RPO - THE ENEMY OF AGENCIES? THAT'S JUST NOT CRICKET!

A fellow recruiter I bumped into the other day was giving me their twopence worth on the current state of play in recruitment and the world in general. The upshot being, what on EARTH was I thinking in looking to collaborate with the enemy. For enemy, read RECRUITMENT PROCESS OUTSOURCING.

Good question, I thought. They ARE the enemy, right? Well in actual fact I think it depends where your thinking is at. Is it in the past, present or future? Ideally it will be a combination of the latter two. The past, other than a reference point to help us understand and learn how we are doing now, is not actually that helpful. Just as the Australians might go on about their fantastic record as a cricketing nation, at present they are a shadow of their former selves and no longer own that most sought after of urn's, otherwise known as "The Ashes".

LEARNING FROM THE GREEN CAPS

Whilst Australia face the turmoil of change, England, along with some of the emerging nations have looked at the past experience and performance of the boys in the baggie green caps to see how they can learn and build for the future, because if they were not to look and learn and subsequently change what they were doing, their very presence at the top table of world cricket was looking decidedly dodgy. Just look at what happens if you wallow in the past. Think West Indies and, whisper it quietly, Australia. The answer is backwards!

The emergence and subsequent emergence of RECRUITMENT PROCESS OUTSOURCING (RPO) in the recruitment world has I feel, brought some much needed changes to the industry. And instead of being in denial, the sector needs to wake up and begin to engage them, rather than bury our heads in the sand and stay in denial. If you don't believe me then click here to read this well written post by Damien Stork, Director at Ochre House. If you work on the agency side it's scary. And if you work on the agency side and are not sitting up and taking notice, it'll only get even scarier.

I'm going to take notice. Take my own employer, the Stopgap Group. Our market position as specialists in marketing and HR recruitment as well as the reputation we have built over the years, means that we work with many of the FTSE 250 organisations; however the last five years has seen a number of them outsource some or all of their recruitment activity to third parties. Consequently, an increasing proportion of our business is being done through these companies and we wanted to recognise that these RPO's and Managed Service Providers (MSP's) were important customers too. As a result and from what we can tell looking at the current market, we have been the first recruitment company to make a commitment in creating a bespoke role within it's business, through our"Head of Commercial Partnerships". This innovative new role is designed to focus largely on developing and managing relationships with RPOs, MSPs and other third party providers. And it's this that was the foundation of the "enemy" jibe.

I passionately believe that this is a great opportunity. We already have some valuable relationships with these organisations and work hard to meet our objectives with them though service level agreements and and KPI's. However, I believe that there is a missed opportunity to work more proactively across the wider business, building on our existing relationships and exploring new ones too. We believe that it will be great for our business and our customers to have a full-time focus on this growing and ever changing area. Recruitment is changing and evolving at a pace not witnessed previously and it's exciting for Stopgap to be leading in some of that change.

And are the RPOs the enemy in the same way that those age old adversaries Australia and England are? No, why should they be and more importantly, they can't be! They will continue to play a key role in constant change in recruitment and the agency side can choose to be at the party or not.

And we have to be honest here. RPO have already brought some improvements in to play. We are already seeing some of the better, smarter outsourcing providers develop additional offerings - outside of core recruitment for example. So it's ALREADY in a state of evolution with offerings or added value including "employer branding", bespoke talent attraction strategies and so on, as well as including the improvement in some organisations ability and efficiencies in identifying and maximising talent they already have within their own building!

Furthermore, whilst outsourcing requirements will grow and the suite of services expand or shift, I sense that there will be a trend in RPOs and the like, specialising in certain areas to differentiate themselves.

In turn, whilst some HR departments relinquish recruitment as part of their remit, I believe that there will be some movement towards more employers introducing their own in-house teams as they learn enhanced processes, sourcing techniques and the importance of strategic employer branding from the very RPOs that they have employed to that point. So we'll all need to get smarter at how we collaborate with these teams too, because this is another trend that is already very current....

Along with other trends such as the rise of social networking and the in-house model mentioned above, RPO is playing an instrumental role in effecting change across the recruitment industry. Much of this has been for the better, such as bringing more rigour, structure and discipline to bear where, lets face it, it was sorely needed. The rub is that I sense an over emphasis on cost reduction could detract from the offering and the genuine opportunity to collaborate with specialist agencies. Driving out unnecessary cost and making recruitment a leaner business is 100% the right thing for all of us to be doing, but if it is the lead objective in any recruitment, not just where it has been outsourced, then corners will get cut and the potential benefits will not follow, meaning that the best talent won't either.

So the message is, certainly from what I am witnessing in my conversations with RPO and in-house recruiters, that we need to up our game on the agency side. The fact of the matter is though, that the recruitment industry or recruitment agencies typically follow market trends as opposed to leading them or innovating to add value when change occurs. We need to look at ways to change that dynamic, and we are taking the approach of looking to collaborate with "the enemy".

So far the prognosis is really encouraging. I've met a lot of super people during the early days in my new role and had some very good, open, frank and yes, collaborative conversations. There is a general agreement that RPOs do want to move their rather transactional relationships with recruiters on to one that has greater depth and transparency.

