Now you’ve decided that Recruitment Process Outsourcing in some guise would probably benefit your business and you’re now starting to look at your options. The good news is that there are relatively few variables that you should take into account. As with all business decisions, research is key to making the right choice.
However, the recruitment solution that you choose touches all parts of the business that use it and will materially affect the quality of new employees that you can attract and secure, so you need to consider the solution in broader terms than how it applies to your part of the business alone.
There are six core areas to consider:
1. Size matters
Large or small? Pure-play or agency-backed? Local, national, international or global? All have their strengths and weaknesses and suit different business needs. There is some truth in the adage “you never get fired for buying IBM”; after all, if a well-known global player can’t recruit properly for you, who can? These firms have a solution in a box – they tend to replace your recruitment function in its entirety with its own, and it should in theory work like clockwork. But you are unlikely to get a personal service and if you want to change any of the systems or processes it is likely to be costly and troublesome, however, if a plug and play solution fits your business this is a good solution. These solutions work well for large businesses with a lot of repeat roles at a junior level, such as call centres, but less well in smaller companies with more complex recruitment patterns.
The alternative, smaller RPO providers are usually more flexible, their delivery people are usually more eager to make a difference, and as they haven’t invested millions in developing an Applicant Tracking System which is now a depreciating asset, are more likely to be able to take advantage of, and use, evolutions in recruitment technology. Intuitively, costs should be higher with a smaller business that doesn’t have economies of scale, however, this is worth investigating as they tend to have lower operating costs and fewer head office-based employees with grand titles, so they are more inclined to be competitive in their negotiations.
There is a lot of debate around pure-play vs. agency-backed RPO. A pure-play should keep client databases completely separate, developing your own talent warehouse and driving much more recruitment in-house. It is worth probing in some detail around how effective your provider has been in pulling talent out of this warehouse; they are difficult to maintain and take focus, intelligence and lots of communication to make the most of them. A good talent warehouse should be bolstered by an effective strategy, comprising e-communication, regular updates, conversations, even creating a mentoring programme for those with the highest potential.
In contrast, an agency markets itself heavily and has tens of thousands of candidates in their database that you will have access to. This can be a huge benefit if your business is in a high turnover, low-skilled recruiting environment. Don’t forget, though, that these candidates are managed by a bank of sales-driven contingent recruiters back at base who will also be marketing them to your competitors, who are often paying much higher fees than you.
If your onsite team is using the agency’s systems, it is worth checking whether any candidates generated by your onsite team ultimately feed into their main database, which removes your ability to create a database of talent for the future and increases your reliance on agencies rather than reduces it. In addition, the agency PSL is likely to be made up of the back office only, at least at the first tier level. The result is that you have a Managed Service Provider onsite, not a true RPO.
The need for geographical reach depends enormously on your business requirements. A good recruiter can access talent anywhere in the world; social networks and VoIP technology enables information sharing and candidate reach like never before. Rather than focussing on physical locations, ask for details of how the RPO provider uses technology and to give examples of carrying out a multi-location search for a tricky position. What language skills do they have in-house? How much of their business is international? What level of roles do they handle on a global basis? How has technology influenced and changed their practices over the last few years?
2. Sweet spots
The second area to consider is: how does your business fit within the accepted scope of your supplier? Most solutions work best within a given set of parameters, usually indicated by past performance. There are exceptions to this, such as when a company has recently made a significant acquisition, experienced rapid growth, or recently entered a new sector through strategic planning, all of which can change or broaden their focus.
When considering your RPO partner, ask yourself whether you would like to be an early adopter or part of a group of similar clients. There is security in the latter, as your supplier should be able to give you references from familiar businesses that you can speak to directly, which will give you a really good understanding of how the supplier performs under normal circumstances and when they begin to face unfamiliar challenges from their clients. The solution is well-established and there should be few surprises.
As an early adopter, you will probably benefit from a lot of focus, as the supplier will be streamlining their services around you, and you are likely to benefit from a close management eye and lower costs. You may, though, experience some unstructured behaviour as the supplier finds their feet in unfamiliar territory, so you should be prepared for being flexible in the early stages. The benefits of being an early adopter are legion, though.
With an established market leader poor practices can slip in; problems may not be responded to as quickly as you might like; procedures become more relaxed as onsite recruiters find workarounds to the recruitment workflow. You might also find that the solution is less adaptable to your business.
3. To specialise or not to specialise?
When assessing how your business fits within a supplier’s norms and comfort zone, it is worth asking how “standard” your needs are:
If you are running a call centre or retail operation in which you will probably need volume, aligning yourself with a national agency which has its own marketing platform and candidate attraction methodology independent of your own will benefit your business in terms of accessing economies of scale that would be impractical, extremely difficult and costly to develop yourself.
