Putting the client at the centre of the partnership

Recruitment process outsourcing is still in its infancy, especially outside the US. Vanessa Townsend discovers that the industry is evolving at an extremely fast pace - for both providers and clients alike

In the early years of RPO in the UK, at the end of the 1990s, the compelling reasons for a firm opting to outsource its recruitment were cost and time efficiencies. Chris Herrmannsen, chief executive of talent management and recruitment firm Ochre House, told Recruiter: “Around 10 years ago, RPO was a more simplistic basic proposition. Customer expectations of RPO were low; clients weren’t very good at measuring what was going on in their recruitment processes.”

And the RPO model has evolved from the outset 14 years ago of Resource Solutions, a division of Robert Walters. “Back then it was about seconding a consultant into the business to handle the recruitment on the client’s behalf in the form of vendor management,” says Miles Stribbling, MD, Resource Solutions.

Chris Herrmannsen: Around 10 years ago, customer expectations of RPO were low; clients weren’t very good at measuring what was going on in their recruitment processes

Chris Herrmannsen: Around 10 years ago, customer expectations of RPO were low; clients weren’t very good at measuring what was going on in their recruitment processes

So has the RPO concept changed over the years, particularly during the past 18 months? The answer is a resounding yes.

Robert Leggett, managing director and founder of OmniRMS, says: “The model has moved from agencies to preferred suppliers to master vendors to managed service providers and finally to RPO. RPO has changed because of the marketplace constantly evolving due to technology and business practices.”

Richard Pearson, MD of ResourceBank, says that RPO is evolving rapidly, mainly because clients and candidates have new needs. “Technology is changing the way RPO is carried out. Clients and candidates both want speed, as well as better customer service, which have to be done throughout the recruitment process. The bar has been raised, and quite rightly.”

Catharine Pelling: Two or three years ago, the process often stopped after the offer stage. Today the client wants more involvement in the onboarding stage and with retention of staff

Catharine Pelling: Two or three years ago, the process often stopped after the offer stage. Today the client wants more involvement in the onboarding stage and with retention of staff



Rosaleen Blair, chief executive of Alexander Mann Solutions (AMS), the company at the very beginnings of RPO in Europe, told Recruiter: “The industry is still very immature but is continuing to professionalise. Technology, along with a changing demographic and globalisation, is having a huge impact on the sector.”

Catharine Pelling, sales director at CarlisleMS, says that the market is definitely changing the way firms want their hiring requirements outsourced. “Clients are expecting more; there’s a greater need for end-to-end solutions. Two or three years ago, the process often stopped after the offer stage. Today the client wants more involvement in the onboarding stage and with retention of staff.” Jerry Collier, international RPO development director of Kenexa, agrees: “Too many RPOs are focusing on efficiency. We need to add value and make the clients more effective.”

Robert Leggett: Twelve years ago, there wasno such thing as RPO as a terminology. In a way the UK has always outsourced recruiting — outsourcing it to recruitment agencies

Robert Leggett: Twelve years ago, there wasno such thing as RPO as a terminology. In a way the UK has always outsourced recruiting — outsourcing it to recruitment agencies

In common with all the RPO firms Recruiter spoke to, Herrmannsen emphasises the long-term partnership aspect of the latest RPO models. “Customers want a more holistic offering,” he explains. “They want their RPO partner to move from efficiencies to effectiveness; from quantity hires to quality hires. They are demanding better people, a better experience for candidates and eventually better employees.”

Kenexa is finding a huge demand from clients now who aren’t hiring as vigorously as they were and have time to think ahead. Firms are recognising that they need to be equipped with better people for tomorrow. “They’re not in the middle of a whirlwind of recruitment,” says Collier. “They’re looking around the dock and might think of trying out a different boat to sail in.”

Pearson also believes firms have the luxury of considering their options. “Many HR departments have been decimated. Once the upturn comes they’ll realise that they no longer have the capacity and it’s a good time to be partnering with an outsourcer. Many companies are now exploring RPO; we’re certainly seeing high levels of interest.”

