Midsize companies are leveraging the value of RPO one service at a time.
By Katie Kuehner-Hebert
While many midsized companies would like to centralize their recruitment operations to facilitate enterprise-wide outsourcing, most are “not there yet,” according to both recruitment process outsourcing (RPO) providers and buyers alike.
Many midsized companies—particularly in the weak economy—are having a tough time selling their C-suite on outsourcing the entire recruitment process. So they are using RPO solutions primarily for specific tasks such as assessments, screening, or onboarding. On the global front, operations formed through acquisitions are leveraging RPO for specific divisions or projects as they slowly integrate their varied siloed business units.
Seeing some growth is the small business sector. An increasing number of these types of organizations are starting to consider RPO solutions in order to save costs by restructuring their recruitment functions.
Social media strategies are a newer sought-after offering, a result of the channels explosion in recent years. RPO providers help deploy social media strategies to enhance employment brands. The bottom line: Organizations are now more than ever acutely concerned about delivering the best candidate experiences since social media provides an outlet for jobseekers to tell the good, the bad, and the ugly.
More RPO providers are specializing in certain services, such as assessment, sourcing or onboarding, as more midsized companies are only outsourcing pieces of their recruitment program, says Margot King, vice president for recruiting solutions at ZeroChaos.
“It’s a big step to offload all of their recruiting functions, particularly when some of their internal processes work quite well,” notes King. “It’s an easier sell within an organization that has a centralized platform, rather than a very siloed company.”
While the prevailing “mood” of buyers is to centralize, a lot of firms are taking their time to build a business case internally, she says. “They are looking at the change management that needs to take place when they do an RPO, because there’s going to be major resistance.”
One of ZeroChaos’s clients, Faurecia, a global automotive equipment supplier headquartered in Nanterre, France, currently uses the RPO provider on a project-by-project basis, says Nathaniel Conn, the company’s talent sourcing manager. However, Conn says that ideally he would prefer that his company outsource all of its recruitment processes.
“From my perspective, RPO can be very valuable in terms of process management, visibility to the level of spend and efficiency, and in some cases significant cost savings,” he says. “But we don’t have a centralized recruiting model. It would be easier to do an RPO if we layered things under the control of one organization, whereas right now we operate as four separate divisions that are decentralized, so this concept is a ways away.”
SABIC, a global manufacturer of chemicals, fertilizers, plastics, and metals based in Riyadh, Saudi Arabia, organizes its recruitment functions separately within its three regions—the Middle East, Asia, and the Americas— says Patrick Reuss, recruiting and staffing leader for North and South America. Reuss contracts with Yoh for RPO services.
“The ideal would be to have this in-house, but what we’re looking for in an RPO is to be able to increase capability in time-to-fill, quality of hire, and source of hire—managing the outsourcing pipeline,” Reuss says. “Helping to find the type of skilled talent that we need, where and how we can find them, whether its from our competitors or organizations that are similar to what we do.”
SABIC’s global structure requires that its outsourcing partners have a “very high level of engagement” with the firm, and as such, Yoh’s team members are either located on SABIC’s premises or very close by, he says. That way, the RPO provider can more thoroughly understand the nuances of SABIC’s recruitment strategy and more quickly adapt to any changes.
“If we’re going to put a demarcation in the sand and execute, we need to have a type of solution that is very turnkey and supports what we do,” Reuss says. “If I constantly have to write checks for investments in those types of tools, what’s the point of making the investment? I can go in-house to do that. RPOs in general have to develop very strong partnerships, they need to have a level of pride, visibility, transparency, and the type of information to be able to make concrete types of decisions.”
SABIC also prefers RPO solutions that are metric-driven, Reuss says. To be most effective, communication is key.
“If we don’t position the RPO to be successful—sharing information, expectations, setting up that service to be successful—then it’s a recipe for disaster,” he explains. “The intent of the RPO solution becomes somewhat unclear to the executive leaders who pay out of their budget.”
Yoh Vice President Joel Capperella says that many companies are seeking “on-demand” services as the economy continues to sputter along.“Given the consistent ups and downs of the economy, there is still plenty of uncertainty,” Capperella explains. “But companies want to have the infrastructure in place. So the big trend is getting us to set up infrastructure so they can be ready when they have their next big hiring push.”
Tasks are both administrative and strategic, including creating or managing the expense of job boards, negotiating contracts, developing or improving the onboarding process, and determining the analysis of past performance metrics—“all of the traditional elements in an RPO, just placing it ahead of demand,” he says.
Start-ups and small companies are starting to get in the game and look to RPOs to build from the ground up. RPO solutions can help establish their infrastructure, “because they have nothing,” says Dave Campeas, president and chief executive officer of PrincetonOne.
