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Value of Recruitment Process Outsourcing (RPO)

 

Anne M. Mulcahy, former Chairperson and CEO of Xerox said, “Employees are a company’s greatest asset—they’re your competitive advantage. You want to attract and retain the best.” This advice resonates more today than ever. Especially with the services sector generating more than half (62.4% in 2015) of the world’s gross domestic product, our primary product is, in fact, our people. Engaging, retaining and inspiring employees is now leadership 101 and it begins at the executive level.

Pekka Lundmark, Former President and CEO of Konecranes PLC said, “To be able to attract people with multiple talents is an absolute key, and is also probably our largest single headache.”—he is not alone. According to the 2015 Global CEO Survey by PWC, 73% of CEOs said that the availability of skilled labor is a concern, up 10% from the previous year’s study.

We read about a “talent war” but who is on the front line and how are they planning to win? The first answer is simple. The global talent war is a misconception. The front line is a model of attraction and retention, not targeting and capturing. The battle isn’t about talent at all. It is about engaging and retaining your workforce. Job seekers are consumers and companies must demonstrate their authenticity because the digital world doesn’t tolerate superficial tactics. There are plenty of candidates, but are they the right candidates? Profitable growth? It’s every company’s goal, but the colleagues that you need to deliver it, in this global services economy, are short in supply.


It's not simply about people

In fact, we now have roughly four billion employment age men and women in the world—more than ever before. Instead, it’s about the skills needed for tomorrow’s jobs and the education, training and experience of today’s workers. And this equation has created a talent gap. Liz Ryan, founder and CEO of Human Workplace, recently contributed to an article for Forbes.com where she comically demonstrated this talent gap for us…

“When I was a Human Resources leader, managers would tell me stories all day long about the magical, imaginary people they were looking for. They wanted somebody with ten million years of this and four hundred thousand years of that, plus a little html experience and public relations background thrown in for good measure, all for a low, low price of”… ironically the exact amount in their budget!

Obviously according to Ms. Ryan, the gap is perceived, but most of it is real. We are changing the world around us faster than ever before. On a macro level, much of our progress is out pacing our education, training systems and workforce experience. Can we change our educational systems? Sure there is always room for improvement, and we must change to stay current and relevant. But back to the war on talent, who will win?

 

 

 

 

 

 


Companies that begin by viewing their candidates as customers and their employees as brand ambassadors have the best opportunity to be successful.

The companies that take Ms. Mulcahy’s beliefs to heart and recognize that our employees are our greatest assets are the same companies that will position themselves to find, attract and retain the best candidates. Companies like Ericsson are dedicating valuable resources toward shaping their employer brands in the hearts and minds of candidates, and they will undoubtedly be successful.

“There has been a need for us to really establish ourselves and reach out to candidates,” said Gunjan Aggarwal, Ericsson’s vice president of human resources and global head of talent acquisition, diversity and mergers and acquisitions.

Through ‘You + Ericsson,’ the 110,000-employee company has established a centralized employer brand that has maximized various digital media platforms, a renewed careers website and social networks to communicate its employer value proposition.

Value proposition, social networks, digital media and brand; those terms sound more like marketing speak than human resources, true; but that’s the reality and essential conversations taking place in the most progressive companies.

 


Why should you care?

You should care because you’re an openminded company that wants to hire the best people. And if surrounding yourself with the best talent appeals to you, then you need to get acquainted with Recruitment Process Outsourcing (RPO). 

To be clear, an RPO provider is not a staffing agency. And they don’t only fill open jobs. Instead, RPOs deal with people, accompanied by tested procedures and relevant technology focused on improving an organization’s recruitment practice. Clients benefit from the experience, scale and expertise. While hiring needs are important, relationship development, long-term strategies and talent acquisition plans are far more critical and—what RPOs do best.

As defined by the Recruitment Process Outsourcing Association: “RPO is a form of business process outsourcing where an employer transfers all or part of its recruitment processes to an external
service provider.” 

Moving like the services industry, RPO is growing, fast. According to a recent study by Everest Group, RPO is a $2 billion industry and Nelson Hall recently published a report stating that the year-over-year growth from 2014 to 2015 was 17%. According to SIA’s 2014 Staffing Buyer’s Survey, almost threequarters of North American and European businesses with at least one thousand employees either currently use RPO or plan to implement RPO by calendar year-end 2016.

 


What about companies without an RPO?

Forward-thinking companies realize the value of their RPO. Partnering with an RPO provider should be viewed as a long-term commitment to maximizing the strategic value of the relationship, including:

More efficient recruiting function: RPOs offer full lifecycle recruitment to select components of the recruitment process, like sourcing, screening, onboarding, etc. Due to resources and expertise, RPO firms can provide improved time-to-fill ratios, better quality of hire and cost savings. 

Quality of hire: The RPOs most important attributes are the end products—the people. As skilled sourcers of talent, RPOs use a blend of techniques, including a heavy weight on cultural attributes to recommend the best candidates for your organization; ideally before your competitors even know they are available for hire.

Workforce planning: RPOs unlock value by aligning hiring strategies that run parallel to business goals, a critical success factor in today’s environment. The best scenario RPOs operate through executive sponsorship within an organization—typically with the most senior level HR person holding the relationship.

Access to larger talent pools: RPOs have greater access to and can generate and mine a much larger talent pool. They have the technology, networks and a wider variety of sourcing channels to recruit qualified candidates in high demand fields as well as people within specialized industries. Global RPO providers, with regional delivery centers, have the ability to recruit across multiple regions and fill positions in numerous countries satisfying local, regional and global scope.

Pipelining and talent communities: RPOs use market intelligence, direct sourcing, and a myriad of Internet sources to attract talent. Casting a wide net to reach candidates where they live, work and play; both online and off. RPOs focus on the candidate experience to promote positive interaction and employer branding.

Enhanced candidate experience: RPOs play a unique role ensuring an exceptional candidate experience. This practice includes easy to access information and personalized communication during the application process. Remember, candidates are essentially customers and they will not shy away from telling others about their experience, positive or negative. RPO partners cater not only to you as their client but also to the candidates they are sourcing on your behalf. 

Employment brand: As with Ericsson, all companies should be actively engaged in employer brand management; perception defines how your candidates, applicants, and employees view you and how you’re perceived in comparison to your competition. RPOs concentrate on employer brand tactics, developing and executing a strategy that will improve your position with candidates.

Use of technology: Beyond database driven contact management systems, or applicant tracking systems, which RPOs are experts in, a skilled RPO utilizes technology to automate processes and improve the candidate experience from every aspect of the recruitment process. RPOs tend to be technology aggregators—selecting the right mix of tools to meet a company’s unique needs. But understanding that the data remains company property.

 


Since we know companies cannot take hiring decisions lightly, we’ve created a short RPO partner checklist just for you.

With more than 70% of current RPO contracts up for renewal in the next few years, according to a recent Everest Group Buyers survey, many of these second and third generation buyers are looking for more than just cost savings and flexibility—the primary drivers of first generation RPO buyers. Companies with mature RPO partners are looking for value-add services such as improved quality of hire, time to hire for critical talent, better access to scarce talent, process improvement and market insights.

Only history will prove the talent war winners, but we do know companies that fail to evolve will likely be consumed in the battle. On the other hand, other companies will thrive, and some already are. Many of which have recognized the need for a skilled talent expert that can help them navigate their long-term needs while filling their immediate job openings. RPOs are the logical go-to solution for companies who believe that business is predicated on its people—and that those people are a critical asset to their success.