Follow these five commandments, and you won’t need divine intervention to make sure your recruitment outsourcing efforts are a heavenly experience.
It’s a religious season with Easter and Passover having just been celebrated. It is a time when much “commanding” takes place. It is also the time of year when executives at the top of the HR food chain begin to command their subordinates to outsource or investigate outsourcing for the coming year. So let us have some tongue-in-cheek fun looking at a company and telling the epic story of the “commandments” that should be observed when considering the rollout of an RPO contract.
It usually starts with someone descending from on high—an upper floor executive suite where they have met with the chief HR officer. (No, they are not divine; a few just act like they are.) They come to your office and pronounce in a booming voice, “I have been to the Summit, and I have come to tell you that you shall outsource staffing in 2009 and you will surely let our people ‘O.’” Or maybe they just drop a memo on your desk and run away before you can complain about not being consulted.
To be fair, outsourcing staffing can be a very good thing and something you have already considered. Now you have the task of running a selection process and leading your team and the hiring managers through the transition.
There are five commandments of a good process. Not everyone will agree with these, and as always, I celebrate their right to be wrong. Do these well and you will have a much smoother time.
• First Commandment: Know thy numbers. Many companies don’t keep good data, although it only takes about 90 days to get snapshot data on funnel metrics. Important ones are resume submissions to phone screens, phone screens to live interviews, interviews to offers, and offers to acceptances.
You also need comprehensive cost data. Not just agency spend and advertising, but the cost of your overall staffing operation, including fully loaded employee costs, relocation costs (often overlooked, but if you recruit more locally, you can save a lot), and costs for technology, tools, database licenses, and technology upkeep that may be in scope. If you do not know your numbers, providers will guess. If they are conservative, you overpay. If they are aggressive, they will lack the resources to perform.
• Second Commandment: Know thy scope. You need to determine early on what will be handled by the retained organization and what will be outsourced. This can be done by function—such as sourcing, screening, or administration—or by job family. Many firms use a matrix approach where they retain all responsibility, for example, for the executive level, but will outsource everything but the strategy development at lower levels. This varies by company but must be determined in advance.
• Third Commandment: Do not focus on cost per hire as a metric. It doesn’t tell you nearly enough and is far too heavily relied upon. You should focus on overall staffing costs and the ratios moving up and down based on the size of the company. You can do a lot of hiring because you have high turnover and bad quality leading to low cost per hire.
• Fourth Commandment: Do not have an arm’s-length process. This is contrary to what you may hear from advisors, but they are there to advise. It is your process. Procurement processes that are too “arm’s length” rob you of an opportunity to see if there will be a good cultural fit. You do not want to sign a three- or five-year commitment with someone with whom you have never had an unchaperoned date. Down-select to two or three firms quickly, and then spend quality time in the process with them to know which firm best fits your company.
• Fifth Commandment: Thou shalt communicate a lot. Remember, once you pick a provider, one thing you have in common with them is a client: the hiring managers. You need a communication plan to set expectations and describe processes and timelines and a schedule of meetings as part of the implementation process. This is a critical and often overlooked aspect of RPO. You need to constantly communicate with the provider, the HR partners, and the hiring managers about what is happening at each phase of implementation.
Remember to focus on the strategy and not the details. Let the provider worry about their details. Allow them to use the technology with which they are most comfortable and to design processes that accomplish your objectives, but you do not need to prescribe every step of what they do in their shop. Follow these commandments and your RPO could be a miraculous experience…or at least just very good.