How Big is “Big Enough”?

RPO considerations

Are we too small to utilize Recruitment Process Outsourcing (RPO)?  How big is “big enough”?  Is it practical to consider RPO for a project?  What makes sense for our organization? 
 
These are questions I sometimes hear articulated.  More often than not, they go unasked.  Human Resources and Talent Acquisition leaders don’t want to be seen as redundant – and if they are perceived as needing assistance, doesn’t it suggest they are not doing their job? 
 
Of course not!  In today’s multi-tasking, 24/7 productivity expectation environment, HR and TA professionals in small-to-mid-sized companies aren’t focused on just one strategic goal, they are pulled into everything.  You should consider RPO just as you would any other recruitment optimization strategy. 
 
How do companies determine if RPO is right for them?  Some areas to define for yourself, your work team and your potential partner might include: 
 
Why should we move in this direction? 
 
What is driving the discussion?  Here are some levers to consider: 

  • Cost  
  • Performance measurements and visibility  
  • Accountability 
  • The ability to focus on the core business 
  • HR Generalists inability to spend the required time on recruitment 
  • Recruitment results (quality of hire/time to fill/retention/jobs unfilled) 
  • Ability to move from a fixed cost delivery model to variable expense 
  • Ability to improve the candidate experience 
  • Ability to improve the hiring manager experience 
  • Project and/or peak hiring periods 
  • Speed 
  • Understaffed (resources and/or the right resources) 
  • Under-equipped (lack of technology, including mobile capability) 

Understanding purpose helps to define success.  It sets the stage for your conversations with your potential partner and establishes the priorities and the measurements to ensure achievement of your goals.   
 
Define Success and Measure Your Progress 
 
Cost-per-hire and time-to-fill are often the initial (and easy) metrics of choice but I urge you to take a deeper dive and consider candidate experience and quality of hire.  Some measurements will involve “after-hire” data, (think tenure, performance management and succession).  It will require patience which will pay off with an enhanced business case demonstrating the value of your decision. 
 
Ensure you engage the appropriate stakeholders in the conversation and understand their drivers may be different based upon their perspective.  For a hiring manager, it may simply be the fact they have a deadline to meet and are short-handed, and therefore, speed is their lever. 
 
It is not unusual in second-generation RPO engagements to receive feedback about differences in perspective.  One group within the organization will feel they reached success while another group will feel like goals were not achieved.  Defining and articulating your critical priorities as you engage potential partners will be crucial to their understanding and ability to create the appropriate solution specific to your organization. 
 
What is the risk of not exploring RPO? 
 
Can you stay reasonably current with market trends and technology without a recruitment expert as a partner?  It’s hard to have it all when you’re working for a small-to-mid-sized company.  Even in large firms, it’s difficult sometimes to gain budget approval for all the projects on your roadmap.  Is there a missed opportunity for economies of scale?  Are there shared services options, perhaps research and sourcing or candidate care, involving less than full-time resources available with a partner?  Is scaling up and down something you do well or are you carrying year-round, full-time costs to ensure you’re ready for your high volume seasons? 
 
And just consider the explosion of technology and social media.  Understanding where to invest and where to focus and staying current can be a full-time job!  Ease of apply, especially when utilizing a mobile device, is top-of-mind for many recruitment professionals.  We see many firms playing catch-up because they underestimated the impact of technological advances. 
 
Affordability is always a part of the discussion.  Include your Finance Team as you build your internal business case.  You may have obvious costs like agency fees and hidden costs, like overtime from unfilled positions.  We often see smaller companies with annual agency fees as the largest line item in their HR budget. Another area to explore is lost opportunities which could offset funding for your program, for example, are tax credits optimized?   
   
A RPO partner will be able to assist you in this step of your process.  This is their area of expertise.  Exploring options, considering the pros and cons, will crystallize your decision to move forward or not.  Holding your cards to close to the chest before you enter the competitive phase will limit your ability to receive feedback, guidance and creative solutions. 
 
Who? 
 
At a basic level, most RPO firms have the competencies to deliver.  For a small-to-mid-sized firm, I strongly recommend a small-to-mid-sized RPO partner.  You want to be the right-size fish in a right-size pond.  Don’t underestimate the value of the trusted advisor relationship.  I urge you to ask if the same team which makes the sale is going to be involved in the ongoing delivery.  What is the plan for consistency?  Who “owns” the relationship and ensures service delivery is on track?   
 
Before you formalize the process and enter a longer-term engagement, start “dating”.  Ensure your comfort level.  Are promises fulfilled?  Do you observe your potential partner listening for understanding or listening to reply?   Are you on the same philosophical plain?  Is the size of your commitment appealing to them?  What creative options are they suggesting? Are you important to your new provider or is your size going to prevent you from receiving the appropriate attention that you need?  
 
Oftentimes, a working session where you can engage members of the RPO team is more productive than a formal presentation.  You and your team should be part of the proposed outcome.   A working session is an opportunity to exchange ideas, to explore options and to come to a mutually satisfactory solution.  Selecting a RPO firm based upon their presentation skills will yield a different result than selecting a RPO team based upon their experience, skill sets, communication ability and the ability to work easily and effectively with you and your team. 
 
 What is your responsibility once a deal is struck? 
 
Implementation and execution are always the most challenging part of a relationship.  Success and/or failure rests on both parties – you and your selected partner.  You need to consider what you will contribute to the relationship and its’ outcome. This is not about risk shifting. In order to be successful, there is shared ownership and shared responsibilities. There is a commitment by both parties. 
 
Here are some keys to success: 

  • Commit to exclusivity within the defined scope of the relationship.  If you don’t fully commit, it’s impossible for your partner to apply resources.  The time for exploration and consideration is over.  You have tested the waters, jump in! 
  • Drive and manage to change.  Your colleagues may not all be on board.  You have earned trust and respect within your organization, it’s time to use that currency.  You and your team have made a decision, help your colleagues understand what the benefit is to the organization and communicate, communicate and communicate again! 
  • Offer transparency to your partner.  Share the challenges you are facing, problem solve as an exercise in resolution, not as a “whodunit”, and I guarantee that your partner will surprise you with creative solutions, with open dialog, with a window into your organization and with business outcomes that exceed your expectations. 
  • Be patient.  Set reasonable and attainable goals together and move the bar up as a function of the length of the relationship.  Understand you will have challenges, every relationship has them.  The integrity with which these challenges are met define ultimate success. 

This exercise may seem overwhelming at first but I assure you, it is well worth the effort. Just the journey will uncover some opportunities for your organization which would not otherwise been identified.  Most firms are “big enough” for RPO, after further exploration, you will understand if it’s “right” for you.