Third-party professional services providers are hardly an anomaly these days. To streamline efforts and maximize efficiencies, organizations are finding value with these business vendors in a host of roles and critical tasks, such as marketing, IT, payroll and — arguably most importantly — staffing. The latter is often referred to as recruitment process outsourcing (RPO).
There are many facets of RPO. At the most basic level, RPO is the process in which a company outsources or transfers part — or all — of its recruitment activities to a third-party vendor. Before the economic downturn, RPO providers were a distinctive industry segment, offering organizations recruiting services generally not covered by staffing and executive search firms. Today, however, the RPO business has become more muddled — because, like most businesses, the recruiting and staffing industry evolved.
KellyOCG’s Global RPO Report notes that recruitment outsourcing is “the most frequently outsourced HR function, ahead of payroll, training, benefits, compensation, performance management and HRIS.” It is a market projected to grow 12 to 17 percent in 2013, the report says.
Consequently, RPO has become the latest HR buzzword. Still, no RPO provider is the same, and choosing the right partner for your business is a huge determinant of success. Turnover is too expensive for the process to not be fully understood.
So where should an organization start?
Companies vary greatly in terms of their recruiting needs, so choosing an RPO vendor might not be obvious. The right partner should work specifically within your business framework, processes, technology and staff structure. To that end, an RFI/RFP — or request for information or proposal — is a smart move in an effort to obtain various differentiating points and get a rundown on exactly what to expect.
Here are three steps to take you through the process:
The analysis: Launch a review of how the current hiring processes are working. Are candidates being identified effectively? Do you lose some candidates during the recruiting process? Do you need to re-evaluate how the work is being done and assess requisition workload by HR or recruiter? Is the organization structured properly to be successful? Or does the organization need to re-evaluate its current vendors?
Moreover, how does the organization keep candidates engaged? Are there demographic/location issues? And is the organization capturing and retaining the right employees?
If you answered no to any of these, it is likely time to consider an RPO.
Implement an RFP process: When outsourcing such an important function as recruiting, it is considered best practice to go through a request for proposal (RFP) process. Discussing RPO in his recent ERE.net piece, Brenan German said the following about the importance of requesting proposals from RPO providers: “The proposal and subsequent information gathered from the RFP process allows an organization to better outline their requirements in evaluating and comparing RPO providers. The results will offer a clearer picture in selecting the right RPO provider while setting performance expectations.”
Launch a pilot: After choosing an RPO partner, another best practice is to implement a pilot program. It’s a good idea to start small with RPO. Launching a trial prevents the chance of over-committing to a provider that may not be a good organizational fit. Start by outsourcing one function that isn’t being successfully managed in-house. A good RPO provider won’t try to force the organization into a full-scale program, but will work to provide services that are most needed.
When it comes down to choosing an RPO partner, the key emphasis is on “partnership.” The organization chosen should complement the business model and key strategies.
Have you engaged an RPO? How did you determine the right partner for your organization? I would love your thoughts and ideas. Comment below to give feedback.