The decision to engage the right Recruitment Process Outsourcing (RPO) provider can be complex. Despite its complexity, it's a crucial process that can significantly affect an organization's hiring success. We turn to Gloria McLennan, a highly respected Global Strategic Professional Services Sourcing Executive and Global Contingent Workforce Management Executive, to shed light on this intricate process. With her extensive experience in procurement and talent sourcing, McLennan provides valuable insights into the roles involved in RPO procurement and the factors that influence successful partnerships.
In this installment of the Talent Leader Council blog series, we explore the complexities of purchasing RPO solutions and offer strategic guidance for organizations navigating this process. This post describes best practices, potential challenges, and the integral role of collaboration between HR, Talent Acquisition, and Procurement teams.
McLennan: In many companies, procurement steps into the RPO buying process because it involves purchasing services. The procurement team varies depending on the scope and complexity of the deal. However, the strategic sourcing expert always manages the end-to-end sourcing process.
Procurement roles could include a VP of Procurement or CPO (who provides high-level status updates), the Strategic Sourcing Expert primarily responsible for the entire procurement process, and perhaps internal IT involvement.
For Global RPO programs, companies may use procurement resources from their different geographies (Geos). The buyer creates a modified hierarchy if the company outsources the sourcing process to a consulting firm (e.g., IBM, Accenture, BCG, etc.).
Procurement works with the HR or TA stakeholders to determine what they want the RPO company to do for them. Then, procurement researches RPO companies that meet the HR and TA teams' RPO service parameters.
McLennan: Typically, the process begins with the CHRO or VP TA (vice president of talent acquisition) informing the CPO (chief purchasing officer) or Vice President of Procurement of their desire to engage an RPO provider to start a program or hire a new one.
The CPO or VP of Procurement would then identify the Strategic Sourcing Practitioner or sourcing expert in that category and begin building the sourcing process steps. If the process involves technology, procurement will require the services of an internal IT resource and a procurement strategic resource.
After the initial research, procurement presents its findings on each company to the stakeholders. Procurement and the stakeholders then agree on which RPO companies should be evaluated further. When evaluating the selected RPO firms, procurement presents each provider with an RFI (request for information) or an RFP (request for proposal) followed by a request for demos and presentations and, of course, an evaluation of cost.
The contracting process begins after deciding on an RPO provider, and the legal team gets involved. Depending on the type of client (Industry), procurement may include security and Information technology (IT).
McLennan: Generally speaking, no specific size or volume of RPO spend or anticipated hiring numbers dictate procurement involvement. Staff, team bandwidth, and insulation from post-negotiation supplier relationship barriers or procurement and HR decision-making determine procurement's involvement.
Net-net pricing insulates the internal HR or talent team from the throes of negotiations and bad feelings from the process supplier, which affects the relationship. The exception is companies with global programs, where legislation and compliance rulings come into play, and it becomes pretty complex, and their teams need to be better poised in that area.
Other determining factors might include capacity issues or too many geos (geographies) involved in the process. When the company involves multiple geos in the process, the teams might lack the bandwidth to accomplish the goal in a timely fashion. They might also be unable to manage a full RFP process and collaboration meetings because of different time zones.
Depending on the scope of an RPO solution, anticipated hiring volumes, and the extended or unique services needed, it could take six months or a year to bring a deal to a close. A few months back, I participated in one of the most complex solutions I have experienced in my "Sourcing" career. It was unnecessary to go the route they did, but the head of Procurement decided. Finally, the Global HR Lead stepped in and reeled it back in. There are so many variables to sourcing an RPO solution.
McLennan: Companies do not always use procurement consulting firms for these efforts. They will utilize the internal procurement resource teams to lead the effort if there is team expertise or bandwidth; if not, they go the external route. Or perhaps they have cost-saving goals and feel the internal procurement team is not poised to deliver. This process is not prescriptive; it is situation-based and based on individual company goals.
Nothing is simple with Human Capital.
McLennan: First and foremost, understand your hiring budget and allow for flexibility based on market impact and changes. Be prepared with your workforce hiring and strategy plan for today and the anticipated future. Requiring local and global talent can make for a complex solution, so have a clear, planned vision. Identify critical positions in which the business ranks high on their list of priorities.
Conduct your research on RPO companies. Choose 3 or 4 that could meet your specific business requirements and anticipated portfolio of positions. When meeting with the RPO teams, be transparent about the organization and share any important nuances that will help their team identify the right talent.
Ensure that you understand the RPO provider's process and the team resources they will have available to support your solution and specific requirements. All service providers offer different services and delivery models.
Establish a meeting cadence that includes your key team members, stakeholders, and the RPO provider's team members who will be involved throughout the process.
Be clear about your brand and image requirements and market position.
Understand the technology to be used and how that will affect the solution, the go-to-market strategy, and the pricing. Request a demo of the technology.
Ensure that the RPO provider has experience in your specific industry, preferred model, and the geographies requiring talent resources.
When you have determined your choice of RPO provider and move to the contracting phase, ensure that the legal terms meet your requirements, the project scope and plan track the agreed-upon solution and deliverables, and they are easily manageable and reportable. Close collaboration and a partner mindset are critical for both parties and crucial to program success.
McLennan: Be prepared before your meeting. Research your potential client. Understand their business history, trends, positioning in their specific industry market, and how that relates to your organizational expertise. If possible, research their previous hiring trends.
Based on your research, prepare material on market trends that align with their industry and present it when the appropriate opportunity is presented.
Bring your best resources and experience in the industry and geography to the meeting. Be inquisitive. Ask deliberate questions before selling! Identifying and engaging the right talent is an emotional, critical, and primary key to any company's success. Start your meeting with that mindset. Put yourself in their place. “Asking questions vs. telling” helps establish trust and shows genuine interest in their business and specific requirements.
Share what you have researched and learned about their company. That will open a discussion where you will understand what will change or any transformation may be happening. Listen and understand their situation, challenges, and overall requirements before providing a solution. By listening and asking questions, you establish yourself (and your company) as one who can be a valuable partner throughout the journey of engaging the right talent to meet their business requirements for success.
Navigating the complexities of Recruitment Process Outsourcing (RPO) procurement requires a collaborative effort among HR, Talent Acquisition, and Procurement teams. As Gloria McLennan highlights, understanding the distinct roles and factors that influence successful partnerships is vital for making informed decisions. The procurement process, while intricate, can lead to significant benefits when approached strategically. Organizations must weigh their internal capabilities against the potential advantages of outsourcing to consulting firms, especially in cases of global programs or high-volume hiring needs. Companies can ensure a smoother procurement process by fostering effective communication and collaboration across departments, leading to stronger RPO partnerships and enhanced talent acquisition outcomes.
Check out our talent leader council page to gain more insights from our contributors, and subscribe to the RPO Voice blog to receive valuable talent intelligence in your inbox.