The proper partnership model can optimize RPO engagements.
By Jenifer Kihm
Regardless of the role you hold within your organization, you undoubtedly want the best and brightest colleagues at your side as you work within and across functions. That’s the only way you can collectively grow the business, wow the customer, and beat the competition. You expect each functional area within your organization to be staffed by the most knowledgeable and skilled workers in that function relative to peers in other functions (e.g., you expect your finance and accounting team to consist of the best financial minds in the company and your marketing team to be the most sophisticated marketers in the company). You value their knowledge and their participation on teams, and they respond in kind by respecting your role and your contribution. You divide and conquer, and the whole organization is truly greater than the sum of its parts.
With that collegial collaboration in mind, think about your relationship with your recruitment process outsourcing (RPO) provider’s team members who recruit for your organization. Do you engage as a colleague or as a client? There is a difference.
Colleagues work together to optimize results. There is joint accountability, and the members of no one functional area can truly claim they are the sole or most important stewards of the business. The business cannot be optimized without each team or business unit performing its role and having everyone committed, excited, and engaged as “card-carrying members” of the organization.
Clients and service providers, on the other hand, transact with clear boundaries—and with hand-offs and typically rigid methods, systems, and contract terms. Very positive and collaborative supplier-buyer partnerships certainly exist, but their underlying engagement is different from that of internal colleagues working together.
This distinction is especially important to RPO. Depending on the scope of the RPO engagement, an RPO provider might be a subset of the overall talent acquisition function for an organization or the entire talent acquisition function. Regardless, hiring managers are, by definition, colleagues of your RPO recruiters and account team, not clients. This is due to the nature of an RPO engagement being unlike other outsourced HR functions.
The RPO team and hiring managers must work together throughout each “hiring event” in order to complete it. The recruiter cannot complete the hiring event on his own, and the hiring manager cannot either—without recruiting himself, which defeats the point of having a talent acquisition function.
What does a colleague-based RPO engagement look like, and what are the hallmark characteristics that differentiate it from a client-based RPO engagement?
Start with partnership terminology.
Colleague Model: The terms “we” and “they” are not used when discussing the recruiters, HR, and hiring managers. Ever. There is one team.
Client Model: The terms “we” and “they” are common when referring to the parties involved in the talent acquisition function. This can lead to taking sides, blaming, or winners and losers in the engagement.
Next, consider the recruiter role.
Colleague Model: Here, recruiters believe they are experts in their role in the hiring event. They feel compelled and welcome to share high quality, properly supported (data-driven), labor market information. That might include the intensity of the current competition for talent, market-rate salaries, and candidate opt-out rationale. Their job goal as they see it: to optimize the hiring outcome.
Client Model: Here, recruiters feel like order-takers. They document the job, the requirements, and salary, and they then work (often in isolation) to deliver candidates to the manager. That is the totality of their job goal.
Now come contracts and fees.
Colleague Model: The recruiting process is continually optimized for the business as it and the labor market evolves. The contract and payment terms allow the RPO partner to make changes (e.g., to use new process and tools, change out recruiters) without excessive scrutiny and approval. This is because they are trusted and sustainably profitable with respect to the account. They are willing, able, and do make investments that optimize the account in real time.
Client Model: The RPO team’s performance is reviewed quarterly through a standard scorecard lens and is vetted by the HR and procurement/sourcing team within the business. Additionally, the fee structure is designed to keep RPO margins lean, such that any meaningful improvement to the process used will require a price adjustment or put the RPO provider in an unsustainable position.
The hiring manager’s role is also affected by which model is in play.
Colleague Model: The hiring manager understands that hiring today requires complete, thoughtful, and timely participation, especially for positions requiring highly skilled workers. The manager and recruiter speak regularly and make necessary modifications to strategy, criteria, and even the job, based on labor market conditions. The manager considers the recruiter his colleague in the effort to get the best talent for the salary dollars available and in the shortest amount of time.
Client Model: The hiring manager sees the recruiter as a service worker who has been contracted to deliver candidates with his pre-set specifications and who will accept his pre-set salary level. He wants candidate resumes quickly and electronically. He is not willing to modify the job or the pay and is willing to engage other recruiting services simultaneously.
Engaging in a colleague model is most likely to optimize the RPO-based talent acquisition outcomes. This is because the asset being acquired is a person, making each hiring event, or transaction, unique. An employee simply cannot be acquired like other standardized products or services. Steps and stages in the hiring process for both the recruiter and the hiring manager can and should be standardized, but human nuance is always in play. When the hiring manager and recruiter work as colleagues, they are able to follow the fundamental process, but the optimal event allows for necessary adjustments.
Consider the following scenario: A recruiter and hiring manager begin to work together to hire an application development specialist in Tampa. The recruiter quickly learns the competition is fierce and the target salary is mid-range, but the skills and experience desired by the hiring manager are top-end.