In contrast, if you need to access a pool of talent that is specialist, such as highly skilled technical and scientific competencies it is worth considering that: they are rare, they are generally too focussed on their job to consider looking elsewhere, still less to update their LinkedIn profile or look at job adverts. In these cases, it is probably more useful to look at how the solution is constructed and whether the solution will reach your candidate pool. Standard “box” processes tend not to have the flexibility and depth of reach that a more intelligent, consulting approach to recruitment can offer. It is also worth examining SLA levels and making sure that the supplier has a Plan B that fits within your timeframes. How do they work with agencies? When would agencies be called? Do they understand your industry; where to look for candidates; how to address them? Are they asking the right questions at briefing stage? Would you feel comfortable that they will go to the N’th degree to find hard-to-reach candidates or will they feel that thus far is good enough? Somewhat counter-intuitively, it is often less important that the RPO supplier has experience in your specific field, as good recruiters can be hired, and more important that they understand the complexity of your needs.
4. What else can they do?
Wouldn’t it be great if the RPO provider you choose could do more than just recruitment? Making sure that you’ve got the right people coming into your business at the right time should be the core goal, but some RPO providers use their knowledge of your business, as a strategic partner, to support you in other ways.
This could include auditing and setting up your shared service model; taking responsibility for offers and onboarding; assessing your Executive Board; streamlining HR processes and procedures; creating a succession plan incorporating both internal and external talent; designing and implementing a graduate intake programme; the list goes on. You may not know the extent of the skills of your RPO provider and it is worth asking how they feel they can support your business outside of simply recruitment.
5. Do you want a partner or a supplier?
This is a relatively simple choice and concerns the nature of your relationship. A supplier will be heavily KPI-driven and you will have in place a number of SLAs which have penalties against them should they be missed. You will have a lot of controls in place and there won’t be much room for adjustments to process or to adopting an imaginative approach. The people hired are likely to be competent recruitment delivery consultants but may not have much breadth of experience and are not likely to be highly experienced, as they are relying on process. This means that you will probably be able to negotiate your contract costs regularly (downwards) and profit margins for the supplier will be relatively slim.
Large retailers, such as Tesco, operate in this way. Your relationship with a supplier is one of master and servant, and you will have a lot of control over how they operate on an overall basis but probably not much on a day-to-day basis. It doesn’t really matter, as the results are what is important and not the method of getting there. Supplier recruiters tend to be more concerned about how their employer (your RPO provider) views them rather than how they are performing with your teams.
An RPO partner is also heavily KPI-driven and you should also have a number of SLAs in place. The difference is that these KPIs and SLAs are a means of identifying ways to improve performance, not just judge prior success or failure. Recruiters hired in this model tend to be more imaginative, creative problem solvers who recruit because they enjoy it and see its immense value in the business supply chain. You will still have control over the recruitment environment, but instead of coming up with solutions yourself, a partner will be constantly thinking of ways to do things differently.
You may find that your recruitment environment subtly changes over time. This could be in small ways, such as candidates regularly being greeted at reception and settled into the interviewing room by a recruiter rather than one of your own team, or in more fundamental ways such as the candidate reports becoming more or less detailed, or providing suggested interview questions for each role, as your hiring managers’ preferences and needs become clear. At your strategic reviews, a partner will discuss KPI changes over time and will suggest areas to strengthen, for example providing interview training for hiring managers.
A partner recruiter’s core focus is delivering against the needs of your business, and their employer (your RPO provider) is seen as their colleague rather than their boss.
6. The personal touch
This is probably one of the most important aspects of your selection process, but rarely talked about in our KPI-driven world. Do you like the people you will be working with? Do you know who will be running your account? Is it the person who has sold you the solution or someone else, as yet unknown? Can you be honest with them about how the relationship is evolving and whether you are happy with it? Do you believe that they will address problems when they come up or will they make excuses or, possibly worse, not be able to do anything about them? Are they too friendly or too professional? Will they fit your business culture? What will your Account Director do if you don’t like one of their team? How will they address performance issues? And most of all, do you trust them to take care of one of the most critical parts of your business?
Selecting the right RPO provider should be a decision based on the individual needs and goals of your organisation. Not all RPOs are the same, and failure to research and understand the different solutions could result in a disjointed partnership which may prove to be more disruptive than it is purposeful. It is also vital to remember that business relationships such as this are a collaborative venture and require commitment, dedication and clarity on both sides.
Before you decide on your provider, ensure that you have buy-in from both the key stakeholders that will be directly involved in managing the relationship and other members of staff who will be working with and around the RPO. Do they understand the concept? Explain how RPO is different to other recruitment solutions, and why this particular provider and solution has been chosen. Are they aware of the partnership’s objectives? Do they know the end goal?
So often, these key strategic management messages are not filtered from the top-down, resulting in internal resistance and a fractured culture. This partnership will have an impact on the entire organisation, so it is imperative that you communicate with your team to ensure success when the contracts are signed and the RPO becomes embedded.
