RPO & StaffingTalent Acquisition

Industry Indigestion

By Elliot Clark
In the words of Homer Simpson, “Ouch, quit it, Ouch, quit it.” This was the refrain for most industries in the last few years. But, this is not the case for the recruitment process outsourcing industry. In fact, the “adoption curve” is up and to the right, as many companies moved toward variable cost models offered by outsourcing. We have just completed our annual HRO Today RPO Baker’s Dozen Customer Satisfaction Survey (see the results on page 12). It is our largest survey ever because of the adoption rate of RPO solutions. However, the data suggests the industry has a serious case of indigestion. 
The data was a tale of two demographics. It was the best of teams and the worst of teams. The age of reason and the age of…, well you get the picture. We spend a great deal of time reviewing the data for trends. We typically present a summary of the survey findings at the RPO Summit being held this year in Las Vegas, December 7th and 8th (www.rposummit.com). We also are offering both practitioners and providers the opportunity to subscribe to benchmark comparative reports (respondent identities are redacted) providing composite individual survey item performance. 
For the uninitiated, we conduct the RPO survey each year. We provide survey links for providers to submit to their clients, and we canvass our list of thousands of buyers (some of which overlap).
Last year we received a total of 378 surveys and did our calculation on 268 completed and validated surveys. This year we received more than 600 and calculated based on 448 verified surveys from 256 companies. Almost as many companies as survey respondents last year! 
We ask about 30 to 35 questions (responses are strictly anonymous) that are calculated into three indices. The first examines the sub-processes of RPO service, indexed as overall breadth of service. The second is based on the overall size of program, based on numerical data about average hires managed per year, etc. The final component of the index is quality of service. This is based on a series of questions examining performance and relationship between provider and customer.  
The indices compute into an overall score using a predetermined algorithm. During the last four years, we have generated good comparative annual data.
Now we should go back to what the data told our team.  New customers were generally very happy with their providers. Overall, customers of more than a year were happy but not as happy as new customers. (We can separate multi-year customers.) If you compared company by company from last year to this year, it was clear that satisfaction dropped.  That was not universally true, however.  Adecco moved up a few customers but added several new ones; Alexander Mann moved up slightly with their historical customer group; and SourceRight, Pinstripe, and Kenexa made solid gains in service metrics with customers who reported last year. So, we offer big kudos to those firms.
The most plausible reason for this is indigestion.  Many times when providers are winning new deals at a significant pace they cannot grow their organizations fast enough.  They begin to shift resources from existing programs to new ones.  Though we saw smaller hiring volumes on average per engagement this year than 2007 they have moved up over 2009.  A large number of programs of varying sizes all require planning and implementation.   We use the term digestion problems on the provider side.  Here at HRO Today, I am terming the industry-wide problem as indigestion.
The solution to indigestion is not truckloads of purple pills being distributed at the RPO Summit.  If you are engaging a new RPO agreement, go ahead, but include specific language about the ability of a provider to remove or reassign key project members from your team and your approval rights.  If you are in a current deal, you should consider talking to your provider about making sure your team is stable.
If you are considering RPO, don’t be frightened.  This is a rapidly growing industry with growing pains.  Yes, growing pains. The only other industries with growing pains recently have been the “dire predictions” industry, the “underground bunker supply industry,” and the “how to bailout a big bank” industry.  Oh sorry, you fund that too.  Anyway, RPO is still a good investment.


Tags: HRO Today Forum APAC, HRO Today Forum Europe, HRO Today Forum North America, HRO Today Global, HRO Today STA, RPO Staffing, Talent Acquisition

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