Scalability and consistency of process are the primary reasons that drew this aircraft contract manufacturer to the outsourcing realm.
Like any fledgling market, recruitment process outsourcing is experiencing waves of maturity. At one time, the practice was not much more than a cost-cutting exercise mostly limited to project or on-demand hiring. But as this domain of the HRO market has grown tremendously during the past three years, buyers are now realizing myriad other benefits they can derive from RPO, in spite of these lean economic times.
Just ask Tom Stubbins, VP of HR at Vought Aircraft Industries, one of the largest providers of aerostructures in the world. With $1.6 billion in sales and 6,700 employees in nine locations in the U.S., the company provides contract manufacturing to aerospace giants such as Boeing, Airbus, and others. Like his cohorts in the industry, Stubbins is faced with a particularly thorny challenge: Hiring occurs in waves. Large capital orders like the new Boeing 787 take years to fulfill, and manufacturers must be able to quickly scale up and down their workforces.
“We are in a fairly cyclical industry; we are either doing a lot of hiring or very little hiring,” said Stubbins, who began considering outsourcing recruitment nearly two years ago. He explained that order cycles are typically two or three years, and time-to-fill in its hiring had been a chronically difficult issue. At any one time, the company may be looking to fill as many as 1,000 jobs, with a number of them being engineers who are considered hard to find.
Plethora of Challenges
If Vought’s problem had just been an issue of cutting time-to-fill, Stubbins might not have been so pressed to consider outsourcing recruitment. However, other parts of the process were broken as well. Having manufacturing spread out through six locations, the company turned hiring responsibilities over to HR managers in the field. The results were disparate processes for getting candidates in the door and on the assembly line. Quality of hires suffered, and use of contract labor firms and recruiters was high.
Many of Vought’s internal recruiters never embraced the idea of passive recruitment. Furthermore, they mostly relied on job board postings to bring candidates through the doors—an approach that Stubbins said failed to identify the most qualified talent in the market.
“We also found that our internal recruiters were more used to putting an ad in and having people come to them. They weren’t going out and finding candidates, which in my experience would get you the best candidates,” he added.
If Stubbins’ dilemma has a familiar ring to it, it’s probably because this is a common scenario. Many organizations, especially mid-market companies that have grown rapidly through acquisitions, face these same headaches today. In fact, HRO Today has reported on dozens of businesses that have seen their hiring costs spin out of control, stumbled by retention difficulties, or have been distracted by tactical burdens simply because recruitment proved to be such a unwieldy beast.
Stubbins said he realized early on that Vought needed true domain support not just for certain steps in the recruitment continuum. After all, the company had been procuring such expertise in a piecemeal fashion for years. When the company put out a request for proposal for a pilot RPO project in early 2007, Stubbins envisioned a solution that could eventually be rolled out across the enterprise in all its locations to address Vought’s full spectrum of hiring difficulties. But the vetting process wasn’t easy, and it required the company to carefully navigate the marketplace.
“We went out and did a bunch of due diligence. What we found is there are a number of companies that were traditional job shoppers that wanted to move into this market. There didn’t seem to be a lot of companies that delivered the actual recruitment process” end to end, he pointed out.
A Maturing Market
That shouldn’t come as a shock to anyone familiar with RPO. The practice two years ago as it is now is an immature business. But back then, providers were even greener than they are today, and a lot has changed since. For instance, M&A activities have been in high gear during that time, with a number of firms swallowing up competitors and technology suppliers. Buyers, too, have grown more sophisticated, learning to clearly voice their needs and expectations. Unquestionably, Stubbins would find a markedly different landscape today than he did 19 months ago, when Vought issued its RFP.
After considering a number of suitors, it chose Spherion RPO, which has emerged as one of the leading providers in the market. As a staffing giant that also boasts a portfolio of Fortune 500 clients, Spherion was selected based on what Stubbins said was clear competencies to deliver the entire recruitment process. “Spherion had the full capabilities to do the whole recruitment process. We looked at folks with experience in this industry, but we were won over by Spherion’s capabilities,” Stubbins recalled.
In arriving at his decision, Stubbins said he mulled over a number of considerations, including the vendor’s ability to work with Vought’s existing applicant tracking system (it had previously installed iCIMS), clear communication of services, and responsiveness to a barrage of questions he and other team members had. In the end, he concluded, Spherion seemed to be the best fit with Vought’s recruitment needs and geographically dispersed infrastructure, largely because of its process discipline.
“Most concerning to me was having a consistent process, with all the data in one place so we were compliant” with all applicable regulations, Stubbins added. “As we contracted or expanded, they would have the ability to contract and expand with us, and they had the ability to make sure we had one consistent process.”
The vetting process didn’t end at choosing Spherion. Although Vought was confident that the vendor was a good fit, it hedged its bet by entering into a pilot program at first. Through a six-month trial that concluded with 400 hires, the aircraft contract manufacturer was able to first test the RPO concept—a trial that produced clear benefits—before implementing it company wide. Stubbins said all the new hires from the pilot were highly qualified, and line managers were satisfied with the process.
“Doing that six-month pilot program allowed us to prove that it could be done well and done by a third party,” he said, pointing out that a few hiccups along the way were addressed quickly.
The pilot program concluded earlier this year in May and was immediately followed by a full implementation, which went live about a month later. Under the contract, Spherion is responsible for the entire gamut of recruitment services, including requisition processing, sourcing, assessment, and even orientation. It also provides on-site support at Vought’s biggest location.
Stubbins said he has been pleased with preliminary results. He credits this in part to an aggressive change management effort supported by internal HR and Spherion staff. Tricia House, a project director at Spherion who manages the delivery of services to Vought, said she made sure managers at each of the client’s sites understood how RPO would benefit them, which ensured buy-in.
“What I found was just really educating them on the RPO model was beneficial, and walking them through the benefits we are now able to bring to Vought,” she recalled, adding that one new initiative is to aggressively recruit recent college graduates. Through these and other process improvements such as employer branding, the engagement has not only helped Vought to reduce time-to-fill—down more than 40 percent since implementing RPO—but it has also brought in a higher quality of recruits.
Just as important, consistency in the recruitment process also means Stubbins no longer has to worry whether new hires complied with regulatory mandates as well as internal policies because all of the candidates are recruited using the same process. He said it was critical that the recruitment process is performed by a single vendor to ensure consistency and continuity.
“You can’t do this well with multiple providers. I don’t see how this could work. You create a requisition, and that has to go somewhere. It would be disconnected if you had multiple people doing this,” he said.
Still, Vought has yet to experience one of the most sought-after benefits of engaging in RPO: scalability. A strong surge in hiring has yet to occur since implementing Spherion’s services, but Stubbins said he is confident that when that eventually occurs in the future, the company will be well prepared to handle such a demand. Internal recruiting resources will no longer be the bottleneck of hiring.
Although cost savings have often been cited as the primary reason why some buyers engaged in RPO, for others like Vought, benefits such as scalability, consistency of process, and domain expertise are why they have wholeheartedly embraced outsourcing.