Nothing seems to sharpen the mind more than a recession and that's particularly true in the recruitment industry. And, perhaps predictably, as things got tighter over the last 18 months or so, the spotlight kept falling on our common bedfellows - Recruitment Process Outsourcing businesses. For the purposes of simplicity, I'm using the term RPO in this post as a collective term to cover all outsourced recruitment arrangements, including managed service providers. I know I'll probably get in trouble with the purists for that but bear with me!
Suffice to say that like many recruitment consultancies we have, in the past, not been so positive about RPO arrangements. To many recruiters they are an unwanted layer of complexity that at best gets in the way of a good relationship with the client or at worst seems to replace it all together. And if that wasn't bad enough, there's the issue of margin erosion too as yet another player takes a cut of the fee pie.
There are some upsides of course. Being an 'official' part of a structured preferred supplier arrangement via an RPO can often mean volume guarantees and consistent workloads. But in my experience, the general view within most recruitment companies when it comes to dealing with RPO's is negative.
We were no different but as the recession began to loom in 2008, we started to ask ourselves a few questions about our business and our future. And for me, the most powerful one that came up time and time again was:
Who is the customer?
In nearly every instance we would refer to the hiring organisation as being the client, or 'customer'. But when we looked at it another way, the RPO was, in fact, the client. This was particularly true for mid level recruitment in large blue chip businesses where 'line' contact had all but been removed. Even where there was some direct contact with the hiring organisation, the RPO was so prominent that as a minimum we had to consider them as a 'joint' client.
At the time I did an informal poll within our business asking what % of business we thought went through non direct routes and the results were worrying. Despite our best guesses, when we looked at the hard numbers, the amount of business through this 'channel', as we would now describe it, was double our gut feeling.
This fact alone has made us change our thinking and approach completely in terms of how we now view RPO's. After all, with such a significant slice of our business going through this channel, it suddenly seems madness to consider them only in negative conversations around the water cooler!
So, as of last week we have created a new role in the business - Head of Channel Partnerships - and taken one of our long-standing senior consultants completely out of his day to day recruitment role to take up this new position. The focus of the job will be to work with our business intelligence team to understand the RPO space better, the key players and our own relationships with one clear objective: to develop and treat them as clients.
Will it pay off? Who knows? All I can say is watch this space. But my gut tells me it's worth the investment. After all, in the worst recession since the 2nd world war, we need to turn as many foes into friends as we can.
Do you have a similar role in your organisation? I'd be very interested in hearing from other recruiters that have a dedicated resource to develop and manage relationships with their RPO partners.
We don't have that role, but definitely do business with RPOs in cases where it makes sense for them and I guess are in competition with them to some degree in others, although I don't look at it that way. I'm convinced that RPOs are here to stay, but not in place of third party agencies. I think you hit the nail on the head in that they are another channel. Working with them is just like working with a corporate recruiting department for the most part. The most aggressive and most innovative part of recruiting will continue to be third party recruiters because that is all they are paid to do, so they will naturally do the most in order to find the right candidates. So that role is clearly defined and if we all understand our role, then we can look at RPOs for what they are, a different business with a real place and market for them. The downturn has caused smart recruiters and agencies to look at all possibilities and organize their efforts directed at additional channels. RPOs, Split Partners and others are valid channels of business that can be developed.
I think you have hit the nail on the head with this one Gareth, thanks for your clarity and thoughts. By working with the RPO company instead of against them, it will make the entire process much more productive for all involved. Agencies will always be needed for their support in high-demand recruitment and their ability to deliver within specialist fields.