RPO's Value Proposition
Recruitment-process-outsourcing clients weigh in on what they value most from the provider community.
By Larry R. Heckathorn
Many companies are facing unique challenges in their efforts to recruit quality candidates for job openings. With unemployment at historically high levels, it is a daunting task to sort through all the potential applicants. To help in their efforts, companies are turning more and more to recruitment-process-outsourcing providers for assistance.
Understanding the RPO-provider marketplace presents additional challenges. Over the past five years, there has been significant consolidation among providers and rapid changes in technology and social media.
What are the typical process categories and what level of importance do other companies place on these categories? To assist companies in their analyses and help them establish a starting point, The Outsourcing Institute, in association with Human Resource Executive® magazine, recently conducted a survey of RPO providers' clients with the intent to publish a report that will help companies identify providers that fit their goals. The report is also designed to highlight what clients value when they evaluate current or potential RPO providers. This article and charts recap the findings of that survey and is designed to assist you, regardless of your current situation, in identifying the importance other companies place on specific processes within RPO.
If you are a business that currently outsources these services, you may already have a good idea of what does and does not work well within your RPO processes. If you are unhappy with the state of the current processes, you may be considering transitioning to a new provider. If you are considering outsourcing RPO for the first time, you may have a good idea of what does not work well within your current in-house processes. Whichever situation you find yourself in, it is generally a challenge to find a good starting point for evaluating and scoring the services of RPO providers.
As mentioned above, the survey data for this research was gathered from responses of RPO providers' clients. The findings are based on the survey analysis of Human Capital Group, an independent third party, and are not the opinion of OI or HRE. Responses were collected through an online survey, which was distributed indirectly by sending more than 25 RPO service providers the link to send to their clients. The RPO-provider clients that responded represented more than 12 different industries and a broad mix of company sizes. Based on full-time-equivalent employees, the study is spread across the following: 100 to 1,000 employees: 32 percent; 1,000 to 10,000 employees: 25 percent; 10,000 to 40,000 employees: 18 percent; and 40,000 or more: 25 percent.
After collection, the data was loaded into HCG's database for analysis. In addition to analyzing specific elements within each of the categories, algorithms were used for determining the overall importance clients place on categories as they relate to each other. The calculated scores presented demonstrate the relative importance of the categories based on the feedback of provider clients.
Four primary categories were identified as most important when evaluating a current or potential RPO provider:
* The Solution Delivery category is used to score the client's perception of the vendor's ability to provide a well-defined transition process; meet the requirements outlined in the statement of work; meet the client's compliance requirements, technology requirements and systems requirements; and provide qualified candidates in a consistent and timely way.
* The Understands Client Needs category is designed to help measure how well the vendor understands its client's culture, business operations and expectations. It was also used to score the performance of the vendor's team and relationship with the client.
* The Value for Fees category is used to score the client's perception of the vendor's ability to consistently provide services at a cost that either met or exceeded its expectations.
* The General Services Capabilities category scores the client's perception of the breadth of services offered by the vendors from the process of sourcing candidates through program governance.
For the year 2014, Solution Delivery, Understanding Client Needs and Value for Fees rank as the most important considerations of an RPO provider by their clients. Although the scoring was very close, Solution Delivery ranked as the most important category. It should be noted that all three categories are viewed as critical in evaluating the performance of a current or potential RPO provider. It should also be mentioned that, as important as cost is in evaluating the performance or potential of an RPO provider, it is not the primary driver for most clients.
It is helpful to understand in more detail each of the categories and how clients arrived at their conclusions.
