Article on RPO Auditing
Since entering the world of recruitment 1986, I have experienced the recruitment industry from both an agency and an in-house perspective. I have seen the recruitment agency market evolve from mainly contingency based work to the emergence of campaign based organisations. I saw the arrival of some of the first recruitment specialists into personnel or HR departments. In 1996 I made the transition from “agency” to “in-house” – “poacher turned gamekeeper”?
Along with other companies, I implemented a series of preferred suppliers lists. Some organisations developed this in to agency management models or sole supplier agreements. In the early days of the new millennium we saw the arrival, from across the Atlantic, of Recruitment Process Outsourcing (RPO) companies.
There have been various attempts in defining RPO's and the following description meets most of our thoughts. “ Recruitment Process Outsourcing (RPO) is a form of Business Process Outsourcing (BPO) where a business outsources, or transfers part or all of its recruitment activities to an external service provider. To quote the Recruitment Process Outsourcing Association, "Recruitment Process Outsourcing is when a provider acts as a company's internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through the on-boarding of the new hire, including staff, technology, method and reporting.”
Companies adopt the outsourcing route for a variety of reasons. It might be a need to rapidly decrease
headcount in the HR department, and thereby immediately increase “revenue per capita”. Maybe it is to focus on their core business and to leave the “experts” to worry about the intricacies of recruitment activity. Sometimes it may be that there are performance issues with the in-house recruitment department, with roles taking too long to fill or recruitment overall proving too costly. Maybe the recruitment requirements experience peaks and troughs and the apparent flexibility of an RPO is seen as the solution. Sometimes a business is experiencing difficulties in sourcing or managing their own recruitment departments and Outsourcing is seen as a way of removing that particular problem.
A properly run recruitment department ought to minimise the time to hire, the cost to hire,
address attrition issues, improve the quality of the recruits and demonstrate these savings and improvements by meaningful Management Information.
Where recruitment is not working well as an in-house activity, a properly managed RPO should improve a company's time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve legal compliance. Where this is the case, fantastic! However, sometimes the benefits are just not realised. The poorly run in-house recruitment team is replaced by a poorly run or poorly focused RPO. The processes are broken, the relationships damaged, the rationale for going down the outsourcing route is forgotten, or the model being operated just doesn't meet the current business needs.
Before considering Outsourcing, the rationale for this route should be fully explored. If the processes in place don't work now, Outsourcing them – unless to a Transformational RPO - is never going to fix the problem. If there is just a short term or temporary need due to specific peaks, then the problem may be better addressed by “out-tasking” or “co-sourcing” rather than “outsourcing”. The major distinction between RPO and other means of recruitment is the Process.
With effective RPO setups, the service provider should assume ownership of the process. With other types of recruitment models the service provider is simply part of the process controlled by the organisation buying the service. But the client company should always accept ownership of the overall strategy.
In 2000, I first had responsibility for outsourcing, or rather out-tasking or co-sourcing elements of recruitment. Faced with a situation of major increase in headcount, but no headcount for my own direct team, I went down the out-tasking route by purchasing the services of different recruitment partners to focus on specific areas of recruitment activity. In 2005 working on a project, for an RPO, to assist them with a specific burst of recruitment activity with their premier client, I saw some excellent working practices, a true partnership between the client and the RPO, robust processes and Management Information. A year later, working on an assignment for another RPO, I oversaw the review of specific processes and practices concerning pre-employment checks and on-boarding. There was recognition from the client company and the RPO, that business requirements had changed and the process needed to change to keep relevant. Soon after this I was working directly for a client company, where the justification for having an RPO was challenged. Partly the lack of agility to respond positively to the changing business needs by the RPO at that time, the decision was made to bring recruitment back in-house. I project managed the development of the necessary in-house recruitment processes, transitioned away from the RPO bringing some suppliers with us and identifying others. In the instance the client company ended up with a more cost effective solution, more robust Management Information and a more agile approach to recruitment.
Having had experience of outsourcing various activities, terminating and transitioning the recruitment back in-house, the opportunity to turn around a relationship and agreement that wasn't working was particularly attractive to me. Working for a media and broadcasting organisation, where an RPO agreement had been in place for two years, and which needed shaking up was the next project for me. As with previous projects, the starting point was to conduct an audit and understand what was happening, why it was happening, identifying what, if anything was broken and addressing those issues.
In recent assignments I have been brought in to resolve RPO issues. My starting point has been to conduct an audit, gather the management information, analyse the difficulties and issues from all parties and work to resolving the differences. Key to this is Management Information, the interpretation of the data, understanding what all parties are looking to get out of the relationship and helping to find common ground for the way forward.