Recruitment process outsourcing can add value to your organisation, improve retention and save you money – what’s not to like? asks Nick Boothroyd.
Recruitment process outsourcing (RPO) is one of those things that HR people are suddenly talking about. Companies still need to recruit but they need to make smart decisions to stay ahead of the game and they can’t afford to get things wrong. There is an interesting pool of talent out in the market now and companies need to find and retain the special people who are right for them.
A well-structured and flexible RPO service can add value at all stages of the recruitment lifecycle. Using the specific recruitment expertise of an RPO partner (which is often a very different skill set from an HR professional), a programme can be developed which will help to reduce attrition and increase retention of your staff, who are at all times, your key asset.
Achieving a good level of retention is often a stated aim of any organisation, but a lot of companies don’t know what level they are starting from. It is difficult to measure ‘success’ and to evaluate strategies if you don’t know your starting point. The first job is to establish your prevailing stability index; this is defined by the CIPD as:
Staff turnover = total number of leavers during the period multiplied by 100, and then divided by the total number of positions in the company.
Once you have established where you sit on the scale, you have to decide where you’d like to be. Obviously the driving force behind all this is money: the fact is that replacing staff is an expensive business and is a metric that is harder to establish and is made up of a number of elements. These include costs relating to exit, temporary resource cover, recruitment, interviewing, hiring, orientation, administration and training. And also all those hidden expenses such as lost productivity, customer dissatisfaction, reduced business and lost expertise.
All those direct and indirect costs can add up to quite a bit – estimates vary between 30% and 400% of the annual salary of the replacement employee (depending on the seniority and salary of course!) Needless to say, with these kind of figures, recruitment methods and improved retention can quickly become a board level agenda item.
Identify causes
Against this background, how can an RPO solution help address the problem? First of all it is important to identify what have been the causes of employee dissatisfaction. There are a range of techniques which are often best delivered through an independent party as opposed to an internal function. Your RPO partner should establish why your staff are leaving. Techniques include exit interviews and surveys, which are also supported by constant information gathering through ongoing employee satisfaction surveys and a regular onsite presence.
Once the full range of reasons has been evaluated, it is essential to feed this information back into the recruitment process itself. Are you attracting the right talent in the first instance or is there a trend that indicates your attraction selection process is flawed?
The RPO team will be able to evaluate your existing processes and identify new techniques for tapping into a fresh and relevant talent pool. The consultation should review your candidate attraction policy and look deep into how you position your company as a recruitment brand.
This activity will also look at style and content of messaging (does it truly reflect your organisation and what it stands for?), use of imagery (is it clear, appropriate and relevant?) and how the company is represented by partner agencies and hiring managers. It should review the process in terms of company collateral and the process for engaging with applications – is it efficient, professional and consistent? Is it adhering to current legislation around discrimination?
Once selected for interview how are your potential new employees handled? Is there a slick, repeatable process that leaves the candidate inspired, or is it ad-hoc and inconsistent?
What happens between offer and start-date? Are you maintaining contact, keeping interest high and managing other opportunities that may be presented to your hard-won new employee? An effective RPO service will manage these periods and ensure you don’t lose talent in this critical time.
Lasting impressions
Day one arrives and your new employee arrives fresh-faced and full of anticipation and enthusiasm – what do you do with him/her? Do you have an established and efficient on-boarding process? The manner in which you orientate your new staff can create a lasting impression that ultimately can impact retention. Get it right and your new employee integrates quickly and feels wanted and part of the team which also impacts on his or her ability to become productive. Get it wrong and disillusionment can set in and you are fighting to get that individual re-engaged.
Outside of the cost saving relating to reduced staff turnover comes the benefits associated with better process, more favourable negotiated terms with external staffing partners and the implementation of direct hiring programmes and referral schemes. These value-adds are standard practice for an RPO organisation and when linked to service level agreements around time-to-hire, cost-of-hire and improved retention, can significantly reduce your recruitment costs – in some cases by up to 40% or more.
So what’s the catch? Choose the right RPO partner through effective due diligence, referencing and the risks associated with outsourcing these functions are negligible. An ideal solution will be modular and highly flexible and the contact points within the RPO organisation will be hands-on and a good cultural fit for your business.
However, at no time should you delegate the ultimate responsibility for final hiring decisions to the RPO partner – this should always stay a core internal decision. But the day-to-day strategy and activity can comfortably sit outside your organisation so long as your selected RPO partner reflects your culture, understands your vision and has bought into the concept of partnership.
A good RPO solution will bring significant additional value and demonstrable cost saving to the table. It should flex with the needs of your company and adapt its solutions to suit your market and your particular challenges. No wonder RPO is gaining attention.
Nick Boothroyd is RPO Director at www.RPOZone.com. For more information, please email info@rpozone.com
