How Do You Determine if RPO is Right for Your Small or Midsize Business?

Recruitment process outsourcing (RPO) provides many advantages to organizations of all sizes, including small and midsized organizations as explained in a recent webinar by Mike Palmer and Mike Tastle of Accolo, a recruitment process outsourcing provider based out of Dallas, Texas.

In "Recruitment Process Outsourcing: A lifeline in the War for Top Talent", Zach Chertok with Aberdeen Group provided the following insight on the advantages of using RPO: “Companies that do not partner with a RPO provider are 59% more likely than companies that do to be unable to establish a talent pipeline for their open positions”. Based on the same report, RPO customers are “17% more likely than non-RPO customers to find that more than 50% of their workforce is top quality.”

Recruitment process outsourcing is not the only talent acquisition solution and is not the right solution for everyone. How do you go about determining if RPO is right for your small or midsized business? Palmer and Tastle provide these guidelines to help you assess whether RPO is the right solution for your organization:

1. Why are you considering outsourcing? Figure out your biggest recruiting challenges. If you’re outsourcing your recruiting to help find top talent, make sure you find an RPO provider with experience in hiring in your geography and in your business sector. 

2. What do you want to outsource? There are different parts of the recruiting process and different function within recruiting that can be outsourced. 

For example, if you're an organization that hires 100 positions a year, 60 of them are in a call center which you’ve got a really good control over its recruiting, but you have 40 other positions that you need help recruiting for, you can outsource your 40 positions to an RPO provider and keep your call center recruiting in-house. 

Alternatively, there might be certain elements of your recruiting process that you want to outsource (e.g., sourcing, managing the process flow, or managing the candidate experience).

Get clear on what you want to outsource before you go to market to find an outsource provider. 

3. Be clear about the good, the bad, and the ugly in your hiring process. Do you have a clear idea about what is working and what’s not working in your recruiting process? Many HR people don't generally recognized some of the challenges in their existing recruiting before they outsource it.

Really having a good sense of what you want to fix is critical. To understand what needs fixing, it is important to have baseline performance metrics. For example: what is your time to fill for various jobs? What is your quality of hire? What is your existing cost per hire?

But most importantly, have a baseline hiring satisfaction survey. Get a good sense of what hiring managers like about your existing recruiting process, and what they don’t like about it. Learn about what they like about the number of candidates, quality of candidates, how they use technology, what’s working, and what’s not.

Knowing where you are is the key to understanding where you want to be.

4. Are you seeking a short or long-term solution? Recruitment process outsourcing is a very custom talent acquisition solution tailored to each organization. Some organizations might be going through an acquisition and need to re-engineer their recruitment process to adjust to the new organizational structure, some might be out growing their business and need temporary help, yet others might be looking to offload the entire recruitment process of the organization to an RPO provider to build the capability of their recruiting over a number of years.

Figure out exactly what you need and what you’re comfortable with, and work with an RPO vendor on creating a custom solution that is right for your organization.

Recommended: Four Steps to Starting a Successful RPO Engagement

5. Know your budget. Consider quality, cost, and speed. Do you know what your cost per hire is? Many organizations don’t have a clear handle on their recruiting expenses and recruiting metrics. The cost per hire is one of the most important measures of recruiting expenses. Many factors contribute to the cost including: cost of technology, cost of advertising and marketing, cost of the recruiters who are doing the work, cost of the hiring managers who are interviewing the candidates, and cost of travel or relocation. 

Use this recruitment cost ratio (RCR) calculator to figure out your cost per hire.

Other metrics are also important in assessing the quality of your recruiting, such as the interview-to-offer ratio. For example, if your hiring managers are interviewing 8 candidates for every open position, that's not a good use of their time. An RPO will help you get that figure down to a much more manageable number and reduce your hiring managers cost. 

6. Be aware of the transitional period. Your RPO partner should deliver on the results they promised in the RPO engagement; however, just like with onboarding new employees, you should expect an initial transitional period (of about 1-3 months) to get the RPO team up to speed and get them to know your organization, work out kinks in the process, and implement any new technology.

More importantly, expect some time to develop the hiring manager and the recruiter relationship. As the recruiters get to know the hiring managers, what works and what doesn't, the type of candidates they're looking for, you start to see a lot more efficiency drives into the recruiting process.

Don’t judge the RPO solution based on the first 4-6 weeks of the engagement; look at the long term results and take the time to work through that change. Fundamentally, RPO is a change management exercise with the goal to achieve success at the end of the day.

Suggested: Why Smaller Businesses Should Outsource Their Recruiting. 

To learn about how the RPO relationship works for small-to-midsized organization and making the business case for RPO, watch Palmer & Tastle’s webinar: RPO for smaller business? Really?