In the client-based engagement model, the recruiter “takes the order” and works to the best of her ability, using sourcing tools and protocols that are pre-established as part of the contractual deliverables. She passes through candidates who best meet the manager’s needs and whose salary requirements are in range. The hiring event that begins in this manner can quickly become challenging. The candidate resumes trickle in via email, and many are not optimal: Some competitors are paying significantly higher salaries, and the best-qualified candidates are choosing those opportunities.
The hiring manager gets frustrated with the quality of candidates based on resumes alone, not having spoken to the recruiter, and believes the recruiter does not understand the assignment or is simply not a good recruiter. Frustration is escalated to the “owners” of the RPO relationship within the client organization, and the owners’ (aka buyers’) response is to demand better service from the RPO supplier, referencing service level agreement (SLA) and key performance indicator (KPI) standards in the contract. No discussion ensues on how to navigate the uniqueness of this particular hiring event—tight competition, escalating market salaries, and misaligned salary and skills requirements. There is lack of acknowledgment that the client might be off base, because of the “client is always right” perspective.
In the colleague-based engagement model, the recruiter sources all viable candidates, tracks opt-out candidates’ rationales, and uses supplemental sourcing tools (the fee structure for the RPO allows for cost-increasing, supplemental resources when necessary). Armed with documented market information, the recruiter meets with the hiring manager and shares her findings. She explains the situation: a) 400 open positions in the Tampa market have skill requirements similar to the hiring manager’s open position; b) the candidates she is finding who are well-aligned with the manager’s expectations are considering positions that are paying $20,000 more than she is offering, and they are getting offers very quickly; c) she has already used some advanced recruiting methods and added sourcing horsepower to her efforts; but, d) even so, the results are not optimal.
However, she has some ideas. This launches a business discussion with the hiring manager on strategies to move through to successful completion. They begin to look at remote workers outside of Tampa who are more readily available and within the salary range; and they discuss the option to find more salary dollars in the hiring manager’s budget, to reduce skills requirements, or a combination of both. They work together, because they have the same goal—to optimize the hire. The recruiter reviews additional ways to find talent (e.g., other tools, other markets), and the hiring manager reconsiders her department needs and resources. There is no easy answer, but by working together they will move to the best possible outcome as quickly as possible. The hiring manager respects the recruiter’s work, and the recruiter understands the manager’s needs, resources, and urgency, offering options for consideration. It’s about working smarter, because they are already working hard.
The Return on Collegiality
What are the benefits of the colleague-based model? There are several:
1. Lower overall hiring costs. This might seem counterintuitive, because the contractually established fee for service might be higher with the colleague-based model than client-based RPO pricing arrangements. However, properly constructed, the fee agreement allows the RPO partner to staff your account with the best recruiters, good tools, and the ability to augment further on those positions that require it. That means that the overall account remains healthy for the RPO, and hence, the candidate quality and hiring speed meet the collective hiring managers’ needs. It’s a win-win, a sustainable arrangement that can result in greatly reducing the need to use boutique recruiting services where fees are often four to five times higher than RPO costs. Eliminating only a few boutique agency fees can reduce the overall cost-per-hire even with potentially higher RPO pricing for the more robust colleague-based recruiting activity.
2. Happier hiring managers. Hiring managers want to build the best teams possible. When they trust their recruiters, interact as colleagues, and have confidence that their recruiter has done the best work possible to help them build their teams, they make decisions quickly and without second-guessing. This model optimizes quality and speed.
3. Better employer brand. A colleague-based model means hiring managers and recruiters are working together with respect and trust. Partnerships that are not lopsided in power typically result in faster responses by hiring managers, meaning candidates are vetted more quickly, and information flow among candidates, recruiter and hiring manager is fast. One of the biggest contributors to favorable views among candidates, even those not hired, is their knowledge of where they are in the process. Without tight and timely collaboration by the recruiter and hiring manager, recruiters often have to use stall tactics and invest valuable recruiting time to keep potential candidates “warm.”
Candidates typically do not view being placed in a holding pattern favorably. They begin to question the true value of the position they are considering or the hiring manager’s decision-making capabilities. The longer the candidate waits, the less favorable the employer brand is likely to be.
If your organization is considering establishing an RPO engagement or currently uses RPO services, consider whether you are interacting as a client or a colleague. Only when your hiring managers and RPO recruiters genuinely feel that they have the same goals and engage one another professionally and with respect will your hiring outcomes be optimized and your partnerships stable. Keep in mind that your RPO provider is performing a function that your internal colleagues or team would need to perform if the RPO were not engaged, and, hence, should hold the same status as co-workers or the internal function. RPO providers can bring a wealth of knowledge gleaned from their complete account base. They can also bring the expansive tool sets and expertise not available to most internal recruiting functions or boutique agencies—if your partnership is designed correctly and is sustainable for both organizations.
Jenifer Kihm is managing director of Operant.