Survey reveals higher satisfaction and ROI when practitioners consider recruitment process outsourcing in strategic ways
by Andy Teng
Leveraging recruitment process outsourcing (RPO) in strategic activities is a practice that many companies are still not comfortable with, according to a survey recently released by the Human Capital Institute. While RPO has made significant market penetration among employers, many practitioners continue to only engage their service providers for tactical support, the survey revealed, missing an opportunity to use outsourcing as a way to gain strategic advantage.
According to Ross Jones, a senior researcher and analyst with HCI, the survey of 381 business professionals involved with recruitment at their organizations revealed a dichotomy between those who use RPO in a low-level, tactical way and those who have adopted it to address strategic needs such as meeting business growth requirements. He said he was surprised by how slowly some organizations sought to use external services, despite having already outsourced some aspects of their recruitment function. Jones added that the results also confirmed that using RPO in strategic ways led to clear rewards for the practitioner.
“The bottom-line finding is that if you are going to consider outsourcing some or all of recruitment, you should look at all the activities and think about tactical and strategic services, and finding a partner who you feel comfortable with and make sure they can take on both tactical and strategic activities,” he noted.
He said the survey respondents were clear on the reasons. For example, 22 percent of companies who say they use RPO with a strategic focus said they get an excellent return on investment; of those with a tactical focus, only four percent say they experienced excellent ROI. Overall, most (63 percent) described their ROI as good or neutral. Similarly, satisfaction rates corresponded with ROI responses.
Of those surveyed, 59 percent said their company engages in some kind of recruitment outsourcing while 39 percent said they didn’t. The rest were unsure.
With practitioners engaging RPO in a variety of ways, it wasn’t surprising that overall satisfaction rates were less than stellar. In fact, a majority (61 percent) ranked their program as either break-even or worse, so only a minority (39 percent) thinks RPO is a good value. But as Jones pointed out, satisfaction levels were much higher for those who applied RPO in more meaningful ways.
“Clearly, those organizations that apply RPO to addressing strategic needs in their talent
acquisition process are the organizations that are capturing the full value of RPO,” he noted in his report.
Reflecting perhaps the economic times, a large block of survey participants expressed uncertainty about engaging in RPO. Although 50 percent said they would use RPO in the next five years, 30 percent said they would not, and 20 percent said they were not sure. Of those who don’t plan to outsource, a majority said they didn’t need to because they were proficient at recruiting, and another 18 percent said cost was the deciding factor.
Still, employers have clear and compelling reasons for outsourcing recruitment. In addition to traditional reasons cited by many survey participants—including better time to fill and cost per hire—there are other benefits RPO can deliver, such as a more strategic HR organization and better quality of candidates.