The Four Pillars of RPO Excellence for RPO's and buyers of RPO services

 

We demand RPO Excellence!

When I talk to organisations looking to outsource their recruitment, the most frequent area of conversation typically revolves around this:

Howard, RPO’s tell a good story, and we are pretty sure they can handle our core transactional recruitment requirement. But how can we tell a great RPO from just a good RPO? How do we make sure we choose the RPO that is really going to deliver Recruitment Excellence, today and tomorrow?

And I can understand their concern. The RPO market is full of very capable and competent providers, mainly focused on fantastic operational effectiveness i.e. fastest time to hire, optimum shortlist size, cheapest (direct) sourcing.

Some RPO’s have constructed interesting perspectives and capability in emerging areas of recruitment practice such as employer brand, candidate management, social media sourcing and assessment practices. Often these reflect current trends in the market. Much is technology led, with RPO’s dashing to find a piece of new recruitment tech that will give them an advantage over their competitors.

In themselves, these individual bits of capability are all good. But they can be reactive, in response to a client’s constant demand for innovation, and piecemeal, with no overarching improvement framework.

They don’t deliver a coherent vision of the RPO’s strategy for delivering Recruitment Excellence.

Is our Recruitment Excellence the same as your Recruitment Excellence?

The challenge in defining and delivering Recruitment Excellence is that an RPO’s objectives are not naturally aligned with their clients.

There is normally some alignment:

  • RPO’s are primarily in business to make money for their owners by providing great transactional recruitment services in the most cost effective way possible.
  • Buyers of RPO services want an RPO provider who can provide great transactional recruitment services at a competitive price.

OK so far.

But I have never met an intelligent RPO client that didn’t want more than that. They are not just after a competitive price – they want their RPO to provide them with real competitive advantage when it comes to staffing their companies. They want the RPO to recruit in a way that means they can change and grow easier and quicker than their competitors. They want to be able to respond to market demand and push new ideas without having to worry about whether they can get the staff they need. In other words they want the RPO to be able to give them confidence that they can get the best people, exactly when they want them, with minimum hassle and cost.

So Recruitment Excellence goes beyond the traditional contractual KPI’s and SLA’s, and pushes the RPO into the realms of delivering real strategic benefit to their client.

The Four Pillars of RPO Excellence – A Client Driven Sustainable Framework For World Class RPO

The four Pillars that any RPO aspiring to a model of Recruitment Excellence needs to master have been defined from the perspective of a typical RPO client. In other words – what does an RPO client expect from a World Class RPO?

The Pillars do not focus on specific recruitment processes. Excellence in sourcing on its own for instance doesn’t imply excellence in RPO.

Each Pillar reflects a core strategic client need rephrased into an obligation of the RPO, and are summarised below:

They are relevant today, and they will hold tomorrow as well. They do not change in response to trends or economic conditions. The way that an RPO needs to deliver the Pillars however will change. New technologies, changes in workforce behaviours, and different client imperatives will all influence how the Pillars are built and maintained. But the Pillars are the Pillars.

So let’s look at each of the Four Pillars in turn.

Pillar 1 – Hiring Quality

An unwavering data driven focus on improving both the quality of hires and the quality of the hiring process.

It is natural that the first Pillar is concerned with quality. Clients want to be sure they are seeing and then recruiting the best candidates available. However measuring and reporting on candidate quality pre and post hire is a real challenge that only the top RPO’s attempt to do – let only deliver successfully.

Recruitment Excellence demands a relentless evidence based approach to improving the quality of the candidates going through a recruitment process and then their performance post hire. It means that an RPO should be able to report on the strength of candidate pools they are presenting to hiring managers, and link the characteristics of successful candidates with their performance post hire.

This then allows them to understand the profiles of candidates that will be the most successful for their clients and feed this back into new recruitment processes.

Linked to this is the quality of the hiring process. World Class RPO’s will measure and assess the quality of each individual hiring process. This means recording, tracking and reporting on hiring manager requirements and expectations for each requisition. It introduces a more relevant and valuable way of understanding hiring performance than the old traditional “one size fits all” hiring KPI’s such as Average Time to Hire and Average Shortlist Size. (Have a look at the piece on traditional recruitment metrics for more information on this subject!)

One of the biggest challenges in this area is defining and using a common set of candidate selection and process performance criteria. Traditional ATS are not designed to measure and track hiring quality. However there are some new hiring quality platforms such as Talenytics (www.talenytics.com) which sit alongside your ATS and focus on the quality part of the recruitment process.

