Resisting Multi-Country RPO

Friday, September 16, 2011
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The advantages of recruitment-process outsourcing -- improved time-to-hire, reduced hiring costs, availability of cutting-edge technology, etc. -- make transferring all or part of its recruitment processes to an RPO provider an attractive option for many HR leaders.

Indeed, the cost savings and other benefits associated with single-country RPO have led to exponential growth in the RPO market. A recent Everest Group study, for example, finds overall RPO deal signings doubled between 2009 and 2010.

The same study, however, sees multi-country RPO deals -- in which an organization outsources recruitment services for two or more countries to a single provider -- lagging behind single-country RPO, finding only a "modest increase" in multi-country deals in that same timeframe.

The Everest Group analysis, which examined multi-country RPO deals with a minimum of four or more recruitment processes covering two or more countries and other parameters, does suggest a high level of interest in multi-country recruitment-process outsourcing -- but little concrete action.

Multi-country RPO can offer an organization many benefits, says Rajesh Ranjan, research director of Dallas-based Everest Group, "such as standardization of recruitment processes across countries, access to a global talent pool, economies of scale, flexibility, improved management insight, etc., that make the value proposition for multi-country RPO compelling enough to be considered."

Still, HR executives must understand that global RPO is "not for the faint-hearted," Ranjan says. "Clearly stated objectives, buy-in at the local and regional levels, support from the top, organizational preparedness and execution are some prerequisites to achieve the end goal."

Experts attribute the hesitance of many U.S.-based companies and their HR leaders to use recruitment-process outsourcing on a global basis to economic factors and vastly different recruiting models in different countries.

"Recruiting needs vary greatly by country," says Mike DiClaudio, a London-based senior consultant and regional practice leader for Towers Watson. "And as companies are adjusting to this economy, they are being more flexible with their HR and recruiting models. This means that each country will have different needs for recruiting, and different models for addressing those needs," he says. "A blanket RPO solution may not address those needs."

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The market for RPO providers is also evolving, DiClaudio adds, noting that more providers have begun to use a partnership model -- similar to that utilized by global payroll providers -- to ensure coverage across multiple geographies.

"These types of partnerships generally take a bit of time to reach their full capability and potential."

Leading RPO providers have only recently begun to integrate their global-delivery capabilities, says Keith Strodtman, research fellow for HfS Research, a Boston-based provider of analyst-advisory services. 

"Many providers have made or are currently making investments that will make global RPO sourcing more attractive to buyers," Strodtman says. "If these investments pay off as the providers hope they do, we may see an increase in truly global deals."

"As the future of work becomes more global and specific skill gaps continue to develop, companies will look for solutions like RPO to source the talent required to grow their businesses. They simply won't be able to meet their skill needs without services like RPO."

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