Reap the benefits of engaging in outsourcing the second time around.
By Debbie Bolla
Five years is a short amount of time, but it’s amazing how much can change in that period. Just ask recruitment process outsourcing (RPO) buyers. Turn back the hands of time, and HR executives were seeking RPO to tackle staffing problems mainly in terms of cost per hire and scalability. They were in it for the cost savings to drive the bottom line. And while this metric is certainly still measured, it’s no longer top of mind. That’s the beauty of entering second-generation RPO. The industry is at a maturation point where second-generation buyers expect—and earn—more value from their engagement, and first-generation buyers have the opportunity to start ahead of the game.
“We are seeing more buyers come to the table with a much clearer vision of what they want,” reports Angela Hills, executive vice president of Pinstripe, Inc. “They are looking to evolve the model and create a solution that isn’t cookie cutter.”
Evolve the model how?
“The first-generation RPO was largely centered on cost saving and scalability/flexibility considerations,” notes Rajesh Ranjan, vice president of BPO for Everest Group. “The second-generation RPO is about getting value beyond these. It is about creating business impact through better quality of hire without compromising or probably still reducing the time-to-hire metric, better integration of recruitment to workforce planning, and overall talent management, quicker time-to-market.”
Overall talent management is key in today’s questionable economic environment that plagues HR executives with unprecedented problems. High unemployment rates have encouraged an abundance of applicants, most of whom are either underqualified, overqualified, or “un”-qualified with experience that doesn’t line up to the job position’s needs. Then there is the issue of “passive” candidates—those who are best matched for the position, but not actively looking. The dynamics are ever changing, and RPO is stepping in to fill the gap with help from advancements in technology. Today’s engagements are likely to include sourcing technology not available before, as well as data analytics that show the reason behind sourcing and hiring.
“Hiring managers can look at real-time hiring data that is driving the sourcing of candidates, and it can be broken down by category like active versus passive,” explains Jeanne MacDonald, chief sales officer for Futurestep. “Data can show what is happening right now. The present is very important to manage the future.”
Business intelligence is playing a large role in how companies strategically manage their talent. Companies have the ability to track what determines a successful hire. “Second-generation RPO provides the dashboards, planning capabilities, and insight into talent engagement, promotions, and turnover that enable companies to pinpoint what makes for a successful hire and repeat it,” says Sasank Aleti, vice president of LLR Partners. “It’s not just about hiring bodies and turning fixed costs into variable costs anymore.”
The game has officially changed—but for the better. “Talent acquisition and HR leaders are getting more options than prior, and it’s raising expectations,” reports Shanil Kaderali, principal of SK Consulting and former talent acquisition leader for Knowledge Universe and WellPoint. “RPOs are going to have to live up to higher expectations, and that includes delivery of services.” Kaderali points to the big transformation in the use and definition of metrics. Talent acquisition leaders are now looking for quality of pipeline, less than 90-day turnover, assessment of critical roles, and brand equity.
The new marketplace for talent and the drivers of RPO engagements call for a more holistic, organic, and strategic approach. Ranjan points to what he deems “SAM,” which translates to the social, analytical, and mobility phenomenon. He describes a three-fold phenomenon. “It calls for bringing more innovative approaches to sourcing that looks to tap and engage candidates through social and related mobility tools. It calls for better screening and assessment that looks at fitment beyond pure skills and takes into account organizational context and culture. Lastly, it calls for analytical approaches that identify the best practices (e.g., what characterizes best talent, where it is likely to be found, etc.) and help create an effective feedback loop back into the sourcing process.”
Now while other experts didn’t put it in such terms, agreement was found on such trends in the industry. The statistics backing the power of mobile capabilities are staggering.
According to ABI Research, 1.2 billion smartphones will enter the market during the next five years, and Vertic reports that enterprise tablet adoption will grow by almost 50 percent per year. The way people work has clearly changed, and talent acquisition executives are looking to incorporate this explosively popular way people communicate into their strategies.
Mobile recruiting leverages today’s technology to interact with potential candidates and job seekers. It has clear-cut advantages:
Convenience. Candidates can job seek whenever, wherever. They enjoy the privacy a personal device has to offer, and there is no concern over company firewalls getting in their way of their job pursuit.
“In today’s heavily scrutinized IT environments, there are stricter security policies and also more record keeping of employee activities. Currently employed people don’t want to risk having their current employer find out that they are looking for work, so they are less likely to use a work PC during the day to interact with recruiters,” explains Michael Beygelman, president of RPO for Pontoon. “Enter mobile technology like iPhones, Android phones, and tablets like iPads. These are personal devices, not monitored by employers, and represent a safer way for people to potentially look for new work.
In fact, one can use SMS [short message services] or even mobile recruitment portals to interact with candidates while they are walking, riding on a bus or a train, or where people are spending increasingly more time—in the bathroom! Yes, surveys show that people are spending more time in bathrooms because they bring their phones there with them. Mobile devices enable companies to meet prospective candidates at a place and time that is most convenient to the candidate, versus a place and time that a company representative is available.”
Reach. The dynamics of the workforce are constantly shifting and for the first time include five generations of workers. But that will change—and soon. By 2018, the workforce will be infiltrated with Millennials, making up half the entire workforce. These younger generations are more receptive to mobile recruiting strategies
“The use of mobile by job seekers through email, job apps, or social media is already very prevalent. In order to connect with the best potential hires, companies must present opportunities where their talent pool is already engaged,” says Aleti. “Use of mobile,
particularly through social media, also helps companies maximize
their outreach and pull in passive job seekers who may be the most qualified for a position.”
Ranjan points to the efficiency mobile recruiting can offer through quicker communication and improvement in back-office operations. Experts argue that mobile is a “must-have,” but it is still in its infancy. How will it grow to become a successful approach to attracting and retaining top talent? Hills of Pinstripe says RPO providers will have to strike a balance between the old and newer ways of conducting business. “There must be a balance between high tech and high touch. We must leverage new technology without forgetting the people element,” she says.
Analytics is a hot topic of conversation in every global organization. How best to leverage big data in recruitment strategies is on the horizon and nearing reach. “There is a major opportunity with big data and analytics—it’s mind blowing,” says Hills. “The key here is getting HR to consume it, digest it, and use it to predict the future.”
Andrew Goldschmidt, chief customer officer of Kenexa, couldn’t agree more. “I’ve had discussions internally, and we know that big data exists. Companies that look at market demographics are able to solve manufacturing challenges, but how do organizations incorporate people data? How do you link it to organizations and track talent pools? Big data will allow organizations to analyze talent pools like an economist would. There is big opportunity there. People data is going to be big.”
Ranjan warns not to confuse analytics with reporting. Analytics aren’t typically metrics, rather information that can be processed to make strategic decisions. “The power of analytics really lies in deriving insights to help better decision making,” he says. “The real power of analytics will come into play when “structured” internal employee and performance data can join forces with “semi-structured” applicant resume data and “unstructured” social data. The structured internal data will help us identify the skills, background, and competencies that creates a high performing employee.”
Such data can help determine the sources of high-performing employees and how to engage them. Ranjan says this will lead to “better-fit” candidates within the existing talent pool, increasing efficiency and effectiveness in the recruiting and sourcing process.
RPO is at the crux of the change: successful first-generation RPO contracts crashing against bleeding-edge technology that allow for more strategic, smarter second-generation engagements. The growth and maturity of RPO within the last five years or so proves it an effective business process that can only become more effective through the next level of innovations in the marketplace.
“RPO providers are expected to deliver innovative, data-driven solutions that ensure customers are attracting and hiring the best available talent,” says Aleti. And it seems they are headed in that exact direction.