In rolling out a new solution for the SMB market, one vendor is hoping to create a new economic model by leveraging technology and automation.
With recruitment process outsourcing (RPO) enjoying a surge in adoption rates among large employers, it would seem the market’s focus will channel mostly on large enterprises. The fact is, however, that small and mid-market businesses (SMBs) are just as in need for cost-effective, efficient recruitment support as their large-market counterpart, but today’s market has yet to deliver such a solution catered to this specific segment. But change is forthcoming.
HRO’s value proposition—whether in recruitment, payroll, benefits administration, or other services—has always been based on the service provider’s ability to leverage economies of scale. At the same time, for providers to make money, buyers must meet a minimum volume of employees or hires. For SMB organizations, their relative low volume has usually meant that they either embrace a more rigid, standardized outsourcing solution or invest in internal competencies to support their unique service requirements. In the outsourced recruitment market, the low volume of hires that SMB companies—typically defined as organizations with fewer than 15,000 employees—make each year means their outsourcing options are limited.
“Anyone who thinks that the SMB is different [from enterprise businesses in their recruitment needs] is wrong. They (SMBs) want top tier service, support, and capabilities. The challenge is the volume isn’t there,” said Chris Forman, president of AIRS, which was acquired by RPO provider The RightThing earlier this year.
According to Forman, the RPO provider acquired AIRS with the intention of leveraging its technology across all market segments, but the one it hopes to make the most inroads will be in the SMB. In June, the company launched The RightThing TalentPoint, a turnkey offering aimed at companies with 750 to 4,000 employees. It is the first all-in-one service directed for smaller businesses.
Tech is King
Forman explained that at the heart of the The RightThing’s solution is the AIRS technology, which automates the sourcing process and streamlines the front end of the recruiting process. While it can be leveraged for customers of any size, it is especially appealing for SMBs because of its pricing. Contending that technology-leveraged RPO is the key to serving organizations of this size, he said his company will continue to enhance the offering to further gain efficiencies, improve time to hire, and make it an attractive solution.
Because it is an end-to-end, pre-configured solution that relies heavily on technology, TalentPoint is able to reduce some of the high-touch elements in the company’s RPO services for enterprise clients. Furthermore, it also speeds up the recruitment process so positions could be filled more quickly, Forman added.
The service, which includes requisition management; candidate recruiting and sourcing; candidate intake, selection and assessment; and applicant tracking, allows clients to use pre-configured questionnaires or customized ones for low-volume positions. The critical component is the automated sourcing function, which will enable the company to leverage the technology across all of its clients.
Forman likened the RPO industry today to the comprehensive HRO market. Just as that market is now focusing more on mid-market solutions with the likes of ADP, Accenture, Fidelity, and others rolling out or strengthening services for this segment, the RPO market will also eventually turn its attention to the SMB segment. While growth in enterprise market remains strong, demand will eventually slow. That’s why providers need to consider their strategy for the SMB today, he said. “I can’t envision any player in RPO not having a SMB strategy,” he commented.
For The RightThing, that strategy will markedly differ from its approach to the large-market segment, in which most companies today continue to buy RPO services on a project basis. That means buyers still engage outsourced RPO services by job classes on an as-needed basis or in some other limited approach. Forman said The RightThing’s SMB offering is being rolled out as a comprehensive package only, with clients receiving “soup-to-nuts” services, technology, and tools. While it may not be the solution for everyone, it is based on a business model that serves both clients and the provider.
Whether The RightThing’s full-service offering will catch the attention of many SMB buyers remains to be seen. But one thing is for sure: More providers will likely develop SMB-specific RPO solutions in the future to tap into this emerging segment. And that will most certainly raise the buzz over RPO among small and mid-sized organizations.