By assigning numeric values to RPO deals, buyers can more accurately sync their needs to the capabilities of service providers.
Depending on who you ask, the acronym RPO can stand for everything from a classical music group in upstate New York to the offshore shipping of recyclable computer components (Rochester Philharmonic Orchestra and Rubbish Processing Outsourcing, respectively). Even in its most commonly used form (Recruitment Process Outsourcing), there isn’t an agreed-upon definition for what constitutes RPO.
An online search for recruitment process outsourcing brings up hits for companies offering everything from multi-year, enterprise-wide, total recruitment outsourcing to those providing just executive search, online resume mining, contingent worker solutions, and more. With a broad range of companies describing their offering as RPO, the market is a confusing place for buyers.
Let me propose that there is no single definition of RPO and that it comes in a number of shapes, sizes, colors, and flavors. Rather than pinning a specific, limiting definition on RPO, we should instead focus on defining what types of RPO are available, thereby making it easier for buyers and providers to understand each other’s needs and offerings so that appropriate matches can be found quickly and efficiently. In the same way that diamonds can be described based on the four C’s (cut, clarity, color, carat), I propose that RPO providers and programs be classified on the “SSRD”scale: size, scope, reach, and duration.
1) Size (Si) describes the number of employees at the client company buying the outsourcing program. Companies can be rated from 1 to 10, with 1 representing the smallest and a 10 representing a Fortune 500 enterprise.
2) Scope (Sc) represents how much of the recruitment process is considered in-scope for the outsourcing program. Scope might also be rated on a 10-point scale, with 1 representing a single step in the recruitment process and 10 presenting a totally outsourced process.
3) Reach (R) represents the percentage of new hires handled by the outsourcer (how deeply the outsourcing reaches into the total population of new hires). Reach can be represented by a percentage.
4) Duration (D) describes the length of the outsourcing engagement. It can be described on a 10-point scale with 1 representing an engagement of one month or less, 2 representing two to three months, and so forth, up to 10, which represents five years or longer.
Under this system, the following scenarios are described:
*A seven-year, total outsourcing program for a Fortune 500 company would be rated as Si-10, Sc-10, R-100, D-10.
*A three-month, totally outsourced sales force rampup for a Fortune 500 company would be rated as Si-10, Sc-10, R-5, D-2
*A five-year program to outsource just resume sourcing for all positions within a 5,000 employee company would be Si-5, Sc-1, R-100, D-10.
A standardized description system like the SSRD model benefits both buyers and providers by clarifying the terms we use in describing RPO programs. For example, this system makes it easier to identify providers with experience matching the buyer’s requirements. Rather than asking a provider if they have provided similar programs, buyers can request more specific data. In this emerging industry, with different types of providers and clients with significantly varying needs, it is important that all parties ensure clear communication by describing programs in terms with standardized meanings.
The RPO Alliance will continue to debate this issue and plans to issue an official RPO grading scheme in the near future. I welcome input from both providers and buyers as we work to bring definitions to this emerging market and make the evaluation and selection process more efficient for all involved.