Recruitment process outsourcing: challenges and opportunities (Part 1)
Late last year Outsource hosted a breakfast roundtable in association with Futurestep, a Korn Ferry company, investigating the current state of and future potential for the recruitment process outsourcing (RPO) industry. Bringing together HR professionals from a wide range of sectors and organisational types, the debate covered a broad swathe of some of the key issues facing RPO – and those involved in or utilising the model – from the impact of technology through changing candidate behaviours to the challenges of working globally.
The event began with a brief round-up from co-host Jeanne MacDonald, Futurestep’s President, Global Talent Acquisition Solutions (our exclusive interview with whom can be read here) who outlined what she saw as being the key trends affecting the RPO space today. These included the need for RPO providers to be genuinely global; the rapidly evolving technology impacting upon RPO (and, crucially, the imperative to use that technology correctly to ensure the right candidate experience, without losing the human touch); the realisation that an RPO provider’s job does not stop at hiring, but reaches deep into the onboarding process to ensure best fit; and the ongoing maturisation of RPO – on both sides of the agreement – and the need to adjust models, expectations and the nature of work to different partnership journeys across different deal-generations.
When the attendees were invited to comment on these trends, and to share their own learnings, once of the first points to arise was the degree of complexity now at play within RPO – one guest pointed out that “it used to be that most people in RPO just wanted to talk about hiring people but it’s become a lot more than that”.
One of the areas where this complexity is most visible, and having the greatest impact, is the interplay between technology and candidate expectations. Jeanne MacDonald pointed out that while the entire recruitment process up to and including the interview can now often be carried out via a smartphone, that doesn’t mean that every candidate wishes to be engaged in this way: some require higher-touch treatment and solutions need to fit the target rather than demanding that the candidate adapt to fit them. RPOs need to be conscious of this, and work with the buyer to paint as full as picture as possible of who the candidate is and what their preferences will be, before a solution is deployed.
As with much else, one prominent danger of getting this wrong is the negative impact upon employer brand (and by extension the broader brand of the organisation: as one guest pointed out, a large retail chain may have 100,000 applications a year, each one of which is also a consumer in his/her own right). The discussion then moved to this topic, and in particular who owns the responsibility for employer brand: the agreement was unanimous that “everyone is a brand custodian” (though one attendee pointed out that, nevertheless, “the onus is on the [buyer] organisation to get the employment brand piece right”).
“If we don’t work in partnership together, it isn’t going to work” when it comes to employer brand, one guest said.
The nature of that partnership then came to the fore; “partnership” is a term that is often over-used (and misapplied) in the broader outsourcing arena but it was viewed by the attendees as paramount. How, though, to achieve genuine partnership? Various prerequisites were mooted – including “transparency – on both sides” – but overall a willingness to engage and to work together to overcome obstacles was viewed as being fundamental; only once this is established can a sense of true partnership be fostered, and only once this spirit is inculcated can the agreement achieve all its potential (though it was pointed out that while “partnership” is often easy to achieve during the good times, when difficulties arise it’s often easy to revert to type: as one delegate noted, “We bring people into the organisation, give them email addresses saying they’re part of the organisation – but then when things go wrong they definitely work for the RPO provider, as far as the organisation’s concerned!”
It was clear that one crucial element of success is the seniority of the lead sponsor on the buy-side: “the sponsor’s effectiveness depends upon the extent to which that sponsor has a seat at the table,” in the words of one attendee. An ineffective sponsor frequently means a lack of mandate for change which can prove terminal; identifying the effectiveness of the sponsor, however, frequently proved difficult for RPO providers (though one attendee believed that “if you have a meaningful dialogue with your client you can have the conversation about the effectiveness of sponsorship”).
Ineffective sponsorship is not, of course, the only possible ingredient in any recipe for disaster. Other potential causes of failure cited were “poor communication”; “a lack of trust” (especially prevalent in first-generation deals where the fundamentals of the model have yet to be proven to the buyer); “staleness, a lack of innovation”; “teams not working together”; a lack of the transparency earlier given as a key ingredient; and “the emergence of a blame culture” once a relationship starts to break down. It was recognised that, again, both sides need to collaborate successfully to combat these potentially catastrophic challenges, with the natural tendency of the buyer to start finger-pointing inevitably proving counterproductive in the long run.
The role of the SLA came under intense scrutiny; whilst (especially in first-generation agreements) certain KPIs are logical, increasingly the basics are seen as (in the words of Jeanne MacDonald) “table stakes: we have to get them right, but they’re just the start”. Buyers need to be comfortable with the idea of SLAs flexing over time, both to reflect the deepening of the relationship and to drive change in their own right: “SLAs drive behaviour,” it was pointed out, and as the needs of the business evolve, it is ludicrous to restrict the evolution of the agreement’s framework which could otherwise reflect those evolving needs.
The responsibility for driving that change, it appeared, lies with the provider. One attendee opined that “you can’t get complacent; it’s the RPO’s job to see into the future, and go to the client and say ‘this agreement won’t be fit for purpose soon’”; the other side of this coin was verbalised by another attendee who said, bluntly, “I don’t want to be asking for advice; I want to be told.”
The word “advice” then opened up a line of conversation regarding the extent to which RPOs can – indeed must – deliver advisory services if they are ever to be regarded as strategic partners (“fulfilling my hiring requirements in any given location, fine: but that’s tactical, not strategic” as one attendee put it). This in turn requires the creation of smart analytics functions on the part of the buyer, who can then feed in genuinely actionable insights to the organisation’s strategic planners (though one guest pointed out that as buyer organisations themselves mature they too need deep analytics in order for them to be able to manage their providers effectively).
Advisory capabilities were seen as a significant differentiator for provider companies; another is the ability to deliver on a global scale, and, as Jeanne MacDonald pointed out, while there are “a lot of companies outsourcing globally to a single partner”, there is also a degree of exaggeration on the part of some suppliers claiming to be able to deliver globally. As one attendee pointed out, “there aren’t that many providers who can genuinely deliver on a global level. There’s some sharp marketing around at the moment which you need to be aware of.” While suppliers might not be present in every single geography, the ability to partner with local agencies whilst retaining full responsibility for delivery (and, crucially, being able to demonstrate clear and coherent governance and contractual frameworks) would prove a clear competitive advantage.
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This article is a write-up of an Editor’s Roundtable conducted in association with Futurestep, who sponsored the event. For more information please contact the editor at firstname.lastname@example.org.