Solution: Recruitment Process Outsourcing

What is Recruitment Process Outsourcing?

Posted on by epadmin

So, what is recruitment process outsourcing (RPO), and why should companies use it? RPO can boost your talent acquisition by optimizing processes amid fierce competition. Whether you’re exploring RPO or want to learn more about maximizing it, this guide will provide valuable insights. Understand how partnering with an RPO can boost your talent acquisition outcomes.

This overview explains RPO, answering common questions, including:

  • How RPO works
  • Types of RPO
  • The benefits of outsourcing recruitment
  • What to look for when selecting an RPO partner

👉 Get our RPO buyer’s guide.

What is Recruitment Process Outsourcing?

Recruitment process outsourcing (RPO) is a type of business process outsourcing (BPO) in which an external organization (RPO provider) supports an employer’s talent acquisition function by assuming responsibility for some or all facets of the talent acquisition function to support some or all of an employer’s hiring needs.

For example, an RPO engagement may only cover sourcing and screening candidates (partial-cycle RPO) or it may cover the entire recruitment lifecycle from receiving hiring manager’s requisitions all the way to presenting and negotiating job offers to candidates (full-cycle RPO). An RPO provider works closely with an organization’s internal talent acquisition team, either remotely or on-site.

Why Do Companies Choose to Outsource Recruitment?

Below, we highlight a few high-level reasons why organizations seek RPO providers, and conversely, when RPO may not be a good fit:

REASONS TO ENGAGE AN RPO PROVIDER:

  • If your organization is looking for more speed, agility and flexibility in your recruiting processes
  • If you are looking to improve the quality of candidates applying to your positions or struggle to attract the right talent
  • If your organization is looking for a more cost-effective and standardized recruiting process
  • If your organization’s current use of recruitment technology isn’t up to par and you are seeking a variety of digital upgrades specific to your organization’s recruiting objectives
  • If your organization is looking to increase diversity hiring, RPO providers can help you uncover new diverse talent recruitment sources and strategies
talent recruitment

REASONS NOT TO ENGAGE AN RPO PROVIDER:

  • If your company culture is not ready for outsourcing talent recruitment
  • If you just need a vendor to fill a quick requisition or two as opposed to a partner to support your talent acquisition strategy
  • If your organization isn’t open to optimizing your recruiting processes and tech stack

Remember, these reasons are not set in stone. Only you and your organization can assess if you are in need of an RPO partner’s services. An RPO partner should customize their solution to match your needs and offer flexible options to support for peak hiring, hard-to-fill positions, compressed time frames and more—however it works best for you.

👉 Are you Ready for RPO? Ask Yourself These Three Questions.

How Does RPO Work?

During an RPO engagement, the RPO provider’s team works closely with their client’s talent acquisition team and hiring managers to learn the organization’s long-term talent acquisition strategy, hiring challenges and goals.

The RPO provider then designs a customized recruiting program tailored to support the client’s specific needs. RPO is not a one-size-fits-all solution. A leading RPO partner will customize its service to match your requirements, which could include any or all of the following talent acquisition activities:

RPO Process

👉 Learn more about what to expect in an RPO partnership.

What is the Difference Between an RPO Provider and a Staffing Agency?

An RPO provider is distinct from a staffing agency or headhunter. Staffing agencies identify candidates, obtain their résumés or CVs and submit them to the client.

An RPO partnership brings a higher level of engagement. Your RPO provider will do a deep dive into your talent acquisition goals and challenges and then create and execute a customized recruitment program—and report back on the results. An RPO partner is a trusted advisor who can help you gain agility and future-proof your business.

👉 Learn the top differences between an RPO and a staffing agency.

What are the Types of RPO Models?

Designed for flexibility, RPO can be customized to meet your needs. Fully outsourcing recruitment may not make sense for all organizations. But that doesn’t mean RPO won’t provide value if you’re not ready to go all in. RPO teams are often used alongside existing in-house recruitment teams. The RPO can complement your current recruitment program by handling recruiting for specific job groups, locations or business units.

Here are various types of RPO that are commonly available:

Full-Cycle RPO

The RPO partner owns the entire recruitment cycle from opening requisitions all the way to presenting and negotiating the job offer—and all activities in between. This solution offers the client the full benefit of the RPO partner’s expertise which most organizations don’t have in-house, including value-added services like market insights, recruitment technology and employer brand consulting.

Partial Cycle RPO

The RPO partner covers certain parts of the recruitment process to boost internal recruitment resources. For example, the RPO partner might source and screen candidates and then hand them over to the in-house recruitment team to schedule interviews and manage offers.

Recruiter On-Demand

Recruiter On-Demand engagements are typically fixed-term contracts meant to address specific recruitment challenges such as seasonal hiring peaks, hard-to-fill positions, compressed timeframes and more. The RPO is there to augment the in-house team, often due to rapid growth. These engagements kick off quickly, and the required positions are filled within a few months.

👉 Learn more about recruiter on-demand.

Modular RPO

Modular RPO, or variable RPO, is a strategic approach to managing the recruitment process in an ultra-focused manner. It involves outsourcing specific components of the recruitment process to an RPO provider, or as a supplement to an existing outsourced recruitment engagement, providing quick access to targeted and customized recruitment support. With a modular or à la carte approach, you choose from a range of services based on your requirements.

👉 Learn more about modular RPO.