“Obtaining credit is a lot more difficult now than it was five years ago—the ability to get funding has changed tremendously and companies have to be very judicious about the funding they do have,” Campeas says. “Whatever we can do to help them not make capital expenditures, makes their balance sheets stronger and gets them up and running faster.”
Joseph Lyons, former executive at Sunovion Pharmaceuticals, worked with PrincetonOne to set up and manage the entire recruitment process when the company needed to ramp up its sales force after drug launches. Now a director of staffing for Vertex Pharmaceuticals, Lyons says he would turn to PrincetonOne again for hiring surges in the future.
“RPO providers definitely play a big role, especially if you’re going to do a national recruitment campaign,” he notes. “They can be very cost-effective for organizations because they know the country, they know the industry, they’re able to negotiate contracts well, and they’re able to fill our pipeline fairly quickly.”
Michelle Gillin, a vice president at PrincetonOne, says that clients of all sizes are also looking for the RPO provider to improve their internal processes.
“In many cases, clients have made these huge investments in their systems, but they haven’t been utilizing them to the full extent,” she explains. “So we figure out best practices so they can ultimately still run the systems. They did this because of the recession—they have this system, so they really should use it.”
Faurecia’s Conn says his firm uses both ZeroChaos’s hiring assessment tools, which are becoming much more sophisticated to enable recruiters to customize according to positions and competency requirements.
“These tools help take some of that ‘gut feeling’ out of it,” he says. “We can make hires based upon more data than we used to in the past.”
Social Media’s Power
Paul Harty, president of Seven Step RPO in Boston, says the candidate experience within the recruitment process is now of utmost importance to clients—thanks to the viral nature of social media.
“Social media has really shaped the C-suite to pay attention to candidate experience. Good or bad, it can become very public, very quickly,” he says. “Years ago, there was less of a concern about that. There was an attitude that if a candidate isn’t willing to wait for our process, then they’re probably not the right candidate for us. But that attitude has really changed and the candidate population now has a much stronger voice.”
Seven Step, like other RPO providers, manages social media campaigns for its clients. The key is to proactively interact with the candidates, Harty says, by posting articles or blogs that center around the interests of that talent community, or are related to their specific profession. In time, clients can trickle in postings about their organizations.
Seven Step assigns staff to manage traffic on those sites, as well as measure and analyze data on specific candidates, and the effectiveness of the campaign.
“You can’t just set and forget it if you’re going to set up a talent community on LinkedIn, which is a common thing to do,” he says. “You can’t set it up and have people join and then not interact with those people regularly. If candidates don’t feel that they’re getting any value, they will have a negative view of that.”
Having a voice on social media can attract talent that may not be actively looking for a new role, says SABIC’s Reuss. “[Yoh] helps us to determine the best way to build awareness of our employment brand for the passive job seeker.”
Indeed, employment brand enhancement through social media is one of the hottest topics among today’s buyers.
“Branding in the past was mostly about the look and feel of how the client was advertising to their clients in the marketplace,” Yoh’s Capperella explains. “But now we’re tapping into the talent community, so we want to establish stories, or the history of the client’s entire employment life cycle—how employees are hired, onboarded, how their careers have progressed, and how they’re treated as alumni. We’re helping clients create a foundation for this narrative, which will then drive content production that we use to engage the candidate marketplace.”
Vertex’s Lyons says social media campaigns help organizations better fill their talent pipelines especially when they have no current jobs to fill.
“It’s good to get people interested, so when we do have an opening we can reach out to them,” Lyons says. “If they don’t want to come, they may know someone else. This saves us from having to hire an agency, or having to go out and continue to source. Having a pipeline helps us to be more proactive.”
PrincetonOne’s Gillan says her firm conducts surveys with candidates on how they perceive their client’s organization. The results provide a direction that companies can then use to help shape their employment brand.
“We protect their brand as well,” says PrincetonOne’s Campeas. “A client can have tens of thousands of candidates go through the process and only a fraction get a job. But every person is informed as they move forward through the process, because that’s critical. We don’t want anyone to fall into a black hole after an interview or touch point.”
Happy Candidates Make Happy Employees
“Social media does a nice job attracting applicants to job boards, but what happens once they get into the system?” asks Jerome Gerber, vice president of client solutions at Volt Workforce Solutions. “The experience they have within that and the continuous contact is probably the most critical trend that impacts the client’s brand.”
Ten years ago before the advent of applicant tracking systems, getting a good job was more about who you knew, Gerber says. “Now with automation, we’re taking the human element out of the talent acquisition process, but you can’t take people out of the people business.”
What Gerber sees is clients trying to establish some sense of community between themselves and their applicants.
“How do you create a sense of community so that they’ll come back to the organization in a more advanced position as they continue on their career growth path, or recommend the organization to friends and family?”