Recruiting Process Outsourcing (RPO) Can Improve Hiring Results: Four Ways to Do It

By Tom McGuire | October 19, 2017

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.

What makes a Recruitment Process Outsourcing (RPO) partnership successful?

1. Detailed Process Design in Advance of RPO Engagement
2. Defined Process and Results Metrics 
3. Company-Led Employment Branding  
4. Most Critical Roles Identified in Advance 

Let's explain each.
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.

Watch out for:

• RPOs who provide a ‘standard’ process that doesn’t reflect your hiring standards, roles and responsibilities, critical positions, etc.
• Lack of differentiating the way requisitions are handled, sourcing is approached or measures of success are analyzed.

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. 

Watch out for:

• Missing or unclear Service Level Agreement metrics.
• Failure to provide accurate timely metrics – particularly for reasons the RPO feels is outside their ability to control.

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.

Watch out for:

• Branding efforts that are generic or indistinguishable from other companies and competitors.
• Slogans, microsites or messaging created without data-based insights from the candidates you most want to attract.

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. 

 Watch out for:

• RPO arrangements that include a wide range of requisition types, hiring managers, geographies, business units, etc.
• Arrangements that span ‘high talent availability’ in the marketplace as well as ‘low talent availability’ (meaning, scarce talent for key roles).
• Lack of a dedicated, experienced sourcing team working on the most critical, hard-to-fill roles.
• Feedback from hiring managers that they’re not seeing enough qualified candidates.

RPO providers, with the best intentions, will sell HR leaders on their ability to do all of these things: 

• Design Process
• Define Metrics
• Craft the Employment Brand
• Manage the Hiring of a Wide Variety of Roles

But in reality, the core capabilities of RPO firms are not process 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.  We can help you think it through in a data-based, objective way.

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You may also want to read: RPO Lessons Learned: Been ARPOED? How to Recover from RPO Dysfunction.  And check out how our Talent Acquisition Consulting Services can help. We've helped many get the most out of their Recruiting Process Outsourcing partnerships - Contact us to learn more!

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