RPOs - A Cancer on Recruiting

Harsh? Perhaps. But let me explain. One, if I just titled it RPOs, no one would read it, and I am too narcissistic to allow that to happen. And 2 (or B for those who prefer diversity), I truly believe that the RPO business model is antithetical to professional recruiting. For those of you who may not be aware of what an RPO is, let me explain, or cut and paste from Wikipedia, whichever you prefer:

Recruitment Process Outsourcing is a form of business process outsourcing (BPO) where an employer outsources or transfers all or part of its recruitment activities to an external service provider.

So, theoretically an RPO is a good idea if a company wants to run lean on the HR side and remove HR from the place it really has no business being - Recruiting.

Companies downsized their Recruiting staff during the beginning of the Recession, forgetting (because most companies have no concept of what Recruiters actually do) that once business began to grow again, they'd need a pipeline of candidates to help them fulfill their growing business needs. So now many companies have been caught sans pants, needing to hire en masse and quickly

Enter the RPO. "We'll do it all for you, just sign an agreement with us for X thousands of dollars, and we will manage it all for you." Company X thinks this is a great idea and signs a contract. "Fools! Now we have you!", cackles the RPO malevolently whilst twisting the pointy ends of its waxed mustache.

The problem is, RPO's are basically a retained search firm that has no obligation to actually really DO anything. I'm sure there are SLAs that might be less useless, but I haven't heard of them. The RPO then hires tons of Recruiters, and people that call themselves Recruiters, and puts them in positions variously labled Staffing Consultants, or Account Managers, or Oompa Loompas. The title is irrelevant. What these people do is interact with Hiring Managers and 'oversee the process' by posting the jobs, updating the ATS, etc. They don't actually recruit. They don't have time, Usually they're buried under massive req loads immediately.

Then the position is sent to a "Recruiter" for sourcing and pre-screening. But here's the really dirty little secret. The Recruiters are outsourced to Latin America or Asia with a few US Recruiters to fill out the roster. They have little or no experience in the industry they're recruiting for, and are paid peanuts. The Recruiters source and pre-screen and then forward the candidates to the Oompa Loompa, who then without pre-screening them themselves, forwards them to the Hiring Manager.

I call this McRecruiting. One size fits all low skill manpower intensive sweat shop recruiting that severs the link between a Hiring Manager and the Recruiter and the candidate. There is no "Full Cycle Recruiting". The client receives very little value for the money they've poured into the RPO. A true Recruiting Professional needs to be in touch with both sides of the equation, and familiar with the industry they're recruiting for.

The process employed by an RPO serves to cheapen the title of Recruiter and bastardizes our profession. If you needed a doctor, would you explain your symptoms to a Medical Billing person who then relays your case to someone in Uzbekistan, who then gives their diagnosis to the Biller, who then tells you what you need to take to get better? If you said yes, congratulations, you're an idiot.

RPO's over-promise and under-deliver and the companies that hire them then have an even worse concept of Recruiters. They are a cancer, but one that can be cured with early detection.

Next Post >

Comment by Michael Brandt on January 24, 2012 at 6:04pm: Phil,

Not sure what you base your points on but, I think you are wrong in your assessment for the most part and your blog isn't really based on any data. RPOs are here to stay and there are a lot of great RPO operations out there doing excellent work for their clients. They serve a real need in recruiting with companies that have an ever changing recruiting need. RPOs can typically ramp up faster and more efficiently that the customer themselves can and they can maintain a strong level of talent. There are certainly companies out there doing everything and anything and calling it RPO but a true RPO firm that augments their clients recruitment efforts can and typically is highly effective tool for HR departments. Additionally, contrary to your post RPOs are heavily scrutinized on their performance. We have a platform just for RPO firms and customer specific SLA reporting is by far the most requested thing from customers ongoing because of that scrutiny.

I don't see the industry going anywhere but up. In fact, it is arguably the fastest growing area of 3rd party recruitment.

Mike Brandt

COO BrightMove Recruiting Software

Comment by Raphael Fang on January 24, 2012 at 6:06pm: My firm works with a RPO all the time and we have nothing but good to say about the them. To us, they act like a company's HR department. They pay us on time as well. To a certain degree, they are easier to deal with than an actual HR department.

Comment by Phil McCraken on January 24, 2012 at 6:33pm: Michael. No my blog is not based upon any "hard data", as I have a very hard time with math, and a social life. Otherwise, I'd sell software to RPOs and shamelessly suck up to them online. Or something. And Raphael, in my experience working for and working with RPO's, we never used a 3rd party firm. It seems to kind of defeat the purpose of an RPO, but whatever floats the client's boat. Paying twice for one service just seems foolish for the client and lazy for the RPO.

Comment by Michael Brandt on January 24, 2012 at 6:45pm: Nice Phil, So your only response is to call me a suck up. That was special.