High-Volume RPO

High-volume RPO involves sourcing, screening, interviewing and hiring large numbers of applicants for similar openings or job types. It requires a tricky balance of keeping substantial quantities of job applicants moving through the recruitment process at speed. Plus, throughout the year it requires talent acquisition teams to scale up quickly to meet seasonal demand, like for holiday shopping periods or during peak travel times.

👉 Learn how to overcome high-volume hiring challenges.

Recruitment Cost Per Hire

What are the Benefits of RPO?

Now that you can answer the question, “What is recruitment process outsourcing?”, you may be wondering why organizations engage an RPO provider. Partnering with an experienced RPO gives you access to extensive recruitment knowledge across industries, roles and regions. RPOs have managed every type of hiring campaign imaginable. Whether you need help with one function or end-to-end recruiting, RPO offers advantages including:

Minimize Costs

Every day a role goes unfilled, your organization loses productivity, which can lead to losses in revenue and profits. Plus, inefficiencies in your organization’s hiring processes can result in lost revenue and more hours spent recruiting. And, if your organization hires the wrong person, you’ll spend even more time and money recruiting and training a replacement for the bad hire. By streamlining and optimizing recruitment processes, improving the time-to-hire and retention rates, RPO providers can increase your recruiting return on investment and deliver real cost savings to your bottom line. In fact, Everest Group states that organizations can expect a 45% to 55% annual savings with RPO compared to in-house recruitment.

Access Higher Quality Talent Faster

As skills shortages and talent scarcity becomes more challenging, having an RPO team digging into passive sourcing to access niche skills sets will boost time to hire and improve quality-of-hire. RPO providers leverage their comprehensive talent networks and effective screening and assessment tools to produce stronger candidates and more diverse talent pools. This keeps hiring managers happy and helps your organization achieve its goals.

Agility & Scalability

A leading RPO provider should flex to meet your requirements. Your organization can scale the amount of work your RPO provider performs to better manage your recruitment cost-per-hire goals and recruiting budget. When you have an increased demand for talent, an RPO provider can promptly scale up your team of dedicated recruiters to keep on top of your increased demands. This works the other way around as well: when there is less demand, we can scale down, saving you recruitment spend, and you avoid layoffs in your talent acquisition team during low demand periods.

Enhanced Candidate Experience

You want your recruitment process to leave every applicant, regardless of whether they get the job, with a positive experience. Your RPO partner can advise on ways to improve the candidate experience including career site audits, job application recommendations and how to leverage technology to speed up the process and reduce friction.

👉 Get Inside the Candidate Experience with our exclusive research report.

Best-Fit Technology

RPO providers can help you implement technology solutions that balance human expertise with automation. RPO partners have expertise with platforms across the HR and talent acquisition tech ecosystem and can make recommendations to help you attract and engage talent more effectively. PeopleScout’s total talent suite, Affinix® proprietary total talent suite of AI-powered tools, connecting applicant tracking, candidate relationship management, recruitment marketing, digital interviewing and talent analytics.

Access More Expertise

Partnering with an RPO means you gain important talent acquisition expertise without having to invest in internal resources. RPO partners have developed a depth and breadth of experience from working across many clients, industries, job types and regions. While they offer recruitment sourcing best practices, they also offer value-added services that will optimize and streamline each phase of the recruiting process like employer branding, recruitment marketing, skills assessment, market insights, specialist sourcing solutions and more.

Improve Diversity

Through experience collected over many client engagements, RPO teams are knowledgeable about different talent attraction options and can help you expand to new job boards, social media groups, online forums and events to engage a more diverse workforce. Plus, RPOs understand the regional nuances of DE&I issues. For example, in some countries like Poland, it is not legal to ask candidates their ethnicity, gender, etc.

Workforce Planning Strategy

Leading RPO providers can provide labor market insights, talent intelligence and benchmarking data. With access to these insights, you have the data you need to support your workforce strategy as well as tactical business decisions. You can capitalize on the latest market analysis, thought leadership and competitive intelligence to inform your talent strategy. Your RPO partner can provide analytics to help you understand what’s working so you can maximize your ROI.

Global Reach

Leading organizations are taking a much more holistic view of the talent landscape and are looking for ways to standardize across regions. Working with a single partner for multi-country RPO eliminates the need for multiple relationships and saves time and money—while raising the quality of your hires. An RPO provider can be your most valuable partner in global expansion, because they bring a wealth of knowledge and experience gained through working with clients in different industries around the world.

Seamless Compliance

A significant aspect of recruiting is dealing with the multitude of compliance requirements that vary by jurisdiction. Your partner should help you navigate the labor laws and compliance issues that accompany any sourcing program. An RPO provider’s rigorous processes ensure a legally compliant hiring process and streamlined responses to audits. Additionally, a partner can help you anticipate any communication and training issues so that you can tackle them head-on.

What Should I Look for in an RPO Company?

If you’ve decided that RPO will be a good fit for your organization, you may be wondering how you go about choosing the best provider. Here are just three things to consider in order to make RPO a truly transformational model for your business.

Partnership

The best RPO partners understand that each company has unique needs. Look for an RPO partner that is collaborative, that will listen to your ideas and take the time to truly understand your business and pain points. Avoid providers with a one-size-fits-all approach. The right partner balances consistency with customization.

At PeopleScout, for 30 years we’ve built our services on integrity. We won’t say one thing during the sales pitch only to reset expectations after the ink is dry. We won’t make you comply with a cookie-cutter recruitment process. If we mess up, we’ll make it right. That’s why we have some of the longest running client relationships in the RPO space. 

