A new report reveals shifts in the world of recruitment—from without and within.
By Debbie Bolla
In it’s third year, the Global RPO Report from Kelly OCG outlines the latest benchmarks in recruitment process outsourcing in the Americas, EMEA, and Asia Pacific. The survey, conducted in conjunction with the HROA, seeks the opinions of senior-level HR executives from small, medium, and large organizations. A total of 536 respondents answered the call this year, with the majority handling recruiting in their own region, and 20 percent of that total reporting global capabilities.
The report analyzed a few key topics:
• Hiring challenges;
• Conditions that slow hiring;
• Hiring patterns;
• Internal recruitment functions versus outsourcing; and
• Hiring processes outsourced.
An unexpected outcome of the survey was that 55 percent of managers reported difficulty recruiting staff. Given the state of the economy and the number of unemployed, it was a bit of surprise that this number remained unchanged from 2009.
“During economic downturn, many resources were transferred to other departments or laid off, and many of those fell into HR. Now they are faced with new positions coming up based on the economic recovery, and they are probably overwhelmed since they have to do more than they did in the past,” says Zachary Misko, global director for Kelly OCG. “In the past, they had a recruitment team, and now mangers have to do that—along with other functions, like sourcing—on their own.”
Other factors from the report help explain this statistic. The top recruitment challenge is the shortage of skilled staff (See Figure 1 below).
“Reaction from a lot of people when they hear that is, ‘What do you mean?’ People have been laid off, unemployment is so high, so there can’t be a shortage,’” says Misko. “But you have to dissect it. When managers post a position using traditional methods like a job board or the company website, people will apply and not be qualified. So it’s not necessarily a shortage of workers—the key word is skilled workers.”
Another possible driver is lack of internal resources. Internal HR teams are both lean and not allocating much time to recruitment. Overall, 60 percent are operating with five or fewer staff members, and 37 percent reported spending less than 10 percent of their time on the recruiting function (with 70 percent spending less than 50 percent of their time on recruiting). In a talent shortage, innovative processes, like tapping into passive candidate pools, are critical to building a successful team. But they take time.
Talent was a factor in the report’s findings on conditions that slow the hiring process (See figure 2 below). Among others, including time to hire (36 percent), hiring manager satisfaction (29 percent), and cost to hire (28 percent), quality of hires was the number one condition affecting the hiring process, with more than half of respondents (54 percent) in agreement.
“People don’t know where to begin to sort through the non-qualified applicants, and that slows the process,” notes Misko. “Building a recruitment strategy and a sourcing plan is key.”
Despite these conditions, the report did show some signs of optimism. Hiring managers reported a slight increase in expectation to make new hires, which conveys a greater belief in economic stability. More than 80 percent intend to hire both permanent and temporary. Another increase is found among the number of firms that plan on outsourcing their HR functions. Up from 43 percent in 2009, 46 percent are seeking to continue or increase their outsourcing initiative. By region, organizations in EMEA (56 percent) are more likely to outsource than those in the Americas (46 percent) and Asia Pacific (29 percent). Recruitment gained the most traction in all three regions, followed by payroll. Familiarity with RPO continues to rise steadily, from 56 percent in 2007 to 62 percent in 2008 to 65 percent in 2009.
So what does the RPO model look like across the globe? It’s almost split down the middle, with half having an outsourced approach and the other half keeping the function in house. About 5 percent adopt a hybrid approach. The trio of models tends to be specific by region, with the following breakdown:
• The Americas: Decentralized
• Asia Pacific: Centralized
• EMEA: Hybrid
For the organizations that are using outsourced recruitment firms, the majority—a strong 93 percent—is seeking help with sourcing, screening, and testing (See figure 3 below). They also look to providers for reference checking (52 percent), applicant and performance tracking (27 percent), vendor management (11 percent), and on-boarding (9 percent).
What does the future look like? Approximately half of respondents reported that they would consider outsourcing recruitment processes, which is consistent across regions.
When vetting providers, managers have specific criteria:
• Recruiter quality: 33 percent
• Industry knowledge: 27 percent
• Cost: 22 percent
• Years of RPO experience: 20 percent
• Technology: 15 percent
• On-boarding: 9 percent
Outsourcing RPO is no longer just about cost savings—quality, flexibility, and scalability are all major drivers. Respondents expect their provider to improve hiring times and integrate multiple sourcing channels. As organizations prepare for the upcoming months, with economic growth pending, recruitment process outsourcing may be a business case for companies looking to gain the best talent while keeping strategic play at their fingertips.
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