RPO Success Factors

An expert on HR outsourcing offers some five factors HR leaders should consider if they hope to avoid potential pitfalls when looking to outsource recruiting operations.

Sunday, March 16, 2008
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There are many reasons why a company may look to outsource its recruiting operations. Typical reasons include cost reduction, improved compliance, better support for diversity programs, faster fills and more time to focus on other talent-management issues.

Turning to a provider to help support your recruiting operations can be extremely productive and successful if you stay focused on impacting those business metrics that are important to your shareholders.

Alternatively, an RPO engagement that is not managed correctly may experience pitfalls and actually result in decreased performance. To avoid these risks, we suggest you consider the following five factors before you launch an RPO program.

Communication and Change Management

Your provider should be working with you to develop and roll-out an effective change-management plan for your organization. This step is perhaps the most important, and most frequently overlooked, part of the implementation of an RPO program.

Executing change management correctly will ensure that a retained HR organization, as well as its internal clients, fully understand what processes will work going forward. Think carefully about the pockets of resistance. A good change plan will leverage a variety of techniques: focus groups to uncover issues, executive interviews and perhaps surveys of candidates on the process.

Use this data to guide communications that address issues and sell benefits throughout the roll-out.

Leadership Support is Essential

An organization's executive sponsors need to actively and publicly support the program and strategy. They need to explain the decision and reinforce the strategy to outsource throughout the organization. These sponsors, and the key leaders within a provider's organization, should comprise the steering committee for the engagement.

Adopt the Recommended Business Processes of the Provider

When you select an RPO provider, you should be hiring the firm for its expertise in recruiting. Many organizations make the mistake of hiring a provider, but don't give the provider the ability to implement the processes it has used successfully in the past.

For example, don't necessarily expect the provider to take on an organization's employees or even do all of the work at the client's site, as these practices often don't deliver optimum results.

HR needs to take advantage of the provider's in-house expertise as well as the scalability and technology of their operations infrastructure.

Agree on Scope of Work

This sounds obvious, but there's lot of opportunity for misunderstanding if the processes and handoff points aren't agreed upon before the contracting is finalized.

Lay out the organization's current operations and needs to the provider, and give the provider the opportunity to deliver a plan back. Gain a consensus ahead of time on what the expectations are about using and managing outside vendors.

Then, seek to work together to reach a mutual agreement on exactly how things will unfold. Elements of their plan should include how the provider will manage and staff the engagement.

A qualified RPO vendor can also bring savings from vendor management and consolidation of outside firms that an organization may be using.

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Governance and Metrics

A client organization should expect a rigorous governance process for the RPO engagement. This should include the identification of executive sponsors both within the organization and the provider's organization, and a clear process for escalating issues when they do arise.

The organization and provider should collaborate to establish baseline recruiting metrics. If they don't exist, make a plan to develop metrics in the first 90 to 180 days of the engagement. A provider should be regularly reporting metrics to the steering committee and creating plans for continual improvement.

This information should also help organizations make business decisions regarding strategic questions such as issues related to hiring and compensation.

A successful RPO can create real competitive advantage for firms. Providers will be helping companies to identify the very best talent for the organization.

We have seen and led recruitment process outsourcing engagements that have resulted in measurable impact on a client's customer satisfaction through more effective techniques to predict performance. We have also seen dramatically reduced turnover through better candidate assessment and selection and, we have also been able to achieve an improvement in sales per employee with the exact same techniques.

As an HR leader, making the decision to outsource can be difficult, but if you pay attention to these factors, you could have a significant influence on the strategic direction and success of your organization.

Diane Shelgren is an executive vice president of Strategy & Client Development for Boston-based Veritude. She is responsible for Veritude's strategy, client management, sales and business development, and marketing operations. Shelgren is a recognized expert on the subject of HR outsourcing.

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