Making RPO Work – Recruitment Process Outsourcing

RPO, or recruitment process outsourcing, is becoming increasingly popular as the pressure to focus on core business activities and the ‘time to fill’ roles increases. Cost savings are now also high on the agenda for most companies. RPO is not the answer to all recruitment related issues - simply outsourcing recruiting to an RPO provider will not be a quick fix. Over time it will help streamline a company’s recruiting process and, if the right RPO provider is selected, then also reduce recruiting expenditure. The ‘time to fill’ vacancies and interview to offer ratios will also improve.

An essential exercise for all organisations to undertake before engaging with an RPO provider to outsource their recruiting function, is to truly understand the ‘as is’ status of their current recruiting practices. Metrics need to be determined to track the following: overall recruitment costs (including advertising; job board access; agency and search firm fees; careers fairs and other recruitment events; employee referral scheme payments; ‘internal’ recruitment staff salaries and cost of employment). The source of all new hires. The ‘CV to interview’ and ‘interview to offer’ ratios. The ‘time to fill’ roles. New employee first year attrition.

By knowing where you are with regard to the key operating metrics for your current recruiting model you will be able to benchmark the ‘as is’ and then use these metrics to agree KPI’s with the RPO company, and measure improvements against them. If you don’t establish and agree these metrics ‘upfront’ any Recruitment Process Outsourcing provider will be able to claim that they have made improvements through implementing an RPO model.

[cph offers a consulting service under which it benchmarks an organisations current ‘as is’ status for all their key recruitment activities before they consider going to market for a RPO solution. This is essential otherwise they will not be able to measure or quantify what improvements have been made, if any]

A quick improvement any RPO provider will make is to streamline the recruiting process, ensuring that a structured and consistent pre-screening, interview and assessment process is in place for all vacancies. This will help both the recruitment process outsourcing provider, and the company in that it will improve the speed of hiring new employees and the time committed to the recruitment process - but any cost savings from this activity are finite. Real financial value can only be derived by sourcing and attracting higher calibre employees, reducing agency usage and freeing up hiring manager and HR time to focus on their core business activities.

The additional benefits of RPO, if the right provider is selected, include strengthening the company’s ‘employer brand’ and improving the ‘candidate experience’ for all applicants. ‘Candidate experience’ is now becoming a real differentiator with regard to which employer an individual decides to join. Research suggests that candidates are finding it less attractive to join multi-national companies with large brands and with a long drawn out, overly complicated recruiting process.

[cph measures ‘candidate experience’ on a monthly basis across its client base, as a key component of its RPO service delivery. Results are presented back to each client in order to ensure they are achieving an ‘employer of choice’ status and that their applicants’ candidate experience remains consistently positive.]

Other key factors relating to an RPO solution being successful are:

• The RPO provider’s recruitment team being based on client site, fully embedded within the business, and branded as if they are ‘employees’ of the company. Why would you have someone recruiting for you if they do not totally understand your staff or your company culture?
• A significant reduction in agency and search firm usage.

Many RPO companies focus on driving down agency fees, which has a negative effect as the agencies will simply place their best candidates elsewhere to achieve a higher fee. The key to real success is for the Recruitment Process Outsourcing provider to replace agency hires with a robust Direct Candidate Sourcing model.

[cph’s approach is NOT to drive down agency fees, but rather to significantly reduce agency usage by directly sourcing candidates for >90% of its clients’ roles. Deploying a fully onsite and embedded RPO model, cph will deliver significant cost savings whilst also improving the overall quality of hire.]

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