No. 1: Solution Delivery
Consistently providing qualified candidates in an expeditious manner for job openings was cited as the No. 1 objective of clients. To meet this category objective, clients took into consideration the following:
1. The provider-system solutions that integrate with the client systems,
2. The provider-service levels and commitment to continuous improvement,
3. The quality of the provider's management/technical personnel,
4. The ability to provide a well-defined governance and reporting solution,
5. The ability for the provider to meet the requirements outlined in the statement of work, and
6. The ability of the provider to meet the company's compliance requirements.
Clients noted that many of the providers use proprietary systems with advanced technologies and profess to offer processes of continuous improvement. However, they overwhelmingly felt the key to this objective rested in the quality of the RPO's management and technical personnel, and in the RPO provider's ability to meet with and provide reports to the client's executive team. Although meeting the requirements outlined in the statement of work and the company's compliance needs were necessary and could be a deal breaker, these ranked slightly lower in importance.
No. 2: Understanding Client Needs
Understanding Clients' Needs was ranked second by clients, but only slightly behind Solution Delivery. Clients identified the following four key areas of focus in this category:
* The overall business strategy and culture,
* Executive involvement and reporting,
* HR/recruiting manager needs and internal processes, and
* Hiring-manager requirements.
It should be noted that, in today's environment, it is critical that the RPO provider not only understand the business operations but also understand the needs at all levels in the client organization. The most successful providers recognize this need and structure their teams with members who have experience working closely with each of these critical levels in a client organization. This team chemistry is a primary consideration in evaluating the RPO provider for this category. The providers that score the highest in this category don't wait for the client to make requests. They are proactive and creative in exploring solution alternatives and presenting them to the client.
No. 3: Value for Fees
Not that long ago, clients viewed cost as the primary driver in evaluating and/or selecting an RPO provider. Although important, it has dropped to third place and refers more to value versus cost now. Cost is still important, but only as it relates to the quality of all the services being delivered to the client. Value can also have different meanings based on the needs and objectives of the client. Clients attribute the identification and tracking of the right performance metrics as a key to measuring value as it applies to their specific objectives. It is the combination of Solution Delivery, Understanding Client Needs and Cost that meet the overall client objectives to determine Value for Fees in the eyes of the client.
No. 4: General Service Capabilities
Clients consider this category important, even though it didn't rank as high as the other three categories. Most of the clients viewed the end-to-end services (candidate sourcing through candidate onboarding) as a basic requirement for considering the provider's services. Even though a client may want to begin utilizing only the basic services (sourcing, screening, interviewing, offer and onboarding), clients felt that the ability to have additional services available to them was a real plus. Some of the additional services that clients viewed positively include employment-brand management, background verification, workforce planning, contingent staffing, outplacement, talent management, recruitment and hiring-manager training, program design and process consulting. By offering additional services, the clients feel they are given the opportunity to see the bigger picture and chart a path into the future that meets the organization's objectives.
We would like to thank the providers and their clients for their continued support, which made this report possible. The chart featured on this page indicates a comparison of the strengths of each of the participating providers as seen by their clients for each category.
Accolo Inc. Accolo's approach combines a patented SaaS Cloud Recruiting platform with embedded job marketing, social-referral development, a Hiring Intelligence Knowledgebase and best-practice-based workflow. Companies use Accolo's cloud-recruiting solutions to materially increase the productivity of their internal recruiting processes, while scaling recruiting capacity on-demand. Accolo, a founding member of the Recruitment Process Outsourcing Association, is often leveraged by clients as their turn-key internal recruiting department.
Accolo's on-demand cloud-recruiting capacity includes the Accolo Hiring Consultant Network, comprised of certified and experienced recruiters. Its clients include companies of all sizes located in the United States, including Farmers Insurance, Dex One, Waypoint Homes and Home Instead Senior Care.
Futurestep, A Korn/Ferry Co. Futurestep offers high-impact, customized strategies aimed at helping organizations meet specific workforce needs. It has an extensive, wholly-owned global-delivery footprint and SMC infrastructure in the market. It boasts sector expertise of proven industry specialists, well-trained and well-equipped recruiters, and a geographically diverse global leadership team.
The company has created a dedicated personal-development application that leverages Korn/Ferry's intellectual property by integrating it into its core services. Its RPO offering encompasses services from across all of its specialist teams, including technology assessments, sourcing strategies, talent communities and brand audits. Its RPO solution aims to deliver "next-generation RPO" with a focus on business impact.