Talent Advisory Solutions

A strong employer brand is key to recruitment success. The right RPO partner offers talent advisory solutions to develop your employer brand, EVP, recruitment marketing approaches, candidate assessments and more.

Companies often use separate agencies for recruitment marketing and RPO. This siloed approach means less accountability. The agency is less likely to be held accountable for their campaigns leading to high quality candidates entering later candidate journey stages. On the other side, the RPO partner has limited means to provide feedback on the campaigns and the impact the ads have on recruitment outcomes.

Look for an RPO with in-house expertise (not one who outsources to an external agency) to consult on your entire talent program, not just filling roles. A holistic approach attracts and hires quality candidates.

👉 Debunk common RPO myths.

Technology Acquisition Technology

HR tech is rapidly evolving, and RPO partners are well positioned to advise on tools like AI and analytics to improve recruiting. Your RPO partner should offer expertise on talent tech. Others have their own proprietary talent acquisition platforms. Look for an RPO partner who will support a modular approach, so you can continue to benefit from existing investments and grow your recruitment tech stack as your needs change.

👉 Get the most out of RPO with this podcast.

talent acquisition recruiter

What is Recruitment Process Outsourcing? The Keys to RPO Success

The most important key to successfully engaging an RPO provider for services is to have a clear understanding of what your organization is trying to achieve. Then, you can choose an RPO provider that best meets your needs.

One thing to keep in mind on your RPO journey: RPO engagements are not only about outsourcing your recruiting, they are also about finding the best partner to help manage the people, process, technology and strategy of your talent acquisition function.

There is no single best option, only the option that best aligns with your organizational needs. To determine if RPO is right for your organization, take an audit of what your organization’s specific recruitment and sourcing challenges are and if you have the internal capabilities to overcome your challenges.

Recruiting Registered Nurses for Aged Care

Posted on by akessler
Recruiting Registered Nurses for Aged Care

Aged Care Recruitment

Recruiting Registered Nurses for Aged Care

An Australian aged care provider needed to source critical healthcare roles in their most hard-to-fill locations. PeopleScout’s sourcing expertise and EVP insights helped them exceed their targets in one of the tightest candidate markets in memory.

600 + candidates screened
No drop outs occurred across the entire recruitment process
4 months to fill critical vacancies

Challenge

The client is one of Australia’s largest aged care operators, with 72 residential aged care homes in South Australia, Victoria, New South Wales and Queensland, Australia. The aged care sector in Australia is suffering from a major skills shortage as a result of the COVID-19 pandemic, international border closures and a large number of workers leaving the sector.

The aged care provider turned to PeopleScout for project recruitment process outsourcing (RPO) to support the recruitment of registered nurses and support staff across a number of critical locations where they were getting little to no response to their vacancies. 

Solution

Two senior recruitment business partners supported the client across five locations who drove passive and active recruitment for registered nurses and aged care workers. PeopleScout researched the client’s target market to understand what motivates workers in the healthcare sector to accept a role. Following this, our team provided recommendations on the lifestyle bonuses they could offer as incentives for workers to travel to their locations. We also coached the client on how to boost their employer brand to raise awareness of their opportunities, which has delivered a long-term impact within a challenging market.

Results

PeopleScout worked within the aged care provider’s existing ATS system and screened over 600 candidates. We were able to speed up the process for successful candidates and in a number of locations achieved zero dropouts throughout the screening and background check process.

Over a 4-month period, our team placed 14 permanent positions across:

  • Registered Nurses
  • Personal Care Workers
  • Hospitality Support

With a large worker exodus across the sector, recruitment in the aged care sector in Australia is still an ongoing challenge. However, PeopleScout has proven our ability to make a significant impact in a short period of time.

At a Glance

  • COMPANY
    Aged care provider
  • INDUSTRY
    Healthcare
  • PEOPLESCOUT SOLUTIONS
    Recruitment Process Outsourcing, Talent Advisory
  • ABOUT THE CLIENT
    This healthcare provider manages 72 residential aged care homes across Australia, supporting over 8,000 residents and their families at an important time in their lives.
Let’s Connect

Healthcare RPO: What to Expect from Your Prospective Partner

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For most healthcare organizations, staffing is a major operational challenge. During the COVID-19 pandemic, over 100,000 registered nurses left the field, and even several years laters, almost 800,000 nurses intend to leave the workforce by 2027 because of stress, burnout or retirement. These healthcare talent shortages and increased competition necessitate a more robust talent acquisition strategy. To overcome recruiting roadblocks, healthcare organizations can partner with a recruitment process outsourcing (RPO) partner to supplement internal recruiting teams and create sustainable talent acquisition strategies. When implemented correctly, a healthcare RPO program enhances recruiting effectiveness, attracts top talent and reduces cost, providing healthcare organizations with a competitive advantage.

In this post, we highlight six things healthcare organizations should expect from an RPO partnership.

What to Expect From Your Healthcare RPO Partnership

When you enter into an RPO partnership, you will find that a successful relationship is based on collaboration between your RPO provider and internal team, who need to work together to make the engagement a success.

Dig Deeper

How RPO Can Solve The Top Challenges In Healthcare Talent Acquisition

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Expect Seamless Integration Between Your Healthcare RPO & Internal Recruiting Teams

An ideal RPO partner should have a well-developed practice for integrating into a client’s organization and working with a client’s recruiters, hiring managers and leadership teams. During the implementation process, your healthcare RPO partner should conduct a needs assessment to understand your healthcare recruiting requirements. They will then develop a custom solution that meets the needs of your organization and business model.