Pillar 2 – Service Efficiency & Positive Stakeholder Experience Combined

The capability to deliver a highly efficient recruitment service whilst ensuring a truly positive stakeholder experience.

RPO’s face a constant balancing act between being extremely efficient, so they can keep prices low and profits high, and ensuring a high level of positive engagement with stakeholders, primarily hiring managers and candidates.

Recruitment Excellence demands that a World Class RPO does both. To ensure efficiency, they need to have processes, people, capability and technology that can reduce administration, eliminate errors, and increase throughput. But this needs to happen concurrently with a passionate desire to ensure the highest level of positive stakeholder engagement.

RPO clients do not accept that a cost efficient service should deliver substandard hiring manager or candidate engagement. Their demands in this area are if anything getting higher.

Balancing service efficiency with customer intimacy is really difficult to do.

I have personally seen the effects of an RPO cost cutting exercise on the service being delivered to a client. Their relationship didn’t last very long.

This is where new technology, especially in the area of AI and BOTS (e.g. http://wadeandwendy.ai/) which can act as surrogate recruiters, will come to the fore.

Pillar 3 – Total Workforce Management

Execute the best fulfilment solution to deliver the most appropriate workforce mix

Client workforces are made up of complex arrangements of permanent employees, salaried staff on fixed term contracts, self-employed staff working on a freelance or interim basis and agency employed workers. We can then add casual staff (on zero hour contracts), bank staff, statement of work contractors, and increasingly “gig” based workers.

We only need to see the current debates going on about the use of agency workers in healthcare, and casual staff in warehousing and distribution to see how workforce mix can affect performance, cost and external perceptions of an organisation.

RPO’s on the other hand have normally grown from a core business that revolves around recruiting one employment type. For many it’s permanent salaried staff; for some it’s as master vendors of contractors or temp staff.

An RPO’s service delivery capability and commercial model maybe skewed to deliver a particular type of worker. An RPO with Managed Service Provider origins will be the most comfortable with recruiting an agency temp for a role through its branch network that could be better filled by a worker on a fixed term contract.

This is a real issue. I have direct experience of a high profile public sector call centre that was recruiting agency temps when it would have been far cheaper and more effective to have a well-managed casual seasonal bank of employees. But because the RPO core business was as a temp MSP all the focus was to source from their own temp workers.

A client needs an RPO who can credibly assess the best mix of workforce type, and recruit accordingly. I have seen RPO clients reduce their agency expenditure by 80% through more control of the temp process, and faster recruitment of permanent staff. And today the breadth of fulfilment capability needs to extend to work that can be best filled by “gig” type engagements and react to “uberisation” practices. But this means that the RPO has to have insight, control and confidence in all workforce employment types and a balanced commercial model that meant it was still making profit.

Pillar 4 – Client Empathy

Represent and leverage the Client’s culture, values and brand

How many times have we sat in a proposal presentation and it’s got to the bit about culture and values. The presenter then says… “Your culture and values are just like ours – that’s why we are a great fit for your organisation.”

My toes always curl at this point as clearly this is not going to be true. How can an RPO have the same culture and values as all of the organisations it supplies?

RPO’s who think they need to reproduce the culture of their clients within their own teams are aspiring to an objective that is unachievable – and probably not what their clients want anyway. Clients are buying something specific –a supplier that is ultra-focused on Recruitment Excellence, and has their own unique way of doing it.

World Class RPO’s are able to understand, represent and operate in a way that supports and champions client values, culture and brand – without trying to embed a replica of it within themselves. World Class RPO’s need to be chameleon-like, putting on the appearance of the client. But inside, the RPO should still have it’s own strong cultural character based on whatever works for its own success.

This ability to represent requires empathy with the client, i.e. a real appreciation of how the client wants to be perceived, and how to use this to be strong in areas such as employer branding, corporate social responsibility, and diversity and inclusion.

Using the Four Pillars

If you are an RPO leader, or a buyer of RPO, then my recommendation would be to consider your activities against these four pillars.

  • For RPO leaders – are you confident your RPO lives up to the principles embodied in the Four Pillars?
  • For RPO buyers – to what extent does your existing or future RPO really get and grip this principle?

Feel free to contact me directly if you’d like to know more about the Four Pillars.

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