Economic downturns typically follow predictable employer response patterns, including immediate cost-cutting measures, hiring freezes, and workforce restructuring. The 2008 Great Recession and the COVID-19 crisis both demonstrate these same behaviors across industries. Mid-wage jobs accounted for 60 percent of the positions lost in 2008 but only 27 percent of the recovery gains, as companies streamlined their operations. Today's soft hiring market presents a familiar situation - reduced hiring volumes while maintaining competitive talent capabilities, pressure to optimize costs while preserving strategic positioning, and balancing short-term budget constraints with long-term growth preparation.
But what if soft hiring markets actually create strategic opportunities rather than just obstacles? In this interview for RPOA's Talent Leader Council, we sat down with Heather Taylor, Director of RPO Solutions at MAU Workforce Solutions. We discussed how recruitment process outsourcing (RPO) can provide a strategic advantage during market downturns. Instead of defaulting to traditional cost-cutting vendor relationships, forward-thinking organizations are discovering how strategic RPO partnerships deliver long-term benefits in positioning.
The major takeaways for employers are:
Takeaway 1: Soft hiring markets create optimal conditions for strategic RPO partnerships that provide AI technology access and workforce planning capabilities that organizations cannot develop internally.
Takeaway 2: RPO partnerships enable strategic advantage during market downturns through employer branding, process optimization, and talent pipeline development.
Takeaway 3: Technology capabilities, cultural alignment, and long-term value creation should guide RPO selection rather than traditional cost-reduction frameworks.
The shift from active to soft hiring markets changes how RPO partnerships operate. Taylor explained how this transformation creates new opportunities for strategic collaboration. These opportunities extend beyond traditional recruitment services.
Taylor: During an active hiring cycle, RPO partners primarily focus on speed and scale. They quickly source and hire candidates to meet clients' hiring needs.
In a soft hiring market, an RPO shifts from filling high-volume roles to being a strategic or consultative partner. They focus on quality of hires over quantity. RPO providers become strategic partners who help companies refine their talent strategy, optimize processes, and build strong talent pipelines.
Taylor provided concrete examples of how RPO partners provide a strategic advantage. These examples extend beyond traditional recruitment services. They demonstrate the diverse capabilities that RPO providers offer to support broader organizational objectives.
Taylor: As an RPO provider, MAU works mainly in the manufacturing and supply chain spaces. We provide market intelligence to help manufacturers and supply chain companies make informed decisions. This information could be anything from compensation data to safety or legal recommendations. We can work with in-house safety or legal teams to develop SOPs for client organizations. This helps optimize processes and improve efficiency.
Working with an automotive supplier, MAU evaluated their overall talent acquisition process through value stream mapping and lean tools. These tools eliminated waste and repetition in their talent acquisition processes. People often think of using lean tools on the manufacturing floor, but they also benefit office and administrative functions.
A final example is particularly relevant to employer branding and marketing. We have an in-house marketing team that's worked alongside our customers. We developed compelling marketing campaigns and a strong narrative over a range of platforms. This helps them attract top talent once hiring needs increase.
Taylor emphasized how soft hiring markets can trigger organizations to shift from reactive hiring to proactive workforce planning. This transformation enables strategic positioning for future market conditions rather than responding to abrupt hiring needs.
Taylor: An RPO can leverage data and analytics to help their customers and clients with forecasting. We can capitalize on growth in AI and technology platforms to bring in different partners.
This approach enables organizations to establish a strategic position for future market conditions and technologies. The focus shifts from managing sudden demands to preparing for competitive advantages when market conditions change.
Taylor explained that an RPO strategy in a soft market focuses on different metrics than in an active market. Soft market metrics, such as quality, efficiency, and positioning, demonstrate a strategic advantage over tactical speed-based metrics.
Taylor: We talked a little bit about speed being one of the main factors. You think of speed in a vibrant market. But in a soft market, quality, costs, and efficiency are the main metrics we can influence. With source of hire, an RPO strategy can help companies better understand sourcing channels. They know where those top-quality candidates come from. There's a more targeted and efficient use of marketing dollars towards sourcing.
We can improve the quality of hires because we have more time to invest in individual candidates. Net promoter scores from candidates are another metric that can be impacted. With that lower volume of applicants and more dedicated, focused time with them, we can ensure candidates are having a positive experience. This helps strengthen the employer brand in the marketplace. The final metric I'd like to mention is cost per hire. An RPO helps optimize hiring processes and improve sourcing efficiencies. With that, we can lower that cost per hire once hiring resumes.
Traditional misconceptions of outsourced providers hinder organizations from seeing the strategic benefits of an RPO partnership in soft markets. Taylor addressed common misunderstandings about RPO, including customization, company size requirements, and budget considerations. These misunderstandings limit strategic opportunities.
Taylor: One of the largest misconceptions I see in the market is that RPO is one size fits all. It's an all-or-nothing solution. That is not the case. RPO solutions are highly customizable. A company can have an all-inclusive RPO, or it can be segmented. You can outsource part of the process, such as the sourcing, contingency or the onboarding process. We want to meet the individual needs of each client.
It's also a misconception that people believe it's only for large companies. They think it's only for companies with hundreds of open roles. You may only need to hire 15-25 people and do not have the internal capacity to do so. An RPO can customize a solution for you.
The final misconception is that it's too expensive for those on a budget. It can actually be a cost-saving measure. It offers flexibility and scalability compared to having a fixed-cost internal TA team.
RPO evaluation during soft markets requires different considerations than traditional vendor selection. Taylor provided guidance on assessing long-term value creation potential. She explains establishing collaborative partnerships that offer a strategic advantage.
Taylor: My advice to TA leaders is to view an RPO as a strategic investment and a true partnership. You want to ask a potential RPO partner how they can help build talent strategies. that align with long-term business goals. Ask what kind of market insight and data the RPO partner can provide that you don’t have access to. I recommend they meet with several RPO partners to evaluate each individually. TA leaders should think about the different parts of the process they may want outsourced. Consider the provider's experience in your given industry. If their experience aligns with your expectations, then collaborate and work towards common goals with that RPO provider.
Ultimately, as a TA leader, you also want to ensure that the provider you select aligns with you culturally. That should be a big part of this decision-making process as well. That partner will be an extension of your internal talent acquisition team. Having that cultural alignment will help the extension be seamless to internal stakeholders and external candidates.
Learn how to assess RPO providers: Chief Analyst Ben Eubanks Explains the Value of RPO Partnerships
Innovative TA leaders recognize that soft hiring markets create optimal conditions for RPO partnerships. These partnerships provide a strategic advantage through enhanced capabilities and competitive positioning. The transformation from vendor relationships to strategic partnerships helps organizations build competitive differentiators. This change can happen during reduced hiring periods.
For more insights from other Talent Leader Council contributors, check out our TA Leader Council on the RPO Voice blog, which features interviews with top talent acquisition experts.