RPO Smart recruiting
Recruitment Process Outsourcing (RPO) is the increasingly common practice of a company outsourcing its recruitment function to a third party, which possesses the resources and expertise to source candidates for some or all of its vacant roles.
This typically involves RPO providers embedding dedicated resources either onsite or offsite to focus on direct sourcing of roles across all or part of their business.
“RPO solutions are custom-designed for clients, addressing specific areas of focus that the client has identified,” says Deanne Barbary, Global Head of Operations, Hudson RPO.
Examples of RPO aims include:
• To reduce excessive recruitment costs;
• To source for specific roles; and
• To improve retention rates
RPO vs. in-house recruitment
The benefits for organisations which move to an RPO model include bringing in dedicated resources and expertise to devise an effective recruitment solution, says Barbary.
“RPO solutions are typically underpinned by some clear service-level agreements which hold the provider accountable for delivering outcomes around service, quality, cost and efficiency,” she adds.
Recruitment outsourcing firms take on the responsibility of efficiently adjusting resource levels when hiring fluctuations occur, so the client does not bear the burden of carrying unnecessary staff, or conversely, being short when greater resources are required.
From sourcing résumés to conducting interviews and negotiating offers, acquiring a new employee taxes a company’s internal resources. Plus, each day a job requisition remains unfilled, the business loses the benefit of that employee’s contribution and wastes recruiting and budgetary resources that could be dedicated to other initiatives.
Outsourcing all or part of the internal recruitment function can reduce time-to-hire dramatically by leveraging a global database of thousands of screened, specially-skilled professionals and sourcing channels that significantly increases the talent pipeline.
“Also, RPO solutions allow access to a greater amount of recruiting and screening professionals than a company can carry on its own staff,” says Barbary. “They can scale their volume of work with the requisition load.”
One of the most common problems seen with the recruitment lifecycle is that it’s a disjointed and uncoordinated multitude of practices – good and bad – across organisational functions, departments, divisions and regions. “Often, this causes overlap in advertising purchases, training and on-boarding procedures, as well as poorer hiring decisions and ultimately higher operational costs,” says Barbary.
Procuring an RPO project gives companies the opportunity to rethink these processes. “The RPO vendor will help examine your recruitment process workflow(s) to determine where overlap, excessive cost, and inefficient practices may exist,” she explains. “Then, an outsourced model can be created for you, providing you with service levels and success metrics that exceed the status quo.”
These practices have been shown repeatedly to yield increased efficiency and satisfaction with the recruitment lifecycle, resulting in overall cost reduction for companies.
“All of these factors contribute to achieving lower cost per hire – your ultimate goal,” says Barbary.
Risks to business
While RPO can yield great returns for companies, poor control of the process or improper service-level agreements will result in poor accountability of RPO, says Annie Yap, Group Managing Director, AYP Asia Group.
“Also, if the solutions provider does not understand client requirements, there might be a potential mismatch of candidates,” she adds.
Getting the right people who not only possess the right skills and experience, but are also culturally-aligned to both organisations can be an additional barrier to effective RPO solutions.
“The way that we mitigate this is by involving our clients in ‘culture fit’ interviews so that they participate in the decision around the appointment of the individuals to ensure that these people will work effectively within their business,” says Barbary.
Another challenge can be gaining the buy-in of hiring managers who have been working with other agencies and formed strong relationships with them.
“They (hiring managers) can be reluctant to utilise the new model as a result of this,” says Barbary. “We mitigate this through extensive business consultation in the implementation phase, to ensure that impacted stakeholders participate in the design of the solution, processes, and selection of Preferred Supplier List agencies, etc...”
Companies also need to ensure there is effective executive sponsorship for the solution, as recruitment outsourcing firms typically embed a change in the way they go about their hiring. “We need senior level support to ensure that managers understand why the change is being made and what is required of them,” says Barbary.
Top benefits of RPO
• Cost reduction through shared risk
• Faster time-to-hire
• Streamlined recruitment processes
Source: Hudson RPO
RPO in the chemical industry
Hudson was tasked with recruiting highly specialised positions across diverse and remote geographies for a global industrial client specialising in the chemical industry in a highly competitive candidate market.
“Strategically, our client also wished to increase the range of services available to its customers by increasing revenue generated from its equipment and project management division, thereby decreasing its dependence on chemical sales and they needed a strong recruiting partner to do this,” said Deanne Barbary, Global Head of Operations, Hudson RPO.
Specifically, the client’s goals were to:
• Source highly specialised roles in extremely diverse and remote geographical markets
• Decrease business reliance on candidates sourced via agencies and employee referrals
• Reduce the time taken to fill open roles
• Identify and grow talent pools utilising a range of channels, particularly social media.
Hudson RPO designed, implemented and managed a scalable solution covering end-to-end permanent recruitment for the client across Asia-Pacific, with a team of 18 staff located across five hubs in Australia, Singapore, India, China and Thailand.
As a result, a 96% direct-fill rate was achieved across locations as diverse as Fiji, Indonesia, Thailand, and New Zealand. Agency usage was also reduced from over 90% to 4%. Average time-to-fill was reduced from over 50 days to 21 days.
“Hudson RPO has also developed and implemented a social media strategy that has led to this channel as a candidate source increasing by 50% year-on-year,” says Barbary.
Proactive competitor mapping of target organisations in the water treatment equipment and project management area also led to the hiring of a high quality senior executive to lead the growth of this division.
“By recruiting this senior individual via the Hudson RPO solution, the client’s reputation in this area was significantly enhanced, a key competitor was destabilised and we saved our client huge fees that would otherwise have been paid to their search provider,” said Barbary. “The appointment has also led to two further competitor employees approaching our client about opportunities.”
Hiring using Big Data
More companies are turning to an algorithmic assessment of Big Data to carry out hiring. For instance, according to an article by the Wall Street Journal, Xerox Corp. used to pay lots of attention to applicants who had done the job before when hiring call centre staff.
However, Big Data told the printing company that experience doesn’t matter. Analysis of data revealed that what does matter in a good call-centre worker – one who won’t quit before the company recoups its $5,000 investment in training – is personality.
According to the article, after a half-year trial that cut attrition by a fifth, Xerox now leaves all hiring for its 48,700 call-centre jobs to software that asks applicants to choose between statements like: “I ask more questions than most people do” and “People tend to trust what I say.”
RPO providers are increasingly tapping onto cloud-based software to support customers so as to provide RPO solutions in a more cost-effective manner, says Annie Yap, Group Managing Director, AYP Asia Group.
AYP uses an Australian cloud-based recruitment solution through which on-site consultants can tap into the international database of candidates during sourcing. “This means AYP need not invest in high cost data centre infrastructure,” Yap explains.
“Therefore, the cost of delivery is cut down, translating into lower cost for the client as well.”