Big Brother is watching–HRO users and providers beware.
As it turns out, Big Brother is watchingHRO users and providers beware.
Federal privacy law is expanding with the Security Rule under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the privacy and civil liberties procedures established under the Intelligence Reform and Terrorism Prevention Act of 2004 (IRATPA) one for electronic health information, the other for virtually all personal information that could be discovered in homeland security and anti-terrorism investigations. For HRO customers, employees, and service providers, each law will impose new obligations and safeguards.
HIPAA SECURITY RULE
The HIPAA Security Rule reinforces the Transactions Rule and the Privacy Rule, which focus on the privacy of protected health information. The HIPAA Security Rule takes effect on April 21, 2005, for all covered entities except small health plans. In the private sector, all private health plans, healthcare providers, and healthcare clearinghouses must assure their customers that the integrity, confidentiality, and availability of electronic health information that they collect, maintain, use, or transmit will be protected. The goal is to ensure the integrity and confidentiality of the information and to protect against any reasonably anticipated threat or hazards to security or integrity of the information and unauthorized use or disclosure of the information. The HIPAA Security Rule will be an additional compliance requirement for HRO deals. There is no specific federal security standard, but only one that adopts reasonable and appropriate precautions. The enterprise customer cannot simply dump the HIPAA compliance obligation upon the service provider. As a best practice, HRO customers and their providers should review the design and implementation of the processes involved in compliance, and establish periodic reviews to deal with changes that might be needed. The costs of such periodic changes should be discussed as well.
PRIVACY AND CIVIL LIBERTIES
Under IRATPA, executive departments and agencies must appoint a bevy of new privacy and civil liberties officers to protect against abuses of constitutional and statutory rights. Within the National Intelligence Department, a Civil Liberties Protection Officer, reporting directly to the Director of National Intelligence, will be appointed to meet constitutional, technological, and statutory mandates. To protect constitutional freedoms, this officer will be responsible for compliance, review, and assessment of complaints and other information indicating possible abuses of civil liberties and privacy in the administration of national intelligence programs. As a counterbalance to the increasing centralization of powers in the war on terrorism, a Privacy and Civil Liberties Oversight Board will be established within the Executive Office of the President as part of an enhanced system of checks and balances to protect the precious liberties that are vital to our way of life. In addition, Congress recommended each executive department or federal agency with law enforcement or anti-terrorism functions designate a privacy and civil liberties officer.
PRIVATE SECURITY OFFICERS
In the private sector, enterprises that either hire their own private security officers or rely upon service providers to do so will now be subject to new regulation. A private security officer is an individual other than an employee of a Federal, State, or local government, whose primary duty is to perform security services, full or part time, for consideration, whether armed or unarmed and in uniform or plain clothes. IRATPA authorizes prospective employers, after getting written consent from the prospective employee, to submit fingerprints for an authorized criminal history record information check for prospective private security officers. The employer must disclose the results to the prospective employee.
CRIMINAL HISTORY CHECKS
The new law opens the door to new regulation of access to criminal records in support of lawful employment beyond private security officers. The IRATPA law calls on the Attorney General to recommend to Congress any legislative improvements for the conduct of criminal history record checks for non-criminal justice purposes. As part of this process, commercially available databases will be reviewed as possible supplements to government records. Privacy rights will need further consideration, based on principles of employee consent, access to the records used if employment was denied, the disposition of fingerprint submissions after records are searched, an appeal mechanism, and penalties for misuse of the information. Employerswhether or not they outsource any HR administrative functionshould review and update their employee handbooks and the rules applicable to third parties having access to HR information.
The top recruitment process outsourcing companies.
When we started pulling together the first-ever HRO Today list of the Top 13 Recruitment Process Outsourcing (RPO) providers, we thought the challenge would be in gathering the data. The true challenge, we discovered, was defining what data to gather. What services make up a true, end-to-end RPO offering? What is the difference between an RPO provider and a staffing or placement company that serves as the primary recruiting arm for a client? In pulling together this special section on recruitment and RPOs, we surveyed 17 major providers in the staffing/RPO field and their clientsin-house HR executives who bought their services. Heres what we discovered.
RPO IS STILL LARGELY UNDEFINED: DOES SCOPE MATTER MORE THAN VOLUME?
One of the most common constructive comments (i.e., criticisms) of the industry as a whole is that RPO is still not clearly defined. There are two schools of thought. For the first school, providers and buyers alike, RPO is defined by the volume of recruiting services a provider does for a company, rather than the type of the placements. If a provider is handling the majority of the recruitment and placement for your company (volume), then they consider that the recruitment process is, in effect, outsourced.
For the second school, RPO is a scope-based identifiersignifying the number and variety of recruitment services a provider offers: Do they source candidates, plus screen, plus handle initial interviews, plus work with hiring managers on job descriptions and needs, plus consult on job offers and on-boarding? In the volume versus scope argument, HRO Today counts itself among the disciples of scope. In identifying which are the true RPO providers, scope (quality) matters more than volume (quantity).
IF SCOPE COUNTS MORE, QUALITY COUNTS MOST
Pinning down the rapidly evolving RPO market is a challengeas both buyers and providers struggle with definitions of what recruitment entails. But a common theme among all respondents was that quality counts. Again, the definition of quality varied: to some, it meant improving the speed and cost of the recruitment function; to others, it meant offering a larger variety of services and more variety in sourcing. But all agreed that RPO should improve time to hire, increase the quality of the candidate pool, and improve EEO compliance. And as youll see in our RPO Users Weigh In section on page 32, quality was ranked as the most important requirement for an RPO provider.