Engaging an RPO partner is an opportunity to create change in the way you recruit talent across your organization. Changes in the recruiting process can include training hiring managers to be better interviewers, implementing new recruiting technology tools and establishing a unified message and employer brand.

This is the time to take the recruiting process seriously and bring attention to it internally. Your RPO partner will work with you to be an agent of change in your organization in order to successfully implement new tools and processes.

Expect Value-Added Recruiting Functions

As talent acquisition becomes more sophisticated, organizations are looking for additional services from an RPO partner such as employer branding capabilities, advanced analytics and new technology. When considering healthcare RPO partners, look for capabilities that will add value while improving your recruiting processes.

For instance, if your organization is anticipating a merger and requires a solution to swiftly ramp up your current healthcare workforce, talent acquisition services such as social media sourcing, video interviewing and recruitment marketing provide additional value by improving the candidate experience and your position in the talent market.

To determine which value-added services would most benefit you, audit your current recruiting processes and performance to identify where your in-house teams excel and where outside expertise can make a positive impact.

Expect In-Depth Program Analysis and Reporting

You should expect that your RPO partner will provide you with a complete analysis of your healthcare recruitment processes’ strengths, weaknesses and challenges.

This assessment should include:

  • Detailed process mapping before, during, and after implementation
  • Understanding gaps and opportunities within your program
  • Visibility into real-time workforce data and analytics

From this deep-dive, your RPO partner should develop customized solutions for your immediate and long-term talent needs and consult with stakeholders on ways to improve your program.

Recruiting metrics and analytics are powerful tools. When an RPO partner dives into the data, they can provide guidance on big and small recruitment changes that will lead to improved hiring metrics.

Expect Accountability and Transparency

Accountability and transparency are key factors in a successful RPO partnership. As the client, you should be able to ask your RPO partner any question you can conceive of, and in turn, your RPO partner should be able to provide you with satisfactory answers.

To ensure accountability, your RPO provider should work with you to establish mutually agreed upon Service Level Agreements (SLAs). SLAs should be established during the partner selection process, and their governance should be clearly outlined during contract negotiations.

SLAs establish how you and your RPO provider will work together and can cover items like terms, liability, billing and payment, confidentiality, solicitation, insurance, warranties and employment relationships.

Before you draft SLAs, you need to assess your recruitment performance prior to working with your RPO partner. This can prove challenging, especially if your internal recruitment processes do not track and benchmark data. If you do not have benchmarks, your healthcare RPO provider should be able to provide benchmarking data based on their work with other clients in the healthcare space.

When setting up SLAs, make sure they are realistic, achievable and meet your organization’s recruiting needs. RPO SLAs often include the following metrics:

  • Time-to-fill: Time-to-fill measures how long it takes recruiters to fill an open role.
  • Hiring manager satisfaction: You can measure hiring manager satisfaction through a survey, for example.
  • Candidate experience and satisfaction: You can conduct surveys with every candidate, not just ones who are hired, to better understand the impact of your candidate experience.
  • Interview-to-offer ratio: This metric is the ratio of the number of interviews to the number of candidates that are given an offer and can help determine the quality of candidates.
  • Diversity of candidate: This is the percentage of candidates considered or self-identified as “diverse,” and can be used to track different groups of candidates like women or veterans.

The right mix of service-level controls can help ensure a successful partnership.

Expect to Be Supplied with References

You would not hire a doctor or nurse without checking their references, and the same applies when partnering with an RPO provider. An RPO partner can always tell you about their solutions, skills and expertise. However, to get a real sense of an RPO partner’s true capabilities, you need to speak to their clients and hear success stories directly.

You should receive references from organizations that the RPO partner has worked with, ideally in the healthcare space, that have dealt with similar challenges as you, so you can really understand how the RPO has delivered effective solutions in the past. For example, if your organization is having a difficult time sourcing healthcare talent in a rural community, your RPO partner should provide you with a reference that illustrates their ability to source candidates in lean talent markets.

Expect Effective Recruiting Technology

Your RPO partner should be deploying the most current and best-in-class recruiting technologies to access and leverage data, attract and source candidates, automate recruiting processes, and screen and shortlist candidates. For instance, an RPO partner equipped with an experienced team of recruiters trained in using advanced tools and resources can use AI and predictive analytics to quickly find candidates with the skills and qualifications you’re looking for.

The right talent acquisition technology tool can also help provide a superior candidate experience, including:

  • AI-enabled sourcing tools help recruiters find the best candidates faster.
  • A streamlined application process can allow candidates apply with just one click.
  • Personalized recruitment marketing tools like chatbots, SMS messages, email campaigns and individualized landing pages provide candidates with the consumer-like experience they have come to expect online.

Healthcare RPO partners should also be able to help you quickly implement the best recruiting technologies into your talent acquisition program that can save both time and money.

Healthcare RPO from PeopleScout

Selecting the right RPO partner is a big decision for any healthcare organization and outsourcing recruitment processes can have a tremendous business impact. Your healthcare RPO partner should possess the ability to understand the capabilities and reach of the latest emerging talent tools can provide both significant costs savings and a competitive advantage and provide you access to talent, quality of hires, process efficiencies and workforce management support.

Learn more about PeopleScout’s healthcare RPO serivces by connecting with one of experts.

Securing Software Engineers for a Healthcare Tech Pioneer

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Securing Software Engineers for a Healthcare Tech Pioneer

Tech Recruiting in Healthcare

Securing Software Engineers for a Healthcare Tech Pioneer

A global healthcare technology company turned to PeopleScout to find much-needed tech talent to grow their healthcare data and analytics services.

