Recruitment process outsourcing (RPO) has been around for a while, yet there is a lot of misconception and myths associated with it. For example, RPO is often confused with other staffing and recruiting solutions. RPO is more consultive and strategic in nature while staffing is more transactional. To understand some of this misconception and stigma associated with RPO in the marketplace, the Recruitment Process Outsourcing Association hosted a panel discussion with top RPO and TA (talent acquisition) leaders to shed some light on the topic. This article highlights a few takeaways from their discussion.
What the bleep is recruitment process outsourcing? (download eBook)
The perception of RPO in the marketplace today. Where does the stigma come from?
Ryan Baca, The Vice President of About Talent, starts the discussion by defining the ‘O’ in RPO. He says that RPO is a derivative of Business Process Outsourcing (BPO). It began with the management of technology projects and in particular outsourced contact centers.
He says that when he got into the industry, he initially struggled with the word outsourcing because it didn’t depict the kind of service they were offering. There is obviously the semantics, but the focus here is on the value of RPO, which is more of an embedded partnership with clients. While an RPO arrangement is a partnership, BPO is contractual and based on a service level agreement that is defined within the contractual elements.
What is The First Impression of RPO?
According to Kim Pope, the Executive Vice President of Global Client Solutions at WilsonHCG, the impression that people have of RPO has grown with the education of the market and success stories being shared.
However, it is different when an organization has never used recruitment process outsourcing and is not familiar with this kind of service. RPO is perceived as a threat to internal livelihoods, and some of the common questions paused include; Are we going to lose our jobs? Is this going to take away from the HR function?
Therefore a lot of conversation is on educating on the elevation that RPO provides. How it makes the HR function more strategic and elevates them as business partners within the organization because of the infrastructure that it brings that offers support that was typically not there. Especially when corporate functions are lacking key resources such as funding, time and technology, or just the resources to execute.
You have to walk them through the infrastructure that an RPO provides to help them perform their roles better. Being able to tell these stories from a change agent perspective helps change their mindsets.
Most of the time, it’s not evident until implementation, it starts clicking in when you are showing them all the market data, reports, and speed to hire, which helps them embrace RPO.
What does research show about the value of RPO?
Zachary Chertok, the Principal Analyst, HCM Aberdeen, observes that there is a transformation in HR. It is not just digital, but as managers get more performance-based roles and as more data gets into their hands. What is HR doing? What is their involvement?
The data that Aberdeen has on RPO is that it is strengthening HR involvement in strategy development. They need to be strategically balancing engagement at all levels. This is from candidate to employee and with the cost issue that most organizations are facing. How do we better manage our labor costs? And how do we gain more visibility into them?
When we take a look at data, the Best-in-Class in terms of Aberdeen’s maturity framework, which is the top 20 percent of the performers in terms of KPIs, 70 percent are more likely to engage RPOs to rectify their talent placement strategy shortcomings.
This helps them achieve longer employee tenure and reduce their turnover. Longer tenure means that they are able to redeploy these employees within the organization. They get better candidates and stronger talent that is applicable to a wide array of skillsets needed by the organization.
HR also reduces the costs of short term training requirements and the cost of turnover. They also reduce their actual investment in talent acquisition resources versus overall performance management that today for the average RPO organization reaches a ratio of 2:1 which is commendable when you think about it.
In terms of achieving a better ROI of the workforce, RPO is emerging as a strong asset.
What are the specific perceptions that people have had to come to grips with to derive benefits from RPO?
Jenifer Kihm (JAK) Senior Leader at Operant Consulting states that RPO is a true partnership, and as an organization, you have to overcome the notion that the RPO partner you are working with is a mere vendor.
An RPO partnership cannot be a vendor relationship since when you have an RPO engagement, a hiring event is done by both the hiring team and the hiring decision-maker working in collaboration to get the right fit for the organization.
Common notions such as I am the client, and you are the vendor. The client is always right do not apply in an RPO partnership. You have to work as colleagues since you are working together in tandem to bring in a pure level of expertise. This includes talent sourcing, understanding the labor market, screening, and vetting.
This allows the manager who is the other peer in the equation to do his job in determining if the person is the right fit for his team and if they can perform as required.
You have to work with the client to understand the nature of the partnership and overcome a vendor-buyer approach. This also enables you to work as colleagues in a team that’s augmenting what you want to achieve strategically. This becomes a special arrangement that allows you to realize the real power of working with an RPO partner.
Watch the webinar to listen to the above experts discuss this topic and related ones: It’s Time to Get Over the ‘O’ in RPO and Level the Playing Field in Considering Talent Resources