Novotus Novotus is an established recruitment-process-outsourcing organization equipped to solve any talent-acquisition need from project hiring to full outsourcing-recruiting solutions. It serves as a fully integrated extension of its client's HR teams. Novotus was the co-founder of the Recruitment Process Outsourcing Association and is the largest RPO provider based in Texas. In the last 15 months, it's helped clients with thousands of hires in 39 states and seven other countries across all skill levels and industries. Its competitive advantage is its ability to combine the deep research and sourcing capabilities of retained search firms with RPO technology and processes to deliver superior recruiting results. Recruiting will always be its core competency, and its process and technologies activate both active and passive candidates.
A strength, it notes, is its people, highly skilled and motivated. It describes its culture as one of integrity, accountability and innovation that results in a "Talent Lab" for continual improvement and refinement.
PeopleScout PeopleScout, a division of Chicago-based Seaton, is a leading global provider of RPO services that helps companies of all sizes, and in many industries, with their exempt and non-exempt hiring needs. PeopleScout is known as an industry pioneer and has grown to become one of the largest RPO providers today, placing more than 250,000 employees annually. PeopleScout's suite of services includes full-cycle and partial-cycle services, Project RPO, Recruiter On-Demand, employment branding, onboarding, career counseling and employee retention.
Its key differentiator, it notes, is its unique approach to partnership and its ability to provide customized solutions for every customer based on its unique business objectives and landscapes. It works to accomplish this by using a fully dedicated approach in delivery team resourcing that is aligned to its clients' success.
TalentFusion TalentFusion was founded in 2000 and delivers RPO services to Fortune 2000 organizations. It purports to be a thought leader in the RPO industry, having played an important role in the formation of the space. It offers a highly consultative model, expertise in applicant-tracking-system and customer-relationship-management implementations, and change-management-consulting services.
In addition, TalentFusion specializes in aggressive sourcing programs to find and attract very difficult-to-find and fully employed talent. Its CRM systems allow for innovative technology-based recruitment strategies that are customer-centric and flexible.
The RightThing, an ADP Company The RightThing, an ADP Company describes itself as a premier RPO provider. Harnessing the power of proprietary technology, it continues to lead the industry with innovative, scalable solutions that help clients find, recruit, hire and retain top talent. Dedicated to recruitment leadership, technology and outsourcing, The RightThing offers recruiting solutions to small, medium and large organizations serving many of the world's leading companies.
Services include talent and organizational consulting, offer compilation, candidate-pipeline and talent-pool building, candidate onboarding, internal-process and enterprise-resource-planning management, exit interviews, requisition management, campus recruiting, applicant intake, employee-referral administration, resume management, applicant tracking, test and assessment administration, diversity 360 consulting services, interview administration, recruiter and hiring manager training, interview scheduling and off-boarding.
WilsonHCG WilsonHCG is a full-service RPO and human capital consulting provider that operates on the principle of providing true partnership to its clients. It creates scalable and customizable human capital solutions. Founded in 2002, WilsonHCG still supports its very first client and is committed to customer satisfaction and flexibility to design recruitment services based on its clients' ever-changing needs. While maximizing clients' talent-acquisition processes is essential, WilsonHCG recognizes the relationships it develops lead to clients' results. Based in Tampa, Fla., it has a global presence with the capabilities to provide services in six continents and more than 25 countries. It operates on a hybrid-delivery model that combines on-site resources with service center/office-based and virtual/off-site resources.
WilsonHCG states its main differentiator is its people. To ensure full commitment to its clients and their requisitions, it utilizes dedicated teams of full-time recruitment professionals who specialize in client-specific industries. Its talent-acquisition professionals are assigned to clients based on their experience in the client's industry, their functional recruitment expertise and their ability to align with their client's company culture.
Larry R. Heckathorn is a co-founder of Human Capital Group, with extensive experience in assisting clients in outsourcing various HR programs, including recruitment, payroll, benefits and relocation. Send comments or questions about this feature to firstname.lastname@example.org.