New research finds the role of recruitment process outsourcing providers continues to expand—and deliver.NelsonHall has recently published its seventh Global RPO Market Analysis. The research finds five main reasons why clients are continuing to outsource their recruitment processes:
• Scalability and agility to meet business demands;
• Improving talent acquisition performance results, primarily quality of hire;
• Need for transformation requiring updated tools and processes; and
• Broader talent management and strategy consulting capability.
The ability to meet business demands for growth is the top driver for RPO, according to the study. Cost is still a consideration, especially for first-generation buyers, but the ability to scale up to meet hiring demands required to support business growth has become the biggest challenge. Internal talent acquisition teams need resources and expertise to support:
• Growth due to a stronger economy, including an increased demand for specialized, hard-to-fill positions;
• Global expansion, including establishing a new presence in a new country or opening regional shared service centers;
• Seasonal hiring; and
• Corporate initiatives such as mergers, acquisitions, and spin-offs.
Organizations are also leaning on RPO to improve talent acquisition performance results, especially for increasing quality of hire. The goal of talent acquisition is to deliver candidates with the right skills who are a good cultural fit within an organization, have increased engagement and greater productivity, are less likely to leave for other employment, and support the organization to meet business goals. RPO providers are expected to be able to deliver quality candidates that internal talent acquisition leaders cannot easily find on their own. Other important performance measurements include hiring manager satisfaction and candidate satisfaction.
Cost will always be an important driver for RPO. Hard dollar cost savings such as reducing agency spend is still a primary goal for first-generation buyers. Cost containment and control is important for all buyers, but more experienced buyers are shifting focus to more soft and strategic dollar value considerations such as retention rate improvement, improved time to fill, and improved time to productivity. RPO providers are increasingly getting involved at the front end of RPO programs to assist companies with business case development.
HR strategy and HR transformation initiatives are driving some RPO engagements including:
• Global business services strategy projects requiring establishment of shared services centers in multiple regions;
• Compliance improvement mandates covering diversity, ethnicity, and veteran requirements, and OFCCP compliance in the U.S.; and
• Broader process standardization requirements.
Access to improved technology, reporting, and analytics are also driving RPO activity. Outsourced talent acquisition specialists are expanding their consulting capabilities. Today’s providers are more involved at the beginning of engagements to help define talent acquisition strategy rather than just being called on to hire a certain number of employees. Organizations are looking to RPO providers for:
• Employer brand development;
• Candidate engagement strategy and marketing;
• Specialized recruiting targeting diversity, disabled, and military and veteran candidates;
• Workforce planning including integrated talent planning that incorporates permanent and contingent hires; and
• Broader talent management expertise such as ongoing performance management, training, and development.
RPO providers are becoming talent advisors to their clients and providing broader talent management consulting.
Two Case Studies
When a leading health insurance provider with operations in Arkansas was awarded a large piece of business with a major national retailer, the organization teamed with KellyOCG for SME consultation. The company was seeking an innovative pricing model, targeted sourcing, project management, and cost savings. As part of servicing this contract, the client needed to quickly establish a new contact center operation, staffed with a reliable pool of case manager nurses and experienced supervisors. The company asked KellyOCG to consult and recommend an optimal place to establish the business, where a reliable supply of local case manager nurses would be available within a targeted salary range to help maintain the project’s budget. KellyOCG had less than 30 days to implement a program that included research, design, development, and candidate sourcing for the project. The contact center operations would ultimately require a staff of approximately 55 case manager nurses and three supervisors—all interviewed, hired, and ready to work within 90 days. Efficiencies in the KellyOCG centralized recruitment process and candidate preparation drove quality sourcing, demonstrated by a two-to-one ratio of interviews to hires. Nursing positions were filled in half the average time, and contact center turnover reduced
Allegis Global Solutions
For a global healthcare group focusing on products and services for hospital and medical home care, the organization was challenged to centralize hiring processes and improve efficiencies across 2,000 clinics in the United States. Allegis Global Solutions (AGS) was originally contracted for a three-month term to fill 750 positions in one region. AGS maximized productivity by structuring recruiters regionally, including onsite in some locations, and became an extension of the client’s internal talent acquisition team. Effective sourcing strategies used by the AGS recruiting team included social communities and both active and passive talent pools. AGS exceeded the original goal by hiring 980 candidates. The client expanded scope and asked AGS to fill 9,000 permanent hires in one year at additional clinics across the U.S. In less than one year, AGS exceeded the hiring goal by nearly 3,000. Additional results included reduced time-to-fill by 48 percent, reduced open requisitions by nearly 60 percent, and reduced number of open positions by nearly 30 percent.
Today’s top five RPO drivers appear to be interrelated: Meeting business needs requires the best available talent for the job, in the timeframe given, at the best possible cost (certainly lower than what organizations can do internally. Executing this requires the best up-to-date tools and processes, as well as a partner with the proper resources to help develop an overall talent management strategy.
RPO providers are expected to be able to deliver quality candidates that internal talent acquisition leaders cannot easily find on their own.