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RPO: NOT AN ALL-OR-NOTHING PROPOSITION
- Patrick Beharelle
Chicago, IL - June 10, 2010 - Historically, the period immediately following a recession is a time for thoughtful re-evaluation and, in some cases, true innovation. Most companies made the necessary cuts to their internal HR/recruiting staff as hiring volumes evaporated during the downturn. But as recovery begins, many companies are increasing their hiring forecasts and the volume of viable applicants to screen is at a peak – both of which increase workload and create resource challenges.
Given this environment, many HR leaders are re-evaluating their talent acquisition strategy. The primary options include:
- Rebuilding their internal team and/or contract recruiters
- Engaging in “full” Recruitment Process Outsourcing where most/all of recruiting is outsourced
- Deploying a hybrid solution -- augmenting internal resources with significant support from a third party provider (for sake of argument, lets call this “Partial RPO”).
This article will share insight into how 3 HR organizations re-designed their recruitment solution to be a Partial RPO solution. All 3 organizations conducted an evaluation of their talent acquisition process and chose a customized/unique solution
I) Leverage RPO For High Volume Skills; Focus Internal Team On Complex Skills
Key business drivers for “Telco” moving to Partial RPO were not unique: (1) Cost savings, (2) more scalability to address seasonality and cyclicality, (3) access to an enterprise-wide Applicant Tracking System (ATS).
Outsourced Scope:
Telco made a strategic decision to keep a scaled down internal recruitment team to focus on the company’s most complex and hardest to fill professional positions, while leveraging PeopleScout to focus on the higher volume, less complex positions.
Specifically, TelCo elected to outsource 75% of the recruitment steps (Sourcing, Screening, Scheduling, Offer Admin, Pre-Employment Verifications, Applicant Tracking) for 4,500 of the company’s 6,000 annual hires, while the internal team focused on the remaining 1,500 positions (primarily Director Level and above). TelCo recruiters also utilize PeopleScout’s proprietary Applicant Tracking System for these positions.
Results: After 3 years, the results are still strong.
- Time to Fill cut by 15%
- Interview to Offer Ratio improved from a 4.5 to 1 ratio to a 2.5 to 1 ratio
- Cost Per Hire reduced by over 20%
- Hiring Manager Satisfaction scores increased materially
II) Leverage RPO Provider For Scalability (Professional & Non-Professional Skills)
Reason for Outsourcing: In the case of RetailCo, hiring volumes tended to be short notice “hiring bursts” that caused major scalability challenges for RetailCo’s recruiting team.
Outsourced Scope: The company chose to reorganize its recruiting team to support 500 of its 1,500 annual hires by focusing on (1) Executive Level positions and (2) positions that tended to have the most “steady and predictable” hiring volumes. PeopleScout is responsible for the remaining two-thirds of the 1,500 positions, including both Professional and Non-Professional skill categories that are higher volume and less predictable. Pertaining to process, for in-scope positions, RetailCo outsourced 60% of the process steps, including sourcing, screening, interview scheduling and offer administration.
Results:
The Program has been in place for 18 months and results are encouraging:
- Time to Fill cut by over 20% -- largely due to better scalability
- Cost Per Hire reduced by over 30%
- All Candidate Quality metrics improved
III) RPO Utilized For Process Segmentation
Reason for Outsourcing:
FinCo’s key business challenges were (1) how to cost effectively screen and select the best candidates for hiring among an annual applicant pool of over 300,000, (2) become more scalable to address heavy seasonal hiring, and (3) reduce costly early stage attrition.
Outsourced Scope:
FinCo’s solution was to craft a Partial RPO solution that segmented the process rather than the skill categories. They outsourced 40% of recruiting activities (sourcing, screening, scheduling) for all of its 15,000 professional and front-line hires. PeopleScout conducted an online screen, behavioral telephone interview, and scheduled the candidate for a face-to-face interview. The back end of the process was handled by FinCo’s internal resources. Executive level positions are supported in-house.
Results:
In 2009, PeopleScout screened over 300,000 candidates, of which 40,000 were selected for face to face interviews, resulting in 15,000 hires.
- Cost Per Hire was cut 10%
- 30 day attrition was cut by 15% (after adjusting for favorable recessionary effects on attrition)
- Scalability improved dramatically (continuous ramping up/down of internal resources reduced from tidal waves to trickles)
Conclusion
No doubt the period during and immediately following a recession is a time for thoughtful reflection. Layoffs were executed. Now the questions are more strategic. How do we variabalize our cost structure to meet highly uncertain hiring demands? How do we rebuild our capability to be more effective? Should we engage third party support, and if so, what scope and what firm(s)? Is our process/technology meeting our business needs? The three companies profiled in this article all chose different approaches to meet their specific situation. RPO (whether it be Full or Partial) is not a one size fits all and requires thoughtful consideration and careful planning.
Biography
Patrick Beharelle is the Chief Executive Officer of SeatonCorp, a best-in-class staffing and recruiting company that operates under the PeopleScout, Staff Management, and StudentScout brands. Patrick has been a featured speaker at several key RPO industry events, a regular contributor to industry publications, and is a recognized thought leader in the RPO space. Prior to joining SeatonCorp, Patrick was the Senior Vice President in charge of Spherion’s RPO division. Prior to that role, he served several years in Accenture’s Strategy Formulation Practice and was President/Co-Founder of a highly successful, venture-backed financial services provider. Patrick received his MBA degree from The Wharton School.
About PeopleScout
PeopleScout is a leading provider of recruitment process outsourcing (RPO) services aimed at helping companies with their exempt and non-exempt hiring needs. The firm's suite of services includes RPO, employment branding, on-boarding, and employee retention. Annually, PeopleScout places over 180,000 hires via RPO engagements. Industries served include airline, financial services, telecommunications, retail, utilities, pharmaceutical, and transportation. PeopleScout's clients include some of the more recognizable names in the Fortune 500 list of companies. PeopleScout was recently ranked as a Top RPO Provider in HRO Today Magazine's Baker's Dozen in its fourth consecutive appearance on the closely watched list of industry-leading RPO providers as well as being named #1 in deal size. The firm also has been recognized as the #1 RPO Provider by The Black Book of Outsourcing on their "Top Ten HRO: Recruitment Process Outsourcing/RPO" list. For more information, please visit www.peoplescout.com or call 800-966-4803.