As originally published on ERE.net…
A time right about now,
In a galaxy not far, far away,
A world exists where recruiting labor swirls
Within corporate hiring needs,
Melding with sourcing and branding,
Colliding with hiring process and adoption,
A war has erupted in the expanse of options in how to best recruit to fill corporate talent voids: Outsource vs. In Source; RPO vs. RPWhat; RPWho vs. RPHuh?
I am not a Star Wars geek but a fan of the movie series (as a child of the 80’s). When I sat down to write about Recruitment Process Outsourcing (RPO) services and the necessity of developing a comprehensive Request for Proposal (RFP) process when selecting a supplier, I realized the story was much bigger. The title popped in my head as I looked at the evolution of RPO. But as I continued to write I realized that RPO is a world into itself fighting for relevance as it continues to be defined.
I opted to tell the story from a Corporate Staffing Leader’s perspective, taking it from the initial decision point of whether or not to outsource recruiting labor. I could think of no better characters to choose than C3PO and R2D2 to use as metaphor. For those not familiar with the Star Wars movie series, C3PO and R2D2 are droids and sub characters who play pivotal parts in the stories.
Relevant to this article, they each stand alone in parts of the story but are more effective when they are together. They form a team often helping the heroes escape danger or provide insights into the action. Now for the transition, provide me some latitude to support the title, like C3PO and R2D2, an RPO Service Provider can be selected without running through an RFP process. But it is best practice to not do one without the other. The proposal and subsequent information gathered from the RFP process allow an organization to better outline their requirements in evaluating and comparing RPO providers. The results will offer a clearer picture in selecting the right RPO provider while setting performance expectations.
As a corporate staffing leader, I was an early adopter of the RPO model and preferred to outsource recruiting labor versus building a large internal team. The strategy was to shift employment burden to an external partner and control recruiting labor costs as a cost of doing business versus head count. As well as be able to flex resources to meet cyclical demands. I maintained an internal recruiting team to handle critical roles and outsourced all others. The results were successful and like any recruiting team, it was necessary to manage performance closely. I did not have droids to calculate and formulate a strategy, it was a bit like piloting an X-Wing Fighter by feel, but it started with a plan.
Mistakes in Selecting RPO
Over the years, I have fielded inquiries from colleagues regarding RPO services and lagging performance. I found a common theme in that some organizations select and implement RPO services without conducting proper due diligence to outline business requirements, understand cultural acceptance, establish objectives and pilot prior to full-scale implementation. The word “Recruiting” is a broad term often associated with staffing agencies and I learned that most of these colleagues selected their RPO provider similarly in how they select staffing agencies, with little due diligence. I strongly caution against this approach. The services are vastly different. Selecting an RPO provider is a decision that will impact the business (and often HR’s reputation) and it is important to put forth the same effort in selecting an RPO as an organization puts forth in selecting an Applicant Tracking System (ATS). Arguably, the performance of an RPO can have more influence on business leader perception of HR than an ATS.
Importance of Project Management
Proper due diligence requires identifying a project leader, unlike Palpatine (the authoritarian) and more like Obi Wan (the collaborator), to formulate a project plan to help you methodically work through the project phases. If you have a Project Management Organization (PMO), I suggest you partner with them to help drive the project. If not, I suggest someone be assigned to take on the Project Management duties to help drive the project to completion. In support of the Project Leader, I recommend you build a cross functional project team that will include a handful of HR colleagues and business users of the RPO services. I have learned in my career that change management starts early in the process and the sooner you engage business managers, the better the result during implementation. The project team will be the primary resource to answer questions and validate requirements. The scope of your initiative will predicate the amount of time it will take to develop and execute against a project plan. But use the “Force” of project management to guide you.
In its basic form, the project plan should have four phases:
- On Going ROI
For this article as Episode I, we will focus exclusively on parts of the Discovery Phase as it has the most depth and variables depending on your objectives. Not to send you into the deepest reaches of project management space, I will not belabor all the steps associated with conducting proper Discovery as it can be done quickly depending on the scope and resources available to you. But I do intend to hit the basic steps to assure a baseline is established.
The Discovery Phase has four primary stages:
Building the Business Case for Why
Under the Requirements stage, it is essential to build a business case to garner support from the business for RPO, like a representative in front of the Galactic Senate, which starts with a hypothesis to explain “why” this should be considered. Examples might include:
- Metrics show that 80% of recruiting resources are allocated to low-strategic value hiring initiatives.
- A business unit might be located in a unique area where recruiting resources are not situated, and not deemed strategic enough to allocate internal recruiting resources.
- The organization does not have an internal recruiting function but would like to establish dedicated recruiting resources for the business.
Once the “why” is established, next steps would be to expand upon the findings to articulate “what” the RPO will solve or improve.
Defining “What” RPO will Solve
To get to the “what” will entail a bit more research. A few examples might be:
- Review of all hiring workflows and recruiting labor load analysis categorized by type of hiring (e.g. executive, professional, non-exempt) by region and/or business unit.
- More simply, hiring demand divided by resources for proper allocation (e.g. X requisitions per recruiter).
In the least, the research should show an opportunity to improve hiring with additional or redeployment of resources such as efficiencies in time to fill or volume of hires within a period of time. To support the “what”, it is important to know the cost of current operations which will establish budget perimeters. Cost reduction is always attractive to add to the business case but RPO is not about cost reduction rather investment. Unless the RPO is replacing heavy staffing agency or exec search usage and their fees, an RPO will not be lower cost of an internal recruiting function. Rather it is a deferral of cost and an investment to improve hiring to allow the organization to be more competitive. I recommend the improvements be more about quality and speed of hire versus cost.
Now that the business case is developed and project management team is set, we will follow C3RPO & RFP2D2 out of the Requirements sector deeper into the Evaluation stage into the world of “Demo-gobah.” A wild place where plans go awry, surprises occur, and relationships are made or ruined during the review of RFPs and demonstration of services. How do you develop an RFP? How do you select a final supplier? How do you negotiate pricing? What metrics should be measured? In my best Yoda voice: seek these answers you will in the next article of RPO Wars: Episode II – A New Decision.