You write an article on a recruiting network site completely calling out an entire sector of recruiting with nothing to back it up with and you are suprised someone finds it inaccurate and baseless. RPO is like any other business, it is what the ownership makes it. There are some great organizations out there, many of which are not my customers. Sounds like maybe you lost some business to an RPO and are bitter.

Best of luck to you and business. You have an excellent level of professionalism.

Comment by Phil McCraken on January 24, 2012 at 7:11pm: Michael, I didn't call you a suck up. Directly. I merely alluded to it. My avatar is a pissed off monkey, so perhaps you should be aware that my blogs are not sales brochures and my approach will be somewhat whimsical and somewhat cantankerous.

I never lost business to an RPO, and although I may be bitter about my weight, my ex wife and my taxes, bitterness does not enter into this post.

My viewpoint is totally one of a Recruiter viewing a process that cheapens and reduces the profession. I'm not sure, but it looks like you're not currently a Recruiter? Were you ever one? I'm being sincerely curious.

As far as being baseless, no. However, I will grant that my sample of RPO's may not be large enough to blast the entire industry, but since I have a right to my opinion and this is my blog, I'll stand by what I wrote.

RPOs are good for people who sell to RPOs. That's axiomatic. I'm talking about what they do for and to Recruiting.

Comment by Jacob S. Madsen on January 25, 2012 at 11:19am: Perhaps some perspective from the other side of the Atlantic might be able to dampen the spirits. I have from the inside seen where RPO add value and where they do not, why my insight is fact based. I worked in a company that in 2007 had Microsoft's recruitment in 40 countries worldwide, - today they have 5 left!!! and I was active i one of those that were terminated.

Bottom line is if RPO's can offer true value versus a company going it alone then they have a place and justification, and only then. Looking around I do not think the RPO's can be said to have gone from strength to strength and there are many examples of big arm movements and excitement only for the whole thing to fall apart after 2-3-4 years. There is a reason for that, and no it is not as with people that 'we have grown apart' but more to do with value for money and justification for the premium paid versus having your own team. Corporate recruitment in 2012 and going forward is about so much more than just filling seats, it's about EVP, branding, talent communities, and building a coherent and holistic approach to the attraction and retention of great talent. With RPO's often paying 15-20% less than true market value for their people, with no real career path/prospects (as all depending on client portfolio and whether that relationship continues) with a market and companies knowing that having 100% control of one of the (if not the most) valuable aspects of their company (apart from our planet, the kingdom of plants, minerals and animals e v e r y t h i n g man made from paperclips to 'man on the moon') why right and best talent truly distinction between success or failure.

So do I agree with with Phil, - hmmm I will leave that one open. I have my doubts as to the true value of RPO's thereby not saying that they do not provide value,in some way or form and to some, but I have seen enough of it not working as ideally intended why I have reservations about how fantastic they are and how many problems they solve, - that couldn't or shouldn't be dealt with by the company itself with a better outcome.

Only history will show where and how RPO's will play a role in the coming years, tendency so far is though that they may not be the resolution to best and most effective ongoing talent identification/attraction management.

Comment by Kate Parkyn on January 25, 2012 at 11:20am: If there was a "Dislike" button I would be pressing it!

Agree with Michael, at least provide some hard data where "X company have had a negative experience or Firm X discovered they didn't save any money" (for example) This in my eyes is a cheap attack at something I think you know little about. I'm sure if you looked a little harder the postives outweight the negatives across the globe (speaking from the UK)

You never know when you, (assuming you are agency recruitment) may need to rely on employment with an RPO, as that is where most recruitment is going - outsourcing or making your inhouse better! Sure your tune will change then!!!

Good luck

Comment by Sandra McCartt on January 25, 2012 at 1:49pm: This blog made me laugh. If all blogs had to have hard data there would be nothing on the internet but static or the sound of the wind through a deserted canyon. All blogs and comments are just opinion based on our own personal experience or thoughts.

Comment by Bill Ward on January 25, 2012 at 2:21pm: "The problem is, RPO's are basically a retained search firm that has no obligation to actually really DO anything."

Really? Retained search firms don't have obligations to do anything? WTF are you talking about? If a client pays you upfront, you have a huge responsibility to deliver. If you're going to use analogies, make sure they strengthen your position rather than making you look like a fool.

Comment by Phil McCraken on January 25, 2012 at 3:57pm: Bill. Reading for comprehension if your friend. Retained search firms DO have an obligation to DO something. They are paid up front, and are under contract to fill a position and if necessary keep re-filling that position if the candidate doesn't work out or quits within a certain time period. RPO's do not have that obligation, but they must be paid up front. Sarcasm isn't for everyone, and sometimes analogies must be read and then re-read if one does not grasp them. Good luck on your future endeavors to understand things.

Comment