.3m after outsourcing its recruitment processes.

The company reduced its interview-to-offer ratio, induction periods and resignation rates during the first year by handing over recruitment to Lansdowne, the recruitment division of HR technology firm Arinso.

Norwich Union had previously hired half of its new recruits through external agencies, with the other half being direct hires.

The company said it spent £6m annually on agency commission and recruitment advertising.

"I wanted absolute proof that they could do it better than we could. That was my main challenge in choosing an outsourcing partner," said Paul Awcock, head of recruitment at Norwich Union.

Lansdowne operates a team within Norwich Union to handle all aspects of the recruitment process from screening to offer, although line managers get involved in the interview process.

The insurer began its outsourcing project in its Norwich Union Direct division, taking in high-volume call centre recruitment, and then rolled it out to more specialist areas of the company. Alongside the recruitment outsourcing, it also developed an electronic candidate management system to hold candidate details, enabling potential Norwich Union employees to register for vacancy alerts.

Despite plans to cut a total of 4,000 jobs by 2008, Awcock insisted the company still had 1,800 "live vacancies".