The 5 biggest mistakes made when buying RPO
Recruitment Process Outsourcing (RPO) is one of the most common forms of outsourced service and when done well is often one of the most successful, delivering greatly improved performance compared to in-house solutions. Yet there are all too many anecdotes of failed projects and delivery issues, indeed almost half of all Recruitment Process Outsourcing projects last only a year or less, so why is that?
The answer is that all too often mistakes are made at the opening stage, errors that poison the potential of the project to succeed and deliver the undoubted benefits on offer. So if you are considering outsourcing your recruitment, or have a solution in place and are having issues, what are the five biggest mistakes made when buying RPO?
1. Poor Preparation
Thousands of companies around the world have shown major benefits to adopting Recruitment Process Outsourcing solutions. However, for an RPO to succeed requires more than a supplier to be called in and handed the proverbial ball. A buyer must define what it is that they want from their supplier. What services do they need? What will success look like? What KPIs and metrics are going to be used to measure success? If this is unfamiliar to you, or you’re calling in the RPO company because you don’t know what to do don’t despair; good RPO providers can work with you in the early stages to help define the parameters and goals. Indeed bringing an RPO to the table at the definition stage, to help review your needs, perhaps auditing your current processes, can give external clarity and expert input into the vital definition stage.
Whether you do it alone, or with external support, make sure you have a clear scope of what you want your prospective partner to do and how they will be judged, otherwise don’t be surprised if they fail.
2. Poor Management of the Relationship
This is one of the most common issues and causes of RPO failure. Outsourcing recruitment is not an ‘out of sight, out of mind’ solution. Whilst RPO can and does improve the quality of your recruitment process, delivering better people faster and more motivated, it cannot do it in a vacuum.
At the highest level, successful Recruitment Process Outsourcing requires clear leadership; executive sponsorship and support. Even with this in place many, if not most, companies fail to ensure that they have defined and effective governance relationships with their RPO provider. For an RPO to succeed there should be an established account manager who is responsible for the client side for the maintenance of open dialogue and interaction. There must also be clear KPIs and metrics, an approved schedule and format of reporting and reviews, and a defined path of escalation.
A good RPO provider can help provide the structure for governance, such as suggesting KPIs, but it is up to the client to put in place the people and the will to make the programme succeed. After all, the introduction of an RPO will be new to the client, and the client will be new to the RPO provider; leaving the relationship to chance is one of the surest ways to see it fail.
3. Too Much Focus on Cost Savings
A survey of over 800 US and European executives reported that the key driver for outsourcing across all areas was cost savings. Certainly, this is usually high on the agenda when speaking about RPO. But client companies should look beyond top line savings at the bigger picture. The cheapest way to recruit is to trawl databases and run cheap online ads, delivering access to only a shallow pool of candidates, many of whom are desperate for work and do not represent the highest quality. If you choose an RPO provider purely on price, this is the type of solution you’re likely to get. In contrast, proactive sourcing solutions, which target people not otherwise looking for work, can deliver large numbers of fresh candidates who are not in the open market, are presented only to your company and are highly motivated and skilled. As these candidates are not currently in need of work they can even from the basis of a Talent Warehouse, reducing future time to hire by up to 80%.
The resultant benefits of looking at the bigger picture include faster speed of hiring, higher quality of the candidate, reduced time to new starters getting up to speed and consequently increased productivity and profitability.
In short, if you focus on the big picture an RPO can deliver a multitude of benefits to your company, and even then cost no more than an in-house solution. In contrast, if your focus is on cost savings alone the result is likely to be limited numbers of candidates, of questionable quality, under heavy competition.
4. Poor Internal Communication
Between a quarter and a third of all failed outsourced projects fall down because of poor internal communications. Companies bring in their RPO partner and expect them suddenly manage everything without people in the company knowing anything about it. This is simply unrealistic. Your organisation has established lines of communication and reporting; an outside party, no matter how experienced or skilled, cannot break into that structure without support. This means clear and open communication to all affected members of staff, explaining who the RPO team are, what they are there to do, how they will do it and what is expected of the client staff to make the project a success.
If good and effective communications are used, both at the start of an RPO and during its delivery, everyone involved will understand what is expected of them, why their support is necessary and the benefits to the company and individuals. With everyone on the same page, an outsourced recruitment solution is established to succeed, without it is doomed to fail.
5. Selecting the Wrong Partner
It seems obvious, but if you choose the wrong partner/supplier a project is unlikely to succeed. Nevertheless over half of RPOs surveyed report issues arising from suppliers not being appropriate to deliver the solution required to the client.
Many recruitment firms, from boutique agencies to major blue chip brands, claim the ability to provide RPO. However, in truth most do little more than coordinate agency response or put a consultant on site, offering their client first refusal of candidates on their database. Many clients adopt such offerings from agencies based on familiarity and the perceived strength of their understanding of the client needs and culture. Their reasoning is tempting, but all too often flawed.
A good agency supplier is rarely a good outsourcer, the skills sets are simply not the same. Clients should ask themselves if the prospective partner has experience of outsourcing, of improving processes and optimising returns. Can the RPO partner proactively source candidates from a wide range of locations? Do they provide processes and systems which can manage and improve your recruitment? Are they also working for competitors, as many agencies must maximise their returns on candidates received, meaning that the benefits of your investment will be shared with your competition?
An expert RPO company brings to the table proven methods, experienced staff and a laser focus on your needs. Furthermore, if they are good at what they do they will not even ask you to exclude the best of your agency suppliers, giving you the best of both worlds; a great process for day-to-day recruitment and the fall back of tried and tested agency suppliers for those one-off needs.