Corporate HR departments are increasingly using Recruitment Process Outsourcing (RPO) services to transfer all or part of their recruitment activities to an external service provider. RPO providers bring forward deep recruiting capabilities that include well-qualified recruiters, processes, sourcing networks, technology, and social media. They operate as a virtual extension to the client’s recruitment function. Specialised RPO firms will not only assume ownership of design and management of recruitment process but also take accountability for outcomes under pre-defined SLAs and drive automation and year-on-year productivity improvements.
Drivers and Benefits of RPO
Clients typically launch an RPO initiative to improve service, address fluctuating demand, improve time to hire, increase the quality of candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance. The benefits for clients can be enormous:
- Low Cost. RPOs are generally run at the lower cost as they are able to optimise costs associated with a large staff of recruiters, resume databases, tools and social media networks.
- Improved Flexibility. As with any other form of outsourcing, RPO solutions change fixed investment costs into variable costs that flex with fluctuating demand.
- Better Utilisation of Capacity. Companies may pay by transaction than by resource; ensuring better utilization of capacity and avoiding expensive layoffs when activity is low.
- Higher Quality. RPO should also improve quality because RPO provider is paid for delivering specific performance targets and outcomes. As a result, the RPO provider will concentrate their resources on core tasks that excluding any non-core activity.
The RPO Journey
For buyers interested in RPO solutions it is important to define your strategy upfront and answer some critical questions:
- How will an RPO solution benefit your organisation?
- What are the areas that need improvement in the current recruitment processes?
- Do we outsource specific tasks or end-to-end recruiting processes?
- How will we redeploy the freed-up capacity if we outsource?
- How will be measure success if we embark on the RPO journey?
An assessment of recruiting processes will be essential to clearly understand the drivers that are specific to your organisation. The recommendations from such assessments will provide insights into the maturity of your process, people and technology and identify areas your firm should seek expertise and is willing to outsource. As an outcome of this phase, all key stakeholders need to be brought into the arrangement and must work together to accomplish the organisation’s recruitment goals.
Once scope is clearly understood and agreed, preparing the design of your unique RPO solution in consultation with potential vendors, employees and external consultants will be the next logical step. A governance group can be formed consisting of HR, Legal, Sourcing, Procurement and other stakeholder representations to drive this forward. This will also clearly establish executive sponsorship for the initiative. Vendor selection can also be initiated at this stage. Traditionally organisations used to do RFI/RFP (Request for Information/Proposal) but we recommend a more collaborative approach with a few firms that allows you to build the future state and service improvement plans in closely working with them. This approach will balance mutual expectations and provide critical insights to determine the best RPO partner for your firm.
The transition of core recruiting processes in alignment with the RPO strategy lays out the foundation of the future success of the RPO. This phase must be therefore managed well. Clients will need to work closely with the selected partner and transfer knowledge and capabilities.
The RPO initiative moves into the steady state, once the provider has completed knowledge transfer (KT) and gained control of the process to the extent that it can run that without any client intervention. The steady-state provides operational control to the provider to start looking into maturing the RPO so that it can be run more efficiently.
Once the engagement is in steady state, the focus must shift towards enhancing the value of the RPO. This calls for the dedicated focus on optimizing the RPO processes and practices. Most providers at this stage will measure the volume of demand, fluctuations, optimise capacity, implement SLA framework and continuous improvement mechanisms. They might also clearly identify client dependencies that need to be addressed so that optimisation can be successful. Keeping transparency of operations at each stage of the recruiting cycle will be critical to showcase and measure value to the client. Providers should, therefore, publish reporting and metrics that provide insights into the health of recruiting process. Clients must provide strong governance over RPO activities, providing initial direction and continued monitoring to assure good results.
Your RPO initiative will be unique to your organisation. Successful RPO strategy will require clients to share their recruiting strategy and business knowledge with the RPO provider. This will not only help them represent your brand successfully but also meet and exceed your expectations with the RPO initiative.