97 % Offer Acceptance Rate
Implemented SMS Text Screening
Implemented SMS Text Screening
20 % Exceeded Submittal-to-Interview Ratio Goal by 20%

Situation 

A healthcare technology company approached PeopleScout to help with their hard-to-fill software engineering and niche technology positions. With demand for tech and digital skills on the rise across all industries, the client was struggling to fuel their business growth.  

Solution 

PeopleScout implemented a partial-cycle recruitment process outsourcing (RPO) program for the client. Our dedicated delivery team consisted of tenured recruiters who had at least five years of software engineering recruitment experience. We established a multi-channel sourcing process, screening, scheduling interviews and completing the hiring process for the client.  

The PeopleScout RPO team partnered closely with hiring managers to brainstorm creative solutions to particularly hard-to-fill roles and to provide talent intelligence and detailed compensation information that they could take back to their leadership. 

We also implemented new technology that allowed us to screen candidates via two-way SMS texting to speed up screening time, improve candidate engagement and reduce fallout. Hiring manager surveys were also rolled out to gain more feedback, and reporting and analytics were set up to measure SLAs. 

Results 

PeopleScout effectively hired candidates for the organization’s niche technology roles, while exceeding time to fill expectations. Our recruiters thoroughly sourced against the role requirements, assuring candidates met the client’s standards. As a result, 77% of hires made were externally sourced candidates, and we increased the submittal to interview ratio to 54%, exceeding our target by over 20%. The offer-acceptance rate grew to 97%, well above the industry average of 70%.  

Following this success, the RPO program expanded from roles within the U.S. to also cover recruiting tech roles in the UK and Ireland. 

At a Glance

  • COMPANY
    Healthcare technology company
  • INDUSTRY
    Technology
  • PEOPLESCOUT SOLUTIONS
    Recruitment Process Outsourcing, Affinix
  • ANNUAL HIRES
    250
  • LOCATIONS
    U.S., expanding to UK and Ireland
  • ABOUT THE CLIENT
    This healthcare technology company provides data, analytics and software for healthcare and government social services. The organization works with healthcare providers, health plans, governments and life sciences companies to get more from their health data, using artificial intelligence, data analytics, cloud computing and other advanced information technology.
Let’s Connect

Healthcare Talent Shortage: Changing Demographics, Growing Demand & Shifting Skills

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As the world of work transforms, the healthcare industry is at the epicenter of change. The industry is growing rapidly and facing a healthcare talent shortage and skills gaps. At the same time, the accelerating pace of medical and technological advancements means medical professionals must constantly adapt to new breakthroughs and changing expectations. Talent acquisition and HR professionals need to be ready to meet the growing challenge. To do so, they must understand the full picture of the healthcare talent landscape.

Is a Generational Change Creating a Healthcare Talent Shortage?

The industry is facing challenges in both supply and demand. Hospitals and Health Networks magazine calls the generational change “the most powerful force operating in our health system right now.”

On the supply side, the baby boomer generation is reaching retirement age, and according to Becker’s Hospital Review, one-third of practicing physicians are more than 55-years old and nearing retirement. Replacing doctors and surgeons who have decades of experience is challenging, as those earlier in their careers lack the years of training, education and on-the-job hours. The next generation in the workforce, Generation X, is relatively small. While the millennial generation is the largest generation in the workforce, the oldest millennials are nearly 40 years old, and some of Gen Z are too young even to start medical school. As baby boomers retire, these generations will have to fill that gap.

Dig Deeper

How RPO Can Solve The Top Challenges In Healthcare Talent Acquisition

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On the other side of this equation, the overall population is aging, with 10,000 Americans turn 65-years-old every day. Caring for an aging population will require even more healthcare professionals.

As baby boomers age, the demand for healthcare is increasing, including home health services, long-term and aged care. Chronic conditions like heart disease, diabetes, cancer are becoming more common with nearly half of the American population suffering from a chronic illness. According to a study JAMA Internal Medicine, , baby boomers have a longer lifespan but higher rates of hypertension, high cholesterol, diabetes and obesity. This means the largest generation to reach retirement age will likely also need more healthcare than any previous generation

The Healthcare Talent Shortage

The aging baby boomer generation is fueling industry growth. The healthcare industry is predicted to be the largest driver of growth in the U.S. economy through most of the next decade. Yet, most healthcare organizations continue to experience strains as the healthcare talent shortage increases. This is a multi-pronged issue driven by increased demand, retirement, burnout and a lack of new healthcare professional entering the field complicating healthcare recruitment.

And experts predict the healthcare talent shortage will only get worse. The Bureau of Labor Statistics (BLS) projects that the country will face a shortage of 195,400 nurses by the year 2031. While doctors and nurses are the most visible employees in the healthcare industry, growth in the industry will impact positions throughout the sector. An increase in patients, hospital visits and appointments will call for more support staff, like clinic support, medical technicians, billing and coding professionals and even non-clinical hospital staff like janitorial and food service.

Laboratory technicians are facing many of the same labor challenges as physicians and nurses. Many are reaching retirement age, and retirements are expected to accelerate. Replacing them will tough, as the number of students graduating from laboratory technician programs is declining.

Plus, due to a shift towards home-based care, home health aide shortages are projected to grow significantly. The BLS predicts that the number of openings for home health and personal health roles will increase 37% by 2028.

