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RPO: Reducing recruitment costs without compromising on talent


Graham Snuggs explains how recruitment process outsourcing (RPO) is an ideal solution for organisations looking to reduce the overall cost of their recruitment and time-per-hire, without compromising on the quality of talent they bring in.

Recruiting the right staff, with the right skills, in the right role has always been an important factor in an organisation’s success. But in the current economic downturn, making the right recruitment decision is nothing less than crucial.

However, for many organisations, the whole process of recruitment – the money spent on advertising, the hours spent sifting through CVs, the time spent interviewing and screening candidates and resources needed to run the assessment process – is an administrative headache that removes HR resources from other strategic projects.

In today’s uncertain and highly competitive business climate, organisations simply cannot afford to make poor recruitment decisions. Many are now seeing recruitment process outsourcing (RPO) as a solution to reduce their recruitment costs, alleviate their administrative headaches and ensure they recruit and develop top-quality talent.

So what took so long? In the past, some organisations were hesitant, initially, about handing over their recruitment process to an outside agent because they knew how easy it was to lose a good candidate if any part of the recruitment process failed. They were also naturally wary following their experience of the working practices of some recruitment industry consultants.

"In today’s uncertain and highly competitive business climate, organisations simply cannot afford to make poor recruitment decisions"

Problems can range from a candidate query not being answered quickly, a job application getting lost mid-process or interview feedback not being delivered in a timely manner. Simple mistakes maybe, but they will be enough to put off the candidate. Worse still, the candidates will probably talk about their bad experience to other people who could be potential recruits or customers, which could damage the organisation’s brand image. Just imagine how risky it would be if 1,000 potential employees all suffered a poor recruitment experience.

In 2007, Reed Consulting researched the candidate experience and found that 29% of people would hang up – and not bother calling again – if they rang a recruitment hotline that wasn’t answered within 30 seconds. Nearly all (93%) of the candidates would tell their friends and family if they had a poor recruitment experience, and of those, 34% would change their purchasing decision.

RPO delivers more than just cost cutting

RPO does save organisations money, but it can also add value in other important ways. A true RPO provider will be responsible for the entire end-to-end recruitment process; it will constantly move your recruitment process forward in response to market drivers, and ensure that the people who are hired will make a positive impact on business performance.

So what should an organisation look for in an RPO supplier? Well, firstly they should understand that it is a premium management service. A good relationship with an RPO supplier means a long-term trusted partnership, which should be a minimum of three years in order to deliver optimal commercial value.

The relationship should be integral to the organisation’s resourcing and HR strategy. The onus is on the client to be open and inclusive with its RPO partner, sharing not just the corporate vision but also the business challenges and recruitment difficulties – the ‘warts and all’ picture.

The partner will need to understand everything about the organisation’s business – its value proposition, its strategy and drivers, its culture, its management structure, its training and development practices and the ideal employee fit for every role. Only then can it take on the full responsibility for the recruitment processes and focus effectively on acquiring, evaluating and developing talent that will impact business performance positively.

Organisations who approach an RPO partnership in this way will find that it will deliver overall cost savings, improve efficiencies and attract a higher calibre of employee than previously recruited. However, they should understand that transformation does not happen overnight and that it takes a partnership ethos to deliver it.

What makes an ideal RPO provider?

A good RPO partner will be experienced in the sector in which you operate. They will then be able to get ‘under the skin’ of your operations quickly and understand the people challenges you face. The RPO team should integrate into your organisation and will probably work out of your offices to achieve this end; the importance of a supplier’s cultural sensitivity is a critical factor here. They will be able to provide you with access to, or advice on better technology solutions that will enhance your recruitment processes, and they will know where and how to attract the best talent on the market.

They will be responsible for all your recruitment needs, assisting with manpower planning and job design, liaising with hiring managers to determine what candidates are required and which are the best routes to attracting them, screening and assessing candidates, setting up and facilitating interviews and ensuring the best candidate is hired. They will also deliver a candidate experience that enhances your brand and encourages the best to ‘stay in play’ until an offer is made and raises the chances of success with regard to appointment.

"A long-term recruitment partner will be able to respond to business drivers – such as success of individuals – and improve retention rates"

In addition, the best providers offer a range of additional expertise including such interventions as assessment design and delivery, transition management, pre-employment screening and project management/consultancy.

Being accountable

An organisation should expect that effective adoption of an RPO strategy makes its recruitment partner more accountable for the performance of employees recruited. A long-term recruitment partner will be able to respond to business drivers – such as success of individuals – and improve retention rates. It will also continually evolve the model in operation to effect a positive change – if it does not, it will have a mechanism by which to question its capability.

Clear benchmarks and measurement processes need to be established at the outset so the provider’s performance and its success can be evaluated.

The sort of RPO provider that can add value to your organisation is one that can design Service Level Agreements and Customer Satisfaction Programmes that involve all stakeholders in the end-to-end resourcing process and which don’t simply turn into meaningless weekly or monthly reports that nobody uses.

Your RPO provider will be responsible for the recruitment outcomes and will be able to tell you how it has added value and saved you money.

Responding to change through innovation

RPO is about saving money and improving the entire resourcing process for the organisation and the experience for candidates. It will enhance an employer’s brand and, most importantly, it will ensure that the best talent on the market is recruited, retained and developed. When these candidates come on board, they will be totally committed to the long-term success of their new employer and fully capable of delivering it.

It may seem counter-intuitive at first, but the current trading climate is an ideal time to consider bringing in an RPO provider to help improve the efficiency and effectiveness of your recruitment, while also reducing the overall costs to the business.

Graham Snuggs is director of RPO at Reed Consulting

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