New research shows the drivers of RPO are changing as the market matures.
By Nikki Edwards
Fact: The world of work is changing, and so is the world of recruitment. The accelerating pace of technological advancement and the global shortage of talent are probably the two most significant factors driving that change. So too are preferences for a more consumerized and personalized experience and having a social media presence. Alongside are the complexities of working with a multigenerational workforce, an aging workforce, economic and political uncertainty, and the emergence of next-generation industries and jobs.
So how do organizations assimilate these factors and ensure that recruitment processes are fit-for-purpose for the 21st century workplace?
RPO partners have had to adapt and continue to adapt to these changes in order to survive: HR and TA teams expect them to be at the top of their game. Adaptation means offering new services, enhancing existing services, and putting significant monetary investment into technology and tools. In 2019, tech platforms help enable the ability to deliver competitive recruitment services.
In contrast, RPO partners report that the gap is widening between their expertise and rate of adaptation and their customers’ knowledge of market trends and rate of adaptation. While HR and TA are well versed in the advantages of leveraging recruitment expertise, they are not keeping up with the accelerating pace of change. In a candidate-driven market, basic errors are being made: Organizations are failing to respond to job applicants (ghosting them)—or are taking too long to respond to candidates so candidates are now ghosting them! Missteps like this will jeopardize their ability to find, attract, and keep talent, which ultimately will put their long-term survival in doubt.
To get a better understanding of the current state, look at those roles that have input into the hiring of talent, and ask: Are responsible team members up to date with—and using—the latest recruitment technology, tools, methodologies, processes, and skills required to source, attract, and hire talent effectively to the best of their ability?
If the answer is no, hopefully that is incentive enough to act. But an in-house team, focused on their day-to-day corporate challenges, is not likely to have the in-depth market knowledge required. The level of expertise will likely need to come from a HR services partner.
Organizations partner with RPO vendors for a variety of reasons. NelsonHall’s 2019 RPO research showed that the top driver is their flexibility to support organizations during peaks of hiring activity. For example, leveraging RPO during the opening of a new call center would eliminate the need to hire in-house recruiters and then end their contracts some time later. RPO partners typically offer a variety of programs depending on needs, including project RPO, staff augmentation or “try-before-you-buy” services for short-term needs (less than a year in duration), and long-term, end-to-end RPO programs.
The research found that organizations also leverage RPO in order to use their expertise to source talent and get advice on appropriate technology and tools for their needs. RPO partners also have experience hiring candidates with specialist skills in a specific industry sector and can deliver the best talent based on the nuances and challenges of the sector as well as access to the talent pool.
While most organizations have existing technology in place and often a limited budget to spend on new platforms, RPO partners can provide advice on where to focus on enhancements, like robotic process automation, artificial intelligence, machine learning, and analytics. Plus RPO partners are agnostic: They recommend the best tools to overcome the hiring challenge whether they have proprietary technology or they are third-party offerings. Gone are the days when RPO engagements would only include specific platforms. Smaller organizations with limited existing tech have the ability to seek out RPO partners who focus on SMBs, as they offer multifunctional recruitment platforms aligned to organizational size and spend expectations.
Standardizing recruitment processes is another driver for organizations. RPO partners can help make processes more efficient, especially for multinational and global organizations that leverage a plethora of localized processes and technology. Aligning processes can also ensure a great and consistent candidate experience. Some reduction in the number of platforms used may be advised, but RPO partners can offer a platform layer to sit across all technology, providing a standard interface or portal for candidates. This gives the perception of a unified system while existing technology and additional tools have been integrated behind the scenes to deliver the required functionality and user experience. NelsonHall research finds that driving efficiencies saves between 10 percent and 33 percent in time-to-hire rates and a quick-apply process sees application completion rates that exceed 90 percent.
Despite organizations facing budget cuts, this year’s research finds that saving money is no longer a top driver for using RPO. However, RPO can decrease costs, often between 20 and 50 percent, and can tailor offerings based on budget availability. Organizations seeking more low-cost solutions can leverage offshore support or more automated services using recruitment platforms.
Organizations that have leveraged RPO partners over multiple contract cycles find they have more sophisticated drivers for continuing to use their services. When competing for a niche pool of talent, it is all about getting to that talent quicker than competitor organizations and securing the top candidates. RPO partners have expertise and insights on talent availability by producing heat maps showing concentrations of talent availability. Then, they leverage tools with complex built-in algorithms to find potential candidates, engage them in a timely manner (maybe building relationships over time for potential future opportunities), and refine those processes over time by using machine learning. Research shows that RPO partners record an average increase of 17 percent in candidate engagement. Some technology deployed looks at “successful” hires (retained employees) and uses sophisticated algorithms to find similar candidates in a bid to replicate hiring success and career longevity of those candidates within the organization.
Those organizations with long-term RPO partnerships do not rest on their laurels; they grow and evolve their hiring practices, making continuous improvements, adapting to whatever hiring challenges are thrown at them.
Nikki Edwards is HR outsourcing principal research analyst for NelsonHall.