Healthcare Talent Shortage

Less visible roles are also impacted by healthcare talent shortages. The medical coding profession has been plagued for years by a shortage of coders. Job growth for the position accelerated after the implementation of the Affordable Care Act, and experts expect that growth to continue along with the rest of the industry.

A Transforming Workplace

In addition to the healthcare staffing challenges, the healthcare industry is not immune to the changes impacting organizations across the country—like the digitization of services and the growing gig economy. The healthcare industry is always experiencing change due to technological advancement, medical research and new regulations. However, to adapt to these trends, organizations will need to seek out talent in different ways and find people with new skill sets.

Use of telemedicine and virtual care expanded during COVID-19 and are continuing to rise as a way to improve access. Jobs in these types of workplaces require different technology and communication skills than more traditional hospital and clinic jobs.

While many think of the gig economy as a place for creatives or rideshare drivers, the contingent workforce is taking on a greater role in healthcare. SIA reports that hospitals are turning to contract physicians and traveling nurses to deal with the talent shortage. Some practitioners are turning to this freelance work to boost their earning potential, and the system helps increase staffing at rural healthcare facilities that struggle with healthcare recruiting.

Large hospitals are also bringing in a greater share of doctors due to consolidation within the industry. Since 2019, over 100,000 private practice doctors have transitioned into employees of larger corporate healthcare organizations. Nearly three-quarters of physicians are part of larger healthcare systems in the U.S., a record high.

A Necessary Response

To remain competitive in this challenging talent landscape, healthcare organizations must take a proactive approach to planning their workforces, sourcing and recruiting talent, retaining workers and appealing to millennials and Generation Z workers who will fill the roles of retiring baby boomers.

Areas across the United States are already feeling the impact of the healthcare talent shortage, and experts say the pressure will only grow. Organizations need to respond now to prepare. Here are some steps companies in the healthcare industry should take to manage skills shortages and how technology can help.

Ultimate Recruitment Process Outsourcing Toolkit

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Ultimate RPO Toolkit

Not sure recruitment process outsourcing (RPO) is for you? Think your organization is too small for RPO? Think outsourcing doesn’t fit your company culture?

Think again.

Our complete six-piece toolkit gives talent acquisition leaders the essential information on how RPO can boost their recruitment outcomes.

In this toolkit, you’ll get:

  • Our comprehensive buyer’s guide for RPO—everything you need to know
  • A guide for building a business case for RPO (including a free template!)
  • Conversation starters to help you create buy-in for RPO at your organization

Learn how RPO can unlock the full potential of your talent strategy. Download your kit now.

Navigating Security and Compliance Checks in Recruitment for Enhanced Efficiency and Candidate Experience

Posted on by akessler

By James Chorley, EMEA Talent Solutions Director, RPO

In an era where security and compliance checks are taking center stage in corporate priorities, it is crucial to recognize their impact on strategic recruitment campaigns. The meticulous efforts of recruitment marketing and employer value proposition (EVP) teams can easily be compromized by a convoluted recruitment process, potentially driving away top-tier candidates.

In fact, recent surveys highlight that three-quarters of job seekers abandon lengthy recruitment processes. This underscores the urgency for organizations to optimize security and compliance checks to prevent potential top-tier candidates from losing interest.

Compliance Challenges for Lean Teams in High-Volume Recruitment

Devising a recruitment strategy requires careful consideration of security and compliance checks, documentation, and candidate data requirements. While experienced recruiters navigate vetting processes adeptly, lean teams face challenges in high-volume recruitment scenarios. Establishing clear guidelines becomes essential to ensure a seamless candidate journey, preventing dropouts and optimising the recruitment process.

Case Study: Transforming the Onboarding Process at International Airport

For this major international airport, entry-level security employees undergo a comprehensive onboarding process, necessitating the submission of detailed job and address histories spanning five years before the vetting commences. When airports resumed operations post-pandemic, as the airport’s recruitment process outsourcing (RPO) partner, PeopleScout’s focus shifted to streamlining this process, ensuring swift candidate progression and minimising post-offer dropouts.

Candidate Hub Development

At the core of our candidate-focused recruitment journey was the creation of a candidate hub, featuring a unique section for individuals who had passed the initial stages of the airport application. This hub aimed to guide candidates through every step of their journey while emphasising early preparation for the extensive onboarding requirements.

Streamlining Communication

To address the issue of candidates dropping out post-offer, we sought to reduce the volume of emails and attachments. Introducing a video-led section, we enhanced inclusivity by providing a clear understanding of the process. These videos, presented by actors and co-created with the airport’s resourcing team, humanized each stage, informing candidates about what to expect and what actions were required.

Improving Accessibility and Understanding

The video-led approach not only simplified the onboarding process but also contributed to a 36% increase in the weekly volume of offers. By focusing on documentation and key information required for onboarding, candidates were equipped with clear instructions, fostering a sense of inclusivity and understanding.

Enhancing Candidate Engagement

A key objective was to ensure a welcoming candidate journey. We achieved this by implementing regular check-ins over the phone, personalized messaging, and managing individual queries. Additionally, informative webinars were conducted to provide candidates with a seamless experience.

Exceptional Candidate Feedback

The impact of our efforts was reflected in exceptional candidate feedback, with a Net Promoter Score (NPS) of plus 70. This underscored the success of our strategy in creating a more efficient, engaging, and inclusive hiring process at one of Europe’s busiest airports.