RECRUITMENT AND RPO ARE TOP PRIORITIES
Another interesting result of the survey was that despite the current jobless recovery, HR departments are worrying about upcoming labor shortages and the impact that will have on their recruitment function. Almost 75 percent of in-house HR managers surveyed reported that they were extremely or somewhat worried about the projected skilled-labor shortage for the United States. For those taking the survey, RPO is expected to partially solve this problem.
THE HOW TOs OF RPO
For help in defining RPO, identifying criteria for providers, and for some advice on making the transition to outsourced recruitment, we contacted the newly forming RPO Association (RPOA). The RPOA is in the process of being founded by providers and HR consultants in order to educate the market on RPO and establish common metrics and comparative information for RPO. Check out the sidebar Is Your RPO Provider Really Providing All You Need? to see their preliminary list of criteria for RPO providers. For more information on RPOA certification and updates to their mission statements and guidelines, visit www.rpoassociation.org.
REQUIRED READING FOR RECRUITMENT AND RPO RANKINGS
So as you dive into our special recruitment and staffing feature, remember that like many of the people who have already taken the RPO plunge, one size may not fit all. Thats why this special section is set up to provide you with a variety of resources: a broad listing of recruitment and staffing providers (Recruitment Resource Guide); a more in-depth listing of providers specializing in RPO (The Lucky Thirteen); and feedback from in-house HR who have gone the RPO route (RPO Users Weigh In).
As the jobless recovery finally drops the less, companies are looking for new approaches to recruitment.
In the 1956 William Whyte Jr. classic The Organization Man, there was only one way to work: for the same company, forever. By 1991, when Paul Leinberger and Bruce Tucker wrote The New Individualists: The Generation After The Organization Man, the model had changed: rapidly changing markets forced individuals to have several careers over a lifetime. And by the time Bruce Tulgan wrote Winning The Talent Wars in 2001, labor markets had become, in his words, hightech, high-speed, knowledge-based and superfluid. Tulgan exhorted us to staff the work, not the jobs, create as many career paths as you have people, and, above all, outsource recruiting. If we ignore Tulgans advice, we do so at our own peril.
Re-engineering recruiting has been a corporate and government obsession since America got its first whiff of staffing shortages during the dot-com days. Employers had a temporary reprieve from the manpower drought during the most recent recession. But now the war for talent is rearing its ugly head again. And with the population leveling out and the economy continuing to expand, there is no end to the talent shortfalls in sight. Get ready for staffing scarcity for the rest of your HR career.
So how can an HR manager find good people in a rapidly changing market when the nature of the work and jobs are rapidly changing too? This issue of HRO Today focuses on the HRO response to this market phenomenon: recruitment process outsourcing, or RPO. At the April 2004 HRO World Conference, there were dozens of exhibiting companies with RPO solutions. Five different speakers talked about their experience. Kelloggs Cydney Kilduff, an outspoken booster of the RPO phenomenon, talked about how she partners with her provider to gain the bandwidth necessary to manage the changing nature of her work needs while filling the jobs.
But what is RPO? Isnt it just another one of our acronym-obsessed magazine labels for the same old thing? While we admit that we have a certain tendency to create an acronym for everything (anyone for a QLBQuick Lunch Break?), we insist that RPO is the new flavor of recruiting. Face facts, folks. In order to get the work done that needs to be done, you will continue to need people. But the job of recruiting is simply moving too fast to handle it all in-house. Dont try this at home; this is a job for professionals.
The technology and breadth of job-market coverage required today to handle the recruiting task is simply amazing. HRO Today has spoken with two multinational organizations (covering 500 geographic job markets) that have each catalogued more than 12,000 different types of worka number that is increasing by a rate of 1,000 per yearrequiring 10,000 different types of employee skillsets. To handle the recruiting needs of either of these organizations in-house would require a team of recruiters larger than most national armies. Consider the extreme case of the Transportation Security Administration (TSA). They had to hire 67,000 people in 9 months to be deployed in 429 airports at 1,750 departure points. Only by striking a comprehensive RPO partnership with CPS and Accenture HR Services, could the TSA have had a prayer of completing its mission.
RPO is a continuum of work-definition and jobfilling services that goes beyond the traditional filla- spec recruiting service. At the front end, it is helping define the work needs, translating those needs into requests for jobs, and designing a career path for each individual (a departure from the one-career-pathfits- all model). On the market side, RPO helps establish market rates for labor, market-by-market (a change from the employer-set wage rate model). In filling jobs, RPO goes beyond the traditional screen-and-pass-along model to psychological profiling and behavior-based interviewing methodologies. And in keeping jobs filled, RPO includes retention, reassignment, and replacementa step usually skipped by traditional recruiting firms.
RPO is the future of recruiting and staffing and an essential building block in any organizations HRO strategy. We are happy to feature it in this issue of HRO Today.
The first-hand pros and cons of recruitment process outsourcing.
We asked clients of RPO providers (Managers, Directors, and VPs of HR for a variety of companies) to tell us what they look for in a provider, and what they see as current recruitment trends. Here are their responses:
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