Recruitment Process Outsourcing in Its Infancy (Part 1 of 3)

by Allison Reilly

rpo in infancy

Recruitment process outsourcing (RPO) as a business discipline was founded about ten years ago. Since then, a lot has changed and evolved in the industry including services offered, delivery methods, buyer-provider relationships, and the players in the market. RPOA has recently partnered with the Outsourcing Institute (OI) on a webinar that covered RPO history and evolution over the past 10 years. Moderated by OI founder and CEO, Frank Casale, the dynamic discussion included representative from both the RPO customer and provider community. RPO providers represented by Mike Mayeux, Novotus CEO and RPOA President, and John Younger, Accolo Inc., CEO and RPOA Past President. RPO customers represented by Mark Baudler, Sr. Manager, HR Services and Processing Improvement, Panduit, and Kipp Sassaman, Vice President Human Resources, Fikes Wholesale, Inc. In this 3-part series, we cover the 3 chapters of the discussion: RPO past, present, and future. View webinar. 

RPO in the Beginning

In the beginning, there were two types of RPO provider: those that did high volume, low complexity work and those that did low volume, high complexity work. Many HR leaders weren't comfortable with the idea of outsourcing their recruiting, although a few major companies were willing to take the chance and give the idea a try. In fact, a large majority of leaders would have cautiously considered the idea at best. Some would have rejected the idea outright, while a small number would have been openly supportive of the idea of outsourced recruitment.

"In those early days, it was a very interesting marketplace being an evangelical marketplace," said Mike Mayeux, CEO of Novotus. "You had to educate every buyer as they came along."

John Younger, CEO of Accolo, explained that in the early days of RPO many of the projects were projects that the recruiting agencies and contract recruiters failed on, or were the projects that no one wanted. One of Younger's first projects was to find a parasitic engineer for Texas Instruments, but specifically someone who was born in India, educated and trained in the United States, and who wanted to return to India. Younger found this person, pointing out an accomplishment that RPO is uniquely capable of achieiving.

Why RPO was Needed 10 Years Ago

RPO was only able to exist and to survive at the turn of the century because of several key factors. The first was the boom and bust of the early 2000s, when the market became much more complex. The second is the acceleration of the number of new tools and companies entering the recruiting space, an acceleration that continues to speed up with each passing year. The third was the increase in budget scrutiny, where the trend was the businesses were looking for ways to increase operational profits, to preserve cash, and to lower fixed costs. The final factor was the recognition of core and context: hiring the right person who is core while the hiring process is contextual.

"Ten years ago, outsourcing was becoming popular in other parts of the business, or was already popular." Mayeux said. "Because there's been enough success out there in outsourcing other things, RPO became a more relevant topic."

RPO's Evolution into the Present

The main issue for HR leaders a decade ago was getting executives to consider talent acquisition and human capital ideas. Nowadays, that mindset has shifted in executives where they are okay with being a customer of recruiting services so that the company can focus what generates revenue. There also isn't two distinct types of RPO provider anymore, as most providers do both high volume/low complexity work and low volume/high complexity projects. Part of the mission back then was that companies were already outsourcing their recruiting using contract recruiters, recruiting agencies, job boards, and applicant tracking systems. The mission has changed, since companies realize that they have been outsourcing recruiting this whole time, and that it's okay. Now, the mission continues as RPO is presented as another form of recruitment outsourcing that's more cohesive.

To learn more about the past, present and future of RPO, our latest webinar featured a panel discussion profiling the changes that have brought this industry from “the wild wild west” to the new landscape of the current competitive market. Now that the dust has settled, the RPO industry has grown significantly over the past 10 years and has increased in sophistication. View this webinar's video to learn how today's RPO adds extraordinary business value.

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