Dos and Don’ts for Managing New Hire Security Vetting Processes

To help you understand best practices for creating a friction-free vetting process while ensuring compliance, we’ve included practical tips to set clear expectations, provide context, and offer guidance, while avoiding overwhelming candidates with information.

Do:

  1. Set Clear Expectations Early: Clearly outline vetting requirements in the job ad or as part of initial pre-screen questions.
  2. Provide Context: Explain why specific checks are necessary for the role, helping candidates understand their relevance.
  3. Be Transparent about Onboarding Timelines: Inform candidates of the expected duration for the vetting process, ensuring alignment with their commitment levels.
  4. Guide Candidates: Offer advice on where candidates can obtain the necessary data, simplifying the information-gathering process.

Don’t:

  1. Overwhelm with Information: Avoid bombarding candidates with numerous emails and attachments all at once during the vetting stage.
  2. Neglect Reinforcement: Don’t go silent on candidates at this stage. Continually reinforce the reasons they applied and accepted the offer, emphasizing the value of the opportunity.
  3. Assume Uniform Understanding: Recognize that individuals process instructions differently, and provide information in a variety of formats, like bulleted lists and videos, to accommodate diverse learning styles.

Onboarding, Compliance and RPO

Crafting a considerate approach to security and compliance checks in recruitment becomes instrumental in fostering an exceptional candidate experience. Through proactive management of vetting requirements, transparent communication, and clear guidance, organizations fortify their defenses against talent loss. Even in high-volume scenarios, this approach ensures that the recruitment process remains not only efficient but also centered around the candidate’s needs.

At PeopleScout, we seamlessly integrate your go-to-market strategy with tailor-made solutions, ensuring candidates navigate the vetting process successfully. Our award-winning candidate experience solutions, combined with our renowned marketing strategies, form an ideal synergy. This powerful combination not only streamlines your pipeline but significantly enhances the efficiency of your funnel metrics.

PeopleScout Jobs Report Analysis—January 2024

Posted on by lloftus

U.S. employers added 353,000 jobs in January, nearly doubling what economist had predicted and demonstrating employers’ willingness to keep hiring to meet steady consumer spending. The unemployment rate remained flat at 3.7% despite predictions of a slight increase. Year-over-year wage growth rose to 4.5%. 

The Numbers 

353,000: U.S. employers added 353,000 jobs in January.  

3.7%: The unemployment rate remained unchanged at 3.7%.  

4.5%: Wages rose 4.5% over the past year.  

The Good 

January’s jobs report defied expectations with job growth nearly doubling forecasts, the unemployment rate holding steady and wages outpacing predictions. Experts at The Wall Street Journal also point out that while the bulk of hiring in 2023 came from just three sectors: government, healthcare, and restaurants and hotels, job gains in January broadened, with nearly two-thirds of private sector industries adding to their payroll or keeping them steady. January’s report adds to months of data showing that economic growth is remaining stable, if not accelerating. And after being hit hard by inflation, Americans are finally starting to feel better about the economy, according to a University of Michigan survey which showed a 29% improvement in consumer sentiment compared to November 2023, the biggest two-month increase since 1991.  

The Bad 

With few signs of weakness, the January report was described by many as universally positive. Yet, some analysts have argued that after such a big rally, further gains will be more difficult to come by. Further, despite markets buoying, stock gains did not extend across the entire market, with shares of smaller companies falling in general. These businesses may continue to suffer if the Fed takes longer to cut rates, which as reported by the New York Times, they are now in no hurry to do.  

The Unknown 

January jobs reports have been somewhat hard to read since the onset of the pandemic. While job gains have consistently been above economist’s expectations for the past few years, some believe that may be the result of shifts in seasonal hiring patterns, according to The Wall Street Journal. Further, recent high-profile layoffs from companies like UPS signal for some that demand for workers may cool in the coming months, but for now as reported by Bloomberg, there’s still plenty of evidence that employers are still hiring.  

Conclusion 

For months, U.S. jobs data has pointed to a gradually cooling labor market, which along with receding inflation led experts to believe the Fed would start cutting interest rates in early 2024. However, this “blockbuster” January report has turned that narrative on its head, suggesting a reacceleration that is likely to delay any rate cuts, at least for the time being.  

Ready, Set, RPO: What to Expect from a New RPO Program

Posted on by epadmin

Some companies see their RPO provider as only a vendor, but taking a partnership mindset creates a more satisfying, successful working relationship. Working well together as a united front always makes for an easier, smoother rollout with a new RPO program.

The implementation and transition phases before and after a rollout are crucial, as this is when you set the tone and expectations for all involved. It’s also when certain issues need to be addressed and configured.

Recruitment process outsourcing (RPO) has evolved significantly over the past few years. Here are some key areas talent acquisition leaders should focus on when implementing a new RPO program:

1. Identify Key Players Early in the Process

During the transition, one of the most important steps is to establish one key champion within your business. This person is your internal point of contact for RPO with the power to get things. There’s often a lengthy checklist of tasks that need to be completed before a rollout. The appointed decision-maker must be able to use their influence with HR, legal, IT and other stakeholders, including hiring managers and vice presidents, to get things accomplished.

Conversely, your RPO partner should also provide a primary point of contact who will work closely with you to navigate the implementation process. Effective communicate with your RPO contact will keep things moving forward.

Also, be sure to let your RPO team know who your internal stakeholders are (especially any unofficial ones) and how they may influence the implementation and rollout process. Loop your RPO team into conference calls and meetings so they can get a feel for the issues at hand and start building trust with stakeholders.