As for the future, the consensus is that more firms are going to be entering the RPO space. Pelling believes that customers want more and more innovation from providers and will be looking for differentiation. “Carlisle has done a lot of work recently around adopting the use of Six Sigma [a business management strategy which helps improve customer satisfaction] to measure quality in a quantifiable way. Carlisle believes that this approach truly enables clients for the first time to measure in a meaningful way the quality of their recruitment and also to compare it (using the same criteria) to the quality of recruitment in other organisations.”

Jerry Collier: Firms are not in the middle of a whirlwind of recruitment. They’re looking around the dock and might think of trying out a different boat to sail in

Jerry Collier: Firms are not in the middle of a whirlwind of recruitment. They’re looking around the dock and might think of trying out a different boat to sail in

OmniRMS has a pre-RPO consultancy service to help the client build their capability - and work out exactly what it is they need. The company also employs a full-time occupational psychologist, “as it’s important to get it right at the very beginning; talent management then becomes easy once you’ve got the best candidates in the first place”, Leggett explains. However, he emphasises that RPO is not a magic pill.

“We’ve turned clients down in the past, as we didn’t think they were ready for RPO. It’s not going to turn around a badly functioning company.”

Rosaleen Blair: The industry is still very immature but is continuing to professionalise. Technology is having a huge impact on the sector

Rosaleen Blair: The industry is still very immature but is continuing to professionalise. Technology is having a huge impact on the sector

Ochre House is heavily involved in understanding what a high-powered staff member should look like in their client’s organisation, and so they carry out competencies, run talent programmes on behalf of a client and partner the client in long-term strategic resourcing needs.

Resource Solutions also gets involved with tracking candidates throughout the entire employee life cycle, even participating in exit interviews to feed back to both client and recruiters. Stribbling says: “As we identify certain trends it makes us more efficient with finding the right candidates for the future.” He believes the future of RPO lies in more direct recruiting, as well as globalisation. “There are competitive times ahead. RPO is very much relationship-driven. We need to identify new opportunities. For example, no one wants to own pre-employment screening - it could be an ideal opportunity for the future.”

Collier also sees a new wave of entrants into the RPO marketplace. “There will be more entrants but there will be some spectacular failures as it’s a hard line of business to do properly.” His advice? “Get big, get niche or get out.”

 

then&now

Recruitment process outsourcing (RPO) can mean very different things to both providers and clients. Often the challenge is simply to define exactly what the provider and the buyer themselves mean by the term.

A short history lesson shows us that in the US back in the 1970s, in the fastgrowing hi-tech firms in Silicon Valley in California, technology companies needed huge numbers of highly skilled computer experts and struggled to find them by themselves. They turned to recruitment agencies, who began to take on more and more of the hiring processes, and after years of refinement the concept of RPO was established.

The RPO Alliance, a group of the Human Resources Outsourcing Association (HROA), defines recruitment process outsourcing as “a form of business process outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external service provider”. Simple. Or is it? Monica Yadav, head of RPO solutions & business development for IBM in Europe, explains that the RPO market is more mature in the US compared with Europe: “RPO contributes up to 40% efficiencies in recruitment processes — through optimised scalable and flexible solutions.” IBM has leveraged its HRO expertise “developing standardised best practice RPO processes integrated with leading recruiting technologies”.

With the RPO industry still in its infancy outside the US, Kenexa’s Jerry Collier told Recruiter: “The massive problem with an emerging industry in that the terminology is often unfamiliar and means different things to different people. RPO as an acronym may stand for ‘recruitment process
outsourcing’ but it covers so many things.” AMS’s Blair believes you should forget the label: “We’re trying to get away from the term ‘RPO’. It’s more a question of listening to the needs of each client and providing them with a solution.” Others agree that the term itself is not truly defined. Resource Solutions’ Miles Stribbling believes that “RPO in its purest form is the outsourcing of recruitment processes to experts [RPO firms], allowing clients to get on with other roles”. Robert Leggett, founder of OmniRMS, says: “There’s not really a true definition of RPO. As far as Omni is concerned it can mean outsourcing any element of the hiring process to an outside client. In a way the UK has always outsourced recruiting — outsourcing it to recruitment agencies.”

Next Issue: Recruitment visionaries look ahead to 2010

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