Evolution of the species
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Like much of the industry, recruitment process outsourcingcompanies have had to reinvent themselves. Scott Beagrie look at the changes that have been taking place
None of us can predict precisely what the actions of the coalition government will mean for business in the coming months. What is evident though is that many areas of the recruitment industry have already had to reinvent themselves over the past two years and the need to be flexible to client and market requirements will continue for some time yet.
For the recruitment process outsourcing (RPO) sector there has been an overall shift from a purely end-to-end resourcing service model to a more varied model of providing point solutions where the client demands specific components of the recruitment process, such as candidate assessment and screening, onboarding or exit interviewing.
RPO providers report mixed experiences of the recession. But emerging from the downturn, almost all highlight that clients are coming to them with differing needs and diverse challenges. This is hardly surprising when the Global RPO Report 2010 from Kelly Outsourcing and Consulting Group (KellyOCG) found that six in 10 HR units have five or fewer staff. And more than a third spend less than 10% of their time on recruitment. Only a fifth devote 75% of their time to recruitment.
“Although the hiring market has remained slow or non-existent for some companies, technology and candidate lifestyles have not, meaning recruiters need to re-educate themselves about recruiting methods and candidate behaviours,” says Zachary Misko, global director at KellyOCG.
“Unlike many companies who have not been in the practice of recruiting over the last two years, our recruitment and sourcing teams have been engaged and trained in how to utilise the internet and tools available to attract qualified candidates.
“Developing an effective and diverse strategy to advertise open positions is the key.”
Sarah Hopkins, director of ResourceBank, says that when hiring levels were lower, services such as online authorisation, global career websites, outplacement and exit interviews came through as “strong performers”.
But since January, new clients are united by a similar requirement. “They all have a need around urgent recruitment and delivery of good candidates,” she says. Leaner organisational structures mean companies need to recruit to support the business but it is hard for them to respond internally as cuts have left HR “stripped to the bone and run ragged”.
“So,” she adds, “there’s a recognition that they need to recruit but it is done better and more cost-effectively by an external provider.”
One of ResourceBank’s clients is World Duty Free and the nature of its business means it must be prepared for any eventuality. “Lots of things impact travel retailing more than just the recession,” says Geoff Hall, head of HR. “We have volcanic ash, we have air strikes and we’re constantly reviewing our resource requirements.”
He adds that the company is trying to improve its mix of part-timers versus full-timers to give it increased flexibility. “It’s more closely aligning our resourcing requirements with a fluctuating sales pattern which is very hard to do in travel retailing.”
Since World Duty Free shops are located “airside” beyond the terminal security curtain, the additional background checking means recruitment can be complex and lengthy and the retailer wished to reduce the time to hire and costs. Agreeing a service level agreement with an outsourced provider that covers these complexities has proven to be a far easier and more cost-effective route.
“It used to take us three to four months to recruit 20-30 people to the same airport but now it typically takes us eight to 10 weeks,” says Hall. “Also our ’hit’, or conversation rate from interview to offer, has improved in terms of the screening ResourceBank has put in place. We see higher calibre candidates at interview and our conversion rate is two for one.”
Reduced scope for hiring has also placed greater emphasis on RPOs delivering higher quality candidates. Robert Leggett, managing director of Omni Resource Management Solutions, says that although he doesn’t feel OmniRMS’s service offering has dramatically changed, clients’ demands have.
He reckons the emphasis is far more on quality of candidates and consequently on the assessment and selection process compared with previously where it had been purely on the sourcing. “The real focus is on how can we ensure they are the best candidates and that they stay with the organisation for longer?”
To this end, OmniRMS employs a full-time occupational psychologist, “because we believe very much that assessment and selection, and profiling of candidates is now really important as organisations start growing again,” adds Leggett.
According to Tim Geisert, vice president of employment branding and RPO at HR business solution provider Kenexa, its new clients need high quality candidates because they are getting hired not to do just one job but “maybe two or three jobs,” he says. “That’s why, if you look at the Wall Street Journal, it will show you that the productivity of these multinationals are up but their hiring is not keeping pace. It comes down to companies doing more with less and so consequently the quality of the individuals they are looking to hire is even more critical.”
That’s why, if you look at the Wall Street Journal, it will show you that the productivity of these multinationals are up but their hiring is not keeping pace.
Geisert adds that he is aware of a great deal more “clinical business thinking” by company leadership, which is filtering down to the recruiters and heads of HR.
That translates into a demand from RPO companies to not just solve immediate problems but to help drive their businesses. “That’s what leadership is asking and that’s different,” he says. “Only a year and a half ago it was just ’get me people’, like a fire drill. Now it’s much more methodical.”
Tim Warmath, consultant, people and change at Colt, whose RPO provider is Resource Solutions, part of the Robert Walters group, acknowledges he is being far more exact in what he wants. Although market conditions are improving, the integrated networking and IT managed service provider is putting each role it is hiring for under greater scrutiny. “We’re asking for our RPO to be a partner with us on forecasting so that we understand exactly as things uptick that we are not just hiring for the sake of hiring,” he says. “But we hire exactly for where the business needs to go.”
Warmath is also asking the RPO to work strenuously on direct routes to market: “We want them to be better skilled recruiters without them immediately turning to an agency or third party vendor but [instead] to work our own networks whether those are internal or referral or other external sites prior to going to working with a third party vendor,” he says.
With pressure still on recruitment budgets, working internal networks harder is another identified trend. Zain Wadee, director at hyphen, the RPO division of Spring Group, says one of its aims to drive efficiency and value for the client is by “leveraging” career mobility. For example, Wadee says, one of its clients, Nokia, last year filled 30% of its vacancies with people already employed by the company. “It’s giving them a proper framework to move them across the organisation,” he says, adding that some employees at Nokia were either at risk within their current role or were potentially looking for a change.
“Because we have a bird’s eye view we can facilitate the moves and stop talent that already has been invested in from leaving the organisation.”
Wadee adds: “It should be at the core of what RPO providers do. It shouldn’t just be about bringing people in from the outside market it should be around ’how do we help foster and facilitate the overall progression of talent and alignment with the talent strategies?’ Our job is to be a key linchpin in that equation.”
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