Recruitment process outsourcing (RPO) and the outsourcing of related HR tasks involves working with an external partner to improve the way a company moves people in, around and out of an organisation. It can increase quality, provide a better service to the business and reduce costs. RPO may include internal mobility, career management, redeployment, contingent workforce management, outplacement and the leveraging of a shared service infrastructure to process HR and recruitment related activities in lower cost offshore environments.
Corporate challenges such as experienced talent shortages, competitor threats, budget or cost control and salary inflation are all interrelated. While the current economic slowdown has changed the talent landscape, it has also created even greater competition for experienced candidates and those with specialist skills. Salary inflation is in part due to increased competition for talent. Budget costs blow out because organisations aren’t able to source their talent through regular sourcing channels, and they turn to high-cost channels like recruitment agencies and search firms.
Benefits of using RPO in 2009
In 2009, organisations run the risk of only reviewing the increasing volume of jobseekers available in the market as opposed to having a robust approach to attract top talent. The real advantage to RPO is that as a solution it addresses the above challenges but provides additional benefits that many organisations are not considering in the current economic climate. The ability to retain a flexible yet dedicated staffing solution that allows you to attract and retain top talent at a lower cost whilst building a capability that will allow you to respond ahead of your competitors to a market rebound in 2010 and beyond.
Reduce budget costs
One of the core drivers for any RPO engagement is cost reduction. Good RPO providers can locate, attract and engage top talent faster than an organisation’s competitors can without hurting the budget costs. A rationalisation of costs can be achieved in a number of ways.
• Reduced agency usage – by reducing or eliminating high-cost agency use
• Manager time save – by reducing the amount of time hiring managers need to spend on recruitment
• Third party supplier management – by ensuring a consistent ratebook across a panel of third-party suppliers
• Advertising and job board management – by buying in bulk, and negotiating with job boards and advertisers
• Administrative overhead – by taking on the administrative component of recruitment at a lower cost
• Wage and cost arbitrage – where necessary, locating recruitment staff offsite in lower cost-centres
Reduce salary inflation
Salary inflation links directly to talent shortages and the resulting artificially increased demand. While a good RPO provider can’t directly tackle salary inflation, there are workarounds through ensuring that the war for talent is won without resorting to reactive salary bidding.
Key to attracting candidates without resorting to elevated salaries is the development of a clearly articulated employer brand. It’s important to ensure that the organisation’s brand is powerful and effectively communicates the Employee Value Proposition (EVP) to any potential candidate. A positive, robust EVP engages potential employees and provides an additional point of attraction, and this is clearly illustrated through Google’s approach to candidate attraction. Google conducts no paid recruitment campaigns, but still receives in excess of a million applications per year. Google’s EVP and employer brand are so strong that candidates will accept a salary reduction just to work for them.
Good RPO providers should be able to help with building a positive EVP and conducting candidate attraction campaigns. Other than facilitating the attraction and retention of high performers, RPO can also help solve talent shortages in several ways:
• Sourcing channel optimisation – RPO providers will research and identify the most appropriate sourcing channels to use in order to attract the talent which is available in the market. This includes external direct and internal hiring, two channels which are frequently underutilised.
• Direct hiring – RPO providers specialise in direct sourcing – that is, attracting candidates using the client’s employer brand – a particularly effective method of building candidate pools to offset escalation in demand.
• Internal hiring – RPO providers can run internal mobility schemes, enabling talent to move within an organisation. The benefits of internal mobility are twofold: reduced cost of recruitment, and retention of staff.
• Tapping hidden talent pools – RPO providers will implement methods to locate candidates who aren’t currently in the job market, thereby accessing a pool of candidates that aren’t visible through conventional recruitment activity.
These methods are all reactive, however. Ideally, an employer should be forecasting talent requirements ahead of time, and pipelining candidates accordingly. RPO providers generate real value here by implementing recruitment technologies that provide extensive management reporting capability and allow proprietary databases of potential candidates to be built. In today’s economic conditions many companies remain unaware if any level of hiring will be performed in 2009 and what the levels of employee attrition may be expected, thus resulting in limited talent related planning which will in turn result in using high cost channels to recruit when the need arises.
Tips for HR to use RPO and outsourcing effectively
• Know what your requirements are – A major challenge for organisations to overcome is understanding their current state, and recruitment requirements. Does your organisation have a recruitment strategy? Is it working? What is it that is not working? Will an RPO solution adequately address your organisation’s requirements? Do you know where to get access to high performing talent not just active job seekers?
• Gain stakeholder approval from the outset – The best RPO relationships work because both parties are prepared to work hard together to transform the recruitment function. Stakeholder approval at all levels is vital in ensuring that the RPO provider can work freely and effectively.
• Be in it for the long haul – While RPO can begin to deliver results very quickly, developing peak efficiencies takes time. The most successful RPO partnerships are developed over long periods of time, and efficiencies continue to develop throughout the course of the relationship.
• Become involved in strategic planning – Recruitment should not be treated as the poor relation in strategic planning; it is an important segment of company strategy, and should be included in a timely fashion.
• Proactive, not reactive – Now is the time in which organisations need to be making reasoned, confident decisions, ensuring that the best talent in the organisation is retained, and that any new talent is the best available. Regardless of economic conditions, the central focus of recruitment should still be attracting and retaining the best people available.
When Molson Coors Brewing Company completed its takeover of Bass Brewers in 2002, it acquired a British brewing legend. The newly created Coors Brewers Ltd became the UK’s second largest brewery. Employing 2,500 people across the UK, Coors Brewers is determined to become the top UK brewer.
Coors’ ambition extended to its talent. With the Coors brand having a low profile in the UK and uncertainty within Bass Brewers on the new corporate identity, the organisation would need to not only attract fresh talent with a new and unexplored brand, they would need to connect with the existing workforce. A streamlined and high impact recruitment strategy was needed to address these challenges.
Coors Brewers decided to outsource all recruitment process to Alexander Mann Solutions (AMS), who would sit onsite at the Coors headquarters in Burton-on-Trent. In addition to its day-to-day recruitment responsibilities, AMS was tasked with helping to drive the Coors employment brand internally. Feedback from the internal employer brand campaign was overwhelmingly successful, with the company recognised internally and externally as an exciting, dynamic organisation and a leader in their field.
To establish the Coors employer brand within the wider UK beer industry, AMS leveraged new technology, using web networking tools such as LinkedIn in conjunction with traditional advertising. Results were impressive; applications up by 50%, recruitment agency usage dropped from 94% to 15%, time to hire rate dropped to below industry average, and the talent recruited into the organisation were all culture carriers of the Coors employer brand.
The recruitment team also supported other strategic initiatives, working with Coors to diversify the workforce, addressing work-life balance issues, and attracting more women to the business.
