This Hire for Hire

Between college and graduate school, I was employed at a small headhunting firm in Connecticut. The business counted four principals, a couple of senior staffers, and yours truly as gopher. Besides making runs to the dry cleaners and deli for coffee (this was during the pre-Starbucks days, also known as the Pleistocene Era), I was charged with making cold calls into companies to try to find the assistant director of marketing or the deputy procurement officer in charge of supply chain management. I was to pose as an industry analyst and ask a series of questions nominally surveying developments in the given industry sector, but actually designed to assess that target’s qualifications for, and willingness to discuss, our client’s job opening.
 
This was during the early ’80s. So my equipment? A land line, plus pencil and paper. No computer—never mind a database or the internet, much less ZoomInfo, AIRS, TalenHook or list bots and spiders. Suffice it to say that the process was slow going.
Fast forward to this December, a ballroom at the MGM Grand in Vegas, and the PowerPoint presentation given by the CEO and Director of Research from SharedXpertise, our parent company. The subject: Recruitment Process Outsourcing. My jaw: dropped.
 
I had recently read this posting, by Sona Sharma, with Staffing Industry Analysts.
“Maybe buyers are not so comfortable about outsourcing their overall hiring function?” she asked rhetorically. “It’s still a nascent market, and as buyers are not in a mood to hire anyway, it is hard to grow in such circumstances. Maybe I should hold off judgment and give RPO another year or two to see how it evolves.”
 
Although we have partnered with SIA in the past, I knew this posting was wrongheaded. Sure, RPO is not as mature as, say, payroll outsourcing, but the RPO market is now many years old and quite robust—variably estimated at $800 million to three times that amount, depending on your definitions. That ain’t “nascent.”
 
Still, I was not quite ready for the findings of a recent survey of hundreds of RPO buyers that was conducted by my colleagues. Who, for example, are RPO’s buyers? Mid-size shops that can’t afford their own recruiting operation? Hardly. The vast majority are large-cap firms, with 14 percent sitting on at least $50 billion, 18 percent counting $11-to-$50 billion, and a whopping plurality of 40 percent capitalized between $1 billion and $10 billion.
 
Some other numbers were of note. Among providers, some 69 percent recruit for clients in multiple languages. Yes, 52 percent of engagements are specialized, entailing position counts south of 500, but 33 percent involve hires totaling between 500 and 2,500. As for service penetration, consider this: Between 2008 and 2009, the percentage of respondents showing the provider handling greater than three-quarters of non-exempt hiring rose from 48 percent to 53 percent, and the same figure among exempt hires leapt from 44 percent to 57 percent. During the same period, HR executives revealed their trust in RPO by increasing contact between provider team members and line staff from 59 percent to 78 percent. Multi-year engagements? Up from 67 percent to 86 percent. At least one renewal with current provider? Up from 51 percent to 69 percent. And even in our crushed economy, buyers affirming that providers “improved our staffing function” rose from 86 percent to 91 percent.
 
Or take a look at our RPO Baker’s Dozen from the July/August issue. The 13 providers reported that they processed or managed an aggregate of more than 990,000 hires in the preceding year. To get an even clearer view of what’s happening on the ground, you can read in our cover story this month about MedImmune, a client of the winner of that ranking, The RightThing. You can also get a broader view of the growing global RPO market in my colleague Debbie Bolla’s trend story.
 
Nascent? If this is nascent, I want to go back to my days of webless pencil pushing, because then I was a neophyte. Which means I’d be worth zillions.  
 
Dirk Olin is Vice President and Editorial Director of SharedXpertise.