Exactly What Does Quality Mean in the RPO Space?

Nine take-home findings from a WilsonHCG and HRO Today Magazine study

Ask a person on the street what quality means, you’ll get a variety of answers. Craftsmanship. Performance. Reliability. Good answers, but they beg for follow up.

Ask an HR exec what RPO quality means, and you’re likely to hear about service – how well their provider meets their recruiting needs. But that still leaves a lot of questions unasked.

Because WilsonHCG has the highest raw scores in quality
in the industry, HRO Today wanted to know how they are achieving quality, and also ask HR professionals what they think about quality in the RPO space. Specifically, we wanted to know the following:

• What exactly does quality mean in a context of recruitment process outsourcing?
• What are the most important components of quality?
• What are the key drivers of satisfaction?
• What distinguishes quality service from run-of-the-mill or mediocre service?
• What roles do innovation and cultural fit play in perceptions of quality RPO service?

We already had a head start on the answers. Each year, HRO Today‘s RPO customer satisfaction surveys (the industry-leading Baker’s Dozen) demonstrate the relative 
importance of staffing operations on satisfaction. Would an additional study that focuses on staffing operations uncover components that have a greater impact on satisfaction than others; if so, to what extent?

Here’s how we got our answers: HRO Today Magazine and WilsonHCG began a study on April 17, 2015. Survey invitations were sent to readers of HRO Today Magazine and HRO Today newsletters. We screened invitees so only those currently using an RPO provider participated. In total, there were 155 responses. . We followed up by conducting in-depth interviews. Key driver analysis was conducted so we could examine the relationships between the variables of quality and the individual components of staffing operations. To facilitate comparisons and analysis, we segmented one group of HR pros who perceived their RPO as providing quality service, and another group that didn’t, and they become for our purposes the quality and non-quality groups.

Here is what we found:

1. A quality RPO educates clients on the importance of
quality of hire metrics and applications. Those with quality RPOs value all applications of quality of hire greater than those without quality RPOs. Quality isn’t fully realized and innovation is hampered unless the RPO provider is offering proactive solutions and advice. Further, both innovation and proactivity in suggesting solutions speak to enabling change, not just sticking with the status quo. This suggests RPO providers need to explain why HR practitioners should care about specific metrics, and what these metrics can do for the business.
2. The issue of cultural fit is crucial. When asked to rank account-management factors, both the quality and non- quality groups ranked the same items in the same order of importance (how they felt about how their RPO providers delivered was a difference). However, one item stood out: cultural fit. The quality group ranked this factor higher than the non-quality group. This finding was confirmed during follow-up interviews.
3. There is a clear connection between quality of service and innovation, particularly among those that feel they have quality RPOs. When we look at all respondents, nine out of 10 (89.1 percent) cited a connection between quality of service and innovation. Breaking down these numbers, we see that 93.1 percent of respondents with quality RPOs made this connection, compared to only 78.6 percent of respondents with non-quality RPOs. The interviews tell the same story.
4. Responsiveness was ranked the highest of the elements examined when considering contract renewal. How much of an impact does the perception of quality have on contract renewal? Quality is critical. Study results show that 83.3 percent of those who believe they have a quality RPO agree they are likely to renew their contract, compared to only 14.3 percent of those with a non-quality RPO.
5. Those components of staffing operations with the greatest predictive relationship with RPO quality of service are meeting specific goals of recruiting metrics and efficient management of processes. In other words, did you hit the numbers, and did you do so without making a mess?

Not only do positive answers here demonstrate service quality, they are also the best distinguishers between quality and non-quality providers: Meeting the metrics and doing
so efficiently are the two areas where there was the highest gap between those HRO professionals who saw their provider as offering quality service and those who didn’t. Thus, these two elements are strong components of either customer satisfaction or customer frustration.

6. RPO providers should be wary of the post-honeymoon period of a contract. Quality of service and overall satisfaction typically starts off with a mediocre rating about two-thirds positive. In many cases, this rating dips at some point after three months, and then remains flat or decreases until
about 18 months. After that time, the ratings generally increase once more. Therefore, RPOs must be diligent to manage expectations before and during the inevitable post- honeymoon period.

7. Perception of quality in account management has three main drivers: (1) Trust in the account manager (2) Adapts well to changing business needs, and (3) Proactively suggests solutions. The account manager is of course the face of the RPO; as such, that person’s performance is highly important (4.51 of 5.00) in how HR officers perceive quality of service. If that person is flexible in meeting client requirements and is engaged to offering suggestions for improvement, a HR officer is likely to perceive the RPO itself as offering quality service.
8. Quality RPOs distinguish themselves by effectively using the functions of the applicant tracking system (ATS). Great technology doesn’t do a lot of good if people don’t use it. Those with an ATS were significantly more likely than those without one to rate their RPO quality as good or excellent. In fact, 73.3 percent of clients using an ATS reported favorable about their RPO provider, compared with 52.9 percent who didn’t use an ATS.

But that’s not the whole story: The RPO has to be knowledgeable about the functionality of the system, as respondents that said their RPO provider was knowledgeable about the ATS system were 28.5 percentage points more likely to report a quality experience with the RPO than
those with a non-quality experience. Satisfaction with HRIS integration with the ATS is also much higher among those with quality RPO providers.

9. Requisition development with hiring management is among the most important services for those with quality RPOs. Conversely, the service is not entirely appreciated by those without quality RPOs in terms of importance. This suggests that some RPO providers do a better job of setting expectations upfront -and that offers a yardstick for clients to measure performance against. But a vague standard, as with the non-quality group, leaves clients uncertain of what counts as good service and what doesn’t.

Bottom line: This report shows that quality goes beyond service levels and KPIs to encompass responsiveness, innovation, proactive suggestions and having the right cultural fit. Quality isn’t just about doing what’s expected – it’s about moving beyond the status quo to deliver meaningful, lasting value to each client.

Information: To view the complete report, visit http://www. hrotoday.com/category/market-intelligence/research/.