By Rajesh Ranjan and Sayan Chatterjee
Today’s hyper-competitive business environment is driving a very different war for talent that demands not only the best permanent hires but also superior contingent workers. In order to capture the value proposition of total talent acquisition, an increasing number of organizations are evaluating an integrated outsourcing model called “blended RPO.”
This model, which addresses buyers’ full-spectrum talent acquisition needs through just one service provider, rather than multiple vendors, has the potential to benefit organizations on multiple levels:
Financial impact – looking holistically at the total cost of ownership business case for both permanent and contingent hires, buyers that leverage blended RPO can increase their savings beyond that provided by an independent managed service provider (MSP) and standard RPO arrangement by nearly 25 percent. The key levers of additional savings within blended RPO are better workforce utilization, better demand management, and lower service and vendor management costs.
Business impact – blended RPO can provide organizations with greater up- and down-scale staffing flexibility, enable concentration of talent acquisition knowledge and standardized hiring practices, free up internal resources to focus on strategic talent management issues rather than multiple service provider relationships, ensure a single point of accountability for all talent acquisition, and enforce compliance across all worker types.
Strategic impact – businesses that utilize blended RPO can achieve better alignment of workforce planning to overall business strategy, competitive differentiation, and higher employee engagement, particularly among contingent workers via a more permanent hiring mindset.
Despite the growing business case for blended RPO, its adoption has been slow due to a variety of factors including: siloed permanent and contingent hiring responsibilities and their owners’ differing objectives; service provider concentration risk; lack of a robust, integrated technological platform that caters to both permanent and contingent hiring management, especially in a multi-country situation; and the fact that only a handful of providers can prove combined robust MSP offering and mature RPO services prowess.
To achieve optimal results from blended RPO, buyers must: create a holistic business case, align stakeholders’ objectives and change management, prudently evaluate and select the right service provider, carefully design the outsourcing contract, utilize the right implementation approach, and leverage a technological solution – separate or combined – that can cater to both contingent and permanent hiring needs.
More details on the upsides, challenges, and key considerations of adopting a blended RPO model are available in Everest Group’s report entitled, “Rise of Blended RPO: Addressing the Total Talent Acquisition Need.”
Rajesh Ranjan is research director and Sayan Chatterjee is senior research analyst for Everest Group.