I have though, encountered some suspicion or mistrust from the odd RPO in what we are looking to achieve with them. This may well be a manifestation of competing for the same ground some or much of the time, but the overall indications are hugely encouraging and that we can build closer ties to become true partners rather than simply suppliers.

This is an exciting time in recruitment. The pace of change is unprecedented and by looking to truly engage with third parties and bring a specialist approach to how we work with them, the future can be as bright as I'm sure England's visit to Australia will be this winter!

Comment by Jimmy Roa on November 22, 2010 at 9:23pm: "Change is the only constant" - Heraclitus, Greek Philisopher

Comment by Andy Young on November 23, 2010 at 2:24am: Hi Jimmy. Nicely and succinctly put! Thanks for reading.

Comment by Gerry Crispin on November 23, 2010 at 11:42am: Very timely post Andy. Thank you. This discussion is especially relevant given the extraordinary differences in recruiting sources in the UK, Australia and the US. I can see why the traction of RPOs in England (especially) would directly be perceived as having an negative impact on 3rd party. However, its the evolution of how internal staffing has relied on 3rd party there that suggests to me why RPO firms working with major global corps might be able to make a country by country RPO agreement- at least as an interim step to integration pressures. I'll have to think about this but it has come up repeatedly now during 2010.

Comment by Recruiting Animal on November 23, 2010 at 5:02pm: This article says it's good to work with RPO's but does it say why? I couldn't see it

Comment by Andy Young on November 23, 2010 at 6:30pm: Hi Recruiting Animal. Thanks for reading and commenting.
Apologies if I was not clear as far as benefits in working with RPO.
The way I see it, the client base of traditional recruiters is shifting. Employer companies are working more and more with RPO organisations where historically they would typically use recruitment agencies / consultants to do their hiring. Some still do. This number is in decline. Similarly, employers are beginning to set up their own in-house resourcing teams.
To me, this means we need to make an active choice. Accept that change is here now, that we are competing for a smaller pie and look at new and innovative ways of finding talent for our clients (directly or via 3rd parties). Alternative? Deny change is upon us / carry on the way we have historically.

I'm choosing the former and by doing so, looking to collaborate with RPO organisations, who, in my humble opinion are somewhat of an unusual hybrid - customer / partner / competitor.

I also believe, a belief backed up in my conversations with people within the RPO's, that there is a need for them to work with specialist recruiters. Specialists who know the market, the employer companies, the candidate and professional community (in my case, marketing) and share and educate through this. That is the area of "value add" that they tell me they are looking for - and as a true specialist in my field, one we can offer and aim to improve upon to give outstanding service.

In turn, we seek to develop more meaningful, in depth and trusting relationships with our RPO partners. They won't always need to brief us, as we recognise that there is a significant drive towards direct sourcing etc. But where there is that trusting relationship and expertise that I can provide, then it's more likely that when they do have a brief to share externally, they will speak to me before they engage a cold call or a list of hopefuls on an unnecessarily inflated PSL.

Hope that helps to clarify. I do understand the sensitivities that some have around the RPO model and it's potential conflict with agencies, but I do passionately believe that there is high potential to work together and collaborate for mutual benefit.

Comment by Andy Young on November 23, 2010 at 6:40pm: Gerry, thanks for commenting and your input.

I'm not that familiar with what is happening in Australia in the world of RPO, but what I do know is this. The UK has an uncanny habit of mimicking the US, the only debate being not if we follow, but when. RPO now is beginning to get a foot hold here, mainly within the big blue chips in certain sectors, but I think it will continue to mature. It has a way to go before saturation, which I think is both an opportunity and a threat for many recruiters.

In terms of the country by country integration, I'm not as informed as yet to be as knowledgeable as I'd like to be but I do so a varied approach in how different RPOs are tackling it over here. But the buzz word I am beginning to pick up is "Glocal". Sounds a bit corny, but it kind of does what it says on the tin!
Thanks again Gerry.
All the best,

Comment by Gerry Crispin on November 24, 2010 at 4:22pm: Thanks. 'Glocal' as a word I attribute to Chris Hoyt in his efforts to articulate Pepsico's global integration of its employment brand. Changes were made country by country to accomodate local differences in how their 'brand' plays out. With respect to 3rd party however, its dominance as a source in UK (60%) versus the US (2%) that it causes major heartburn in every US staffing leader charged with dealing with it. RPO could conceivably be perceived as the most acceptable albeit short-term (and in some situations short-sighted) solution to diminishing the cost of recruiting in the UK. Still thinking.

Comment by Slouch on November 24, 2010 at 4:32pm: Hi Andy, I just read what Gerry wrote and you can watch Chris Hoyt talk about "glocal" here on the Monster Thinking Blog. It's from Recruitfest!

Comment by Andy Young on November 24, 2010 at 5:43pm: Slouch, Gerry. Yes, spot on - it was Chris Hoyt who coined the term "Glocal" - it was a colleague of his, Katie who brought it to my attention. I'll watch the Monster Thinking blog and hope that he forgives me for suggesting the term is corny (it is, but I still love it!).
Would welcome more debate on the RPO area as and when and I really appreciate the comments to date.
Thanks for taking the time out guys.

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