Recruiting Process Outsourcing firms (RPOs) often have a reputation for overpromising and under-delivering, but does it have to be that way?
Under the right circumstances, RPOs are a valid alternative for supplying talent for all but the most critical roles. What are “the right circumstances”? After years of implementing, managing, and observing these arrangements across various industries, we have identified four essential elements to a successful RPO partnership:
1. Detailed Process Design in Advance of RPO Engagement
Of all the HR functions, recruiting most benefits from a detailed, agreed-upon approach to process design. Ironically, many HR leaders skip this step – or adopt the RPO’s process - because they believe this is what they’re buying with an RPO arrangement. In reality though, left to their own devices, an RPO will implement a standard (generic) process that doesn’t take into account the organization’s priorities, ways of working, critical talent, etc. An RPO is an outside organization and as such, a step away from understanding the organization, cultural norms and keys to success. Detailed, yet practical, process design is the bridge that connects the RPO, HR, and hiring managers to one another and creates an effective partnership that can deliver the required business results.
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2. Defined Process and Results Metrics
Managing by metrics is the most powerful tool in the HR Leader’s RPO kit. Both process and results metrics serve important, yet different purposes. Process metrics are the key to predicting and fulfilling desired outcomes – e.g., number of candidates per requisition, number of days between interview and offer, number of requisitions per recruiter, etc. Results metrics are the cornerstone of service level agreements and indicate opportunities for improvement over time. These typically include time to fill, hiring manager satisfaction, etc. The targets for these metrics must be carefully considered up front, as they inevitably impact both the cost and the effectiveness of the RPO arrangement, and management routines must be firmly established to periodically review metric results and make timely course corrections.
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3. Company-Led Employment Branding
Employment branding is increasingly important to all businesses to cut through competitive clutter and target and attract the right talent. In the case of an RPO, the discipline of employment branding and how it is activated throughout the hiring process is of even higher importance. As an outsourced solution, RPOs are inevitably challenged to represent the client organization in the same way – and with the same level of quality and authenticity – that an in-house recruiting team is able to do. A well-defined and activated employment brand will help to close this gap, while attracting the right kind of talent.
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4. Most Critical Roles Identified in Advance
RPOs – particularly in a new engagement - cannot easily or effectively manage a wide range of differentiated requisitions and hiring manager requirements. The key to a successful RPO engagement is to allow them to be very targeted in their sourcing and screening methods by assigning them specific roles. Traditionally, RPOs’ greatest successes come when handling large numbers of openings for a small number of roles – e.g., call center, sales reps, or retail employees.
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RPO providers, with the best intentions, will sell HR leaders on their ability to do all of these things:
But in reality, the core capabilities of RPO firms are not design, analytics or branding, and their margins correctly reflect that. Companies need to create and own these key aspects of recruiting capability themselves by building them independently of the RPO relationship. Doing so creates the foundation for success by allowing the RPO firm to do what they do best – source and screen targeted candidates.
With these levers in place, RPO is a valid alternative for many hiring situations. Whether fine tuning an existing arrangement or implementing from scratch, companies can confidently secure the flexibility and expertise they seek while avoiding mismatched expectations that RPO arrangements too often deliver.