With a fledgling market size to begin with, the RPO service providers now boast a growth rate of almost 40-50 percent annually
There should also be a period where the service providers meet the various heads of department to understand more of their expectations of the process and create a buy in for the project
As market disruptions increase, many look towards external resources for sustainable answers to improve productivity. Building from the People Matters & Randstad roundtable series, we explore the ways to foster client and the RPO partnership to build those sustainable solutions. The Randstad Talent Trends report showcases the growing need among HR leaders to create greater flexible working options to attract an increasingly mobile work force. This trend is best elucidated by the growing need of outsourcing recruitment processes. With a fledgling market size to begin with, the RPO service providers now boast a growth rate of almost 40-50 percent annually. According to Dr. Moorthy Uppaluri, MD & CEO, Randstad-India, “The top three growth drivers for the RPO boom in 2015 were the increasing need for organizations to enhance quality of hiring, reduced cost of hiring and increased speed of hiring. Organizations are moving up the value chain, from outsourcing one or two processes and short-term projects to end-to-end RPOs that include everything from sourcing, scheduling, selection to job offer roll-outs and on-boarding hires.” The progression, although, has not been as smooth as one would like to believe. There still exists several concerns when it comes to a RPO model of hiring. With a perceived uncertainty around the efficacy of RPOs, leaders are skeptical towards investing in them. This compounded with bad experiences in the past has built a certain ‘risky’ image of RPOs. But with the right strategy and an effective partnership model, RPOs can drive business change. The correct expectations setting and establishing a strategic partnership is a business imperative which will show the impact of an RPO model on the ROI structure of the client company.
HR service providers have reported a steady increase in business as organizations are constantly redefining their core processes and are looking at RPO models to acquire the right talent. RPOs provide unprecedented access to active and passive talent pools that help in picking the right talent and longer retention periods. However, outsourcing of such processes varies from sector to sector and organization to organization. This has helped RPO partners provide unique and customized solution to their clients. The easiest form of RPO is the hiring of “Recruiter on Demand”. The focus here is less on streamlining the hiring process and more on getting recruiters to solve hiring needs of an organization. Although common, it carries with itself the potential of failure as the problem the organization tries to address through RPO might be more systemic. The more effective and common ways of running a RPO model are Project-based and end-to-end RPO. The expansion of an organization needs to be supported by quick and effective hiring of talent in both top and mid-level positions. With businesses focusing on increasing productivity, HR departments use outsourcing as a strategic option to hire the right talent.
Concerns with the RPO model
Sudden demand for workforce can have a direct impact on an organization with increased pressure on the HR function. Often the choice of changing the recruitment strategy is tied to a company's operations or strategy, including challenges around growth such as globalization or shrinking markets. Along with the rise in demand of specialized recruitment and staffing services, there exists a lot of apprehension among the HR fraternity with regards to the outsourcing of various portions of their recruiting process. Managing attrition rates, establishing clear, quantifiable deliverables and ensuring a good candidate experience during the hiring process have been important concerns while working with the service provider. This compounded with the problem of sealing the accountability on both the sides has further encouraged many HR professionals to doubt the efficacy of RPO in its current state. Besides this, organizations also shy away from hiring a RPO partner due to the belief that outsourcing recruitment process would lead to huge differentiated costs, directly impacting business profit.
Most organizations have been comfortable in outsourcing transaction intensive activities like payroll management, compensation and benefits management. But outsourcing a core process like recruitment is a strategic change within the organization. This disrupts the existing structure; both in terms of human and inventory capital. This causes a resistance in opting for alternative methods to increase productivity. For RPO, it becomes even more relevant in case of Human Capital Intensive industries. Since the result of hiring of good talent is directly reflected in the final balance sheet, it becomes a risk to invest in outsourcing recruitment processes. To avoid such issues, building an effective working partnership should be the top priority.
Partnerships as an effective solution
The ability of the service providers to understand the business culture is central to recruiting people who would fit in seamlessly without affecting the fabric of the company. The first step towards this is born out of an interaction between the two parties that can help the service providers know more about the client’s business structure. This will help the service providers plan effectively on the four parameters namely, scalability, quality, speed, and maintaining employer brand. This initial testing period can be done through various ways. But they need to involve a certain ‘hand-holding period’ where the service provider is taken through the inner workings of the client and is exposed to the culture, ethos and work-style of the client company. This helps the service provider understand the needs of their client and strategize accordingly rather than bringing a fixed template solution.
When it comes to the selection of the RPO partner, their ability to offer flexibility and scalability become important factors. The ability of the service partner to provide the right mix of traditional and innovative models becomes a deciding factor. For niche hiring purposes, the domain knowledge of the service providers becomes imperative to drive results. These capabilities backed by a working knowledge of the latest analytics and reporting techniques make for an ideal RPO partner.
The understanding of the service provider of its clients’ business should be supplemented with a period where they meet the various heads of department to understand more of their expectations of the process and create a buy in for the project. This process along with the initial ‘handholding’ period is crucial in setting up subsequent SLAs and other result-based deliverables. It also helps the client company figure out areas where its intervention is necessary as compared to the areas where their involvement might hinder the process. A good RPO partner is one who provides resources for transparent communication and coordination with different teams and understands the company’s existing hiring model. A company venturing into a RPO model requires a process of unlearning and evolving the parameters in its model of assessment. Starting from a white canvas and establishing new benchmarks, based on a real-time assessment of the problem can make the partnership fruitful. With well-articulated requirements and well defined deliverables based on equal inputs from both the parties, the RPO partner now stands to facilitate a smooth transition to stabilize talent requirement and management processes.
A good partnership also facilitates open conversations and a chance to drive productivity. Most clients prefer to skip this step and directly start off with the recruitment process. Without bringing the internal functioning and both individuals and processes up to speed with the outsourcing process would create friction and impact RPOs efficiency to bring in desired results. As noted by a participant of the roundtable series, stakeholder involvement is a key enabler. “And it's not just about keeping them informed, but to actually explain the nitty-gritty of the RPO program to them.”Since the establishment of the right RPO structure takes time and this prolongs the duration it takes to have a significant impact on the financial year end accounts of the company, it is imperative today that the leaders look closely at creating and making a successful case for the need of an RPO model. Working with RPO service providers is a strategic partnership. It is imperative from the clients’ side to have clear understanding of areas where intervention is necessary. A RPO model for end-to-end recruitment would also mean reallocation of resources already in place. HR heads will need to ensure that these resources are relocated to keep pushing the business productivity. Similar to the trend followed in the IT sector after the advent of cloud system, the outsourcing recruitment processes would make certain systems within the organization obsolete. So there lies a need to pro-actively distribute resources to ensure that it doesn’t hamper productivity.
In conclusion, outsourcing of recruitment process provides several strategic advantages. Besides providing economies of scope and scale, RPO partners provide an array of services. These services are targeted to ease bottlenecks in the talent pipeline for a company. From Greenfield project hiring to end-to-end bulk hiring, service providers are innovating and customizing solutions to drive business progress. Although the selection of the right RPO partner depends heavily upon the environment external to the company, strategic partnership between the two parties is necessary to see business impact. The HR professionals involved in the processes need to proactively look at making the right RPO model an extension of the organization to make the outsourcing model successful and sustainable, with the right HR service providers.