Recruitment Process Outsourcing (RPO) continues to grow as organizations seek to optimize their operations strategically in a dynamic environment largely characterized by technological disruption and talent shortage.
The Recruitment Process Outsourcing Association partnered with leading industry analyst, Aberdeen, on a panel discussion including top RPO leaders to understand the evolving value proposition of RPO in the current talent acquisition environment.
This article summarizes the highlight of this discussion.
How do you describe today's RPO?
According to Kim Pope of WilsonHCG, "RPO means different things to different organizations." For Pope, an RPO implementation starts by understanding the client's journey in order to build a proactive function, whether it is full-cycle recruitment, providing an end-to-end solution, or a specific recruitment function.
In general, RPO often includes sourcing, screening, innovation, branding, and deploying the necessary technology to support the process.
"Understanding the journey of the organization from a talent acquisition perspective provides the agility and flexibility necessary to align the talent solution with the organization," Pope emphasized.
Some of the value RPO brings to an organization include:
- Outside perspective
- Best practices
- Data analysis
Ryan Baca of About Talent, a Denver-based RPO company, adds that RPO started with the recruitment process itself, but it has evolved. Today, RPO provides more operational value in terms of employment branding and also incorporates the latest technologies and innovations within the recruitment space. It [RPO] has become a consultative partner to many organizations on technology and strategy.
What advantages does RPO provide over traditional recruiting?
RPO is a very flexible and customizable talent acquisition solution. Jennifer Kihm of Operant Consulting says, as a talent acquisition consultant, she works on RPO projects and with clients of all sizes. Some RPO projects are very small, where there is a particular hiring goal that needs some specialization, and the incumbent team doesn't have the resources to meet that need. RPO can be used for filling specific job families or locations. On the other hand, full-cycle PRO means the RPO becomes the legitimate internal recruitment team for the organization from top-to-bottom. This involves:
- Headcount Planning
- Job Definition
- Data Management
- Labor Market Mapping
- ATS (Applicant Tracking System) Consultation and implementation
- Reporting and Analytics
Kihm stated that she built recruiting functions from scratch using RPO, where the organization had no recruiting capacity, and in other cases, she only retooled or augmented the recruiting function with RPO to expand the recruiting capacity.
RPO avails all the necessary tools in one comprehensive toolkit.
Leading RPO providers have a lot more capacity because RPO is their core business, and they have invested in the necessary infrastructure that allows them to deliver expert level service by being able to leverage the key components.
What does the research say about RPO?
Zack Chertok of Aberdeen argued that RPO brings the cumulative strategic knowledge that allows RPO companies to source top talent for their clients.
According to Aberdeen's research, organizations-in most cases-don't know what candidates are looking for when using traditional sourcing channels. However, an RPO firm not only understands the employer's needs but also what candidates are looking for in a job. This includes:
- Competitive growth opportunities
- Relevance to the organization
- Alignment between their goals and those of the organization
According to Aberdeen's research:
- RPO users are more likely to hire one of the top three candidates 50 percent of the time.
- RPO increases employee tenure to 1.6 times as compared to traditional recruiting and reduces employee turnover.
- For every one percent an organization invests in RPO, they are 1.8 times more likely to hire the best candidate as compared to traditional recruiting.
What is the common perception of RPO in the marketplace?
Baca observes that though RPO is a derivative of business process outsourcing (BPO), RPOs are committed to forming strong partnerships with their instead of a contractual one.
According to Pope, the perception of RPO in the marketplace has evolved with success stories. However, some misconceptions remain, namely that people may lose their jobs where an RPO is involved or that RPO might replace the HR function. "There needs to be more conversation on how RPO provides the much-needed infrastructure and support to help organizations elevate their recruiting function," Pope argues.
Understanding RPO Cost: Price Vs. Value
Kihm explains that organizations should be more concerned about optimizing their spend for the level of service an RPO brings. An RPO firm should start by analyzing a client's needs and goals and augmenting these with the right talent.
Chertok lays down these important metrics about RPO buyers:
- Reach their KPIs by using RPOs to rectify their talent management shortcomings.
- Get better and stronger talent that has a wide array of skill sets needed by the organization.
- Reduce costs associated with short term training requirements.
- Reduce turnover costs.
- Reduce the cost of talent acquisition versus overall performance management.
Pope concludes that an RPO is a holistic solution that can be tailored to an organization's initiatives, business drivers, and challenges.
To learn more, listen to these RPO experts share their perspective in the panel discussion: It's Time to Get Over the 'O' in RPO and Level the Playing Field in Considering Talent Resources.