2. Clarify Expectations and Goals for Your RPO Program

At the beginning of your toll out, have an open discussion with your RPO provider about what success looks like for your organization today and going into the future. It may be helpful to hold a workshop to specifically determine what stakeholders want out of the RPO program and how those goals can be measured.

Define clear, measurable goals aligned to business objectives like time-to-fill, candidate quality, requisition volume, diversity and more. Both you and your RPO team must work toward, and measure against, the same goals.

If historical data on key performance indicators (KPIs) is available, now is the time to provide it to your RPO contacts so they can use the data to set a baseline for future measurements. But if this isn’t available your RPO partner should be able to help you benchmark against other organizations.

👉 Debunk common RPO myths.

3. Foster Open Communication and Trust

This cannot be overstated: communication is essential to establishing a strong working partnership with your RPO provider. The more you communicate, the better your RPO team can serve you. The RPO team should ask your stakeholders about their experience, what they want to achieve with the new engagement and what potential obstacles the team might encounter.

It’s important to be open about what is happening in the company. If something is working against the RPO process, let the team know so they can work around it. For example, if you’re not documenting things in your ATS or if HR is performing tasks expected of the hiring managers, don’t hide it. It may not be the best practice, but if it works, and everyone is aware, that’s what matters.

Remember, RPO providers can only advise you on best practices; ultimately, they are there to serve your needs. Communicate openly, and your RPO team can make the decisions that will ensure you have a positive experience. The more collaborative the partnership is, the smoother the transition will be.

rpo program

4. Invest in Change Management

A typical implementation for an enterprise, full-cycle RPO engagement is 30-60 days, with a 90-day transition period afterward. Modular RPO engagements will have much shorter timelines. No matter what RPO solution you choose, map your timelines out before beginning implementation, and stick to the timetable and deliverables. However, realize that you get just one chance to roll the process out well. Thus, you should keep your rollout date flexible enough to get the process right.

It’s also useful to set within your organization the expectation that the first 90 days of a new RPO program are a learning curve for all involved. Proactively manage change by clearly communicating process changes, providing training if needed, and getting buy-in from hiring managers and other stakeholders.

5. Identify Challenges in Your RPO Program Upfront

Don’t assume that your RPO provider knows what the potential hurdles to adoption will be at your organization. Talk about your concerns and what you see as risks. For example, if a division has historically been run by a person with a negative view of recruitment who will likely go directly to a staffing agency or circumvent the process, share this with your RPO partner.

Together, make contingency plans to address how such situations will be handled, and categorize risks by the level of fallout that may occur. Be sure to discuss what kinds of issues are considered common mistakes and what kinds of things absolutely cannot be allowed.

6. Build an Agile, Tech-Enabled RPO Program

Be prepared to work in an agile way, continuously optimizing processes and innovating together. You should work collaboratively with your RPO partner to take full advantage of the latest recruiting technologies like AI-enabled sourcing, virtual interviews, chatbots, and more. Remain flexible and adapt to changing business needs and market conditions quickly.

Technology and automation enable your RPO provider to scale talent acquisition strategically to help you remain flexible and adapt to changing business needs and market conditions quickly. Technology can create a better candidate experience, facilitate better collaboration between recruiters and hiring managers, and equip you with better analytics so you can measure ROI.

RPO has evolved into a more strategic, technology-enabled partnership. By focusing on these key areas, talent acquisition leaders can ensure their RPO engagement will deliver great talent and business impact in today’s world. Taking the time to communicate and build relationships with your RPO partner can make a huge difference in ensuring a smooth and successful rollout.

Building a Business Case for RPO

Posted on by akessler

Amidst the most turbulent labor market in recent memory, talent acquisition leaders and procurement professionals alike are turning to partners for creative, agile and adaptable solutions for their current and future talent challenges. Because recruiting touches the whole organization, stakeholders across the business will have opinions on the benefits and drawbacks of recruitment process outsourcing (RPO) as well as unique ideas about the best approach. The process to secure buy-in and budget doesn’t have to be difficult. By having a few conversations with the right people in your organization and gathering some information around current recruitment processes and costs, you can present a solid business case for RPO to your leadership team and create a path forward to an effective and resilient talent acquisition program.

In this article, we’ll arm you with the information you need to speak to different stakeholders, calculate costs and present your business case for RPO. Plus, we’ve included a free template to help you get started.

What is RPO?

First things first—what is recruitment process outsourcing? Recruitment process outsourcing, abbreviated as RPO, is a type of business process outsourcing in which an employer transfers some or all portions of the recruitment process to an external service provider. These facets may include job postings, sourcing, screening, assessments, offer management, background verifications, some onboarding elements and more.

RPO can support hiring for high volume or niche professional roles and often involves technology and talent advisory consulting—including employer branding. An RPO provider embodies the best of your culture, employer brand and values in all the activities they perform on your organization’s behalf, while integrating with your systems, processes and people. Plus, your RPO team brings new ideas, innovation and expertise to bolster your talent strategy and plans. They may sit on-site, work remotely, work offshore or a combination, and they typically take on your company name and email domain as an extension of your organization.  

👉 Get our RPO buyer’s guide.

RPO can be leveraged to augment existing in-house recruitment teams and can complement your current recruitment program by taking over recruiting for specific job groups, locations or business units. Moreover, across your enterprise, you can leverage different RPO models to maximize the benefits.

When evaluating whether RPO is right for your organization, it’s important to determine which RPO blueprint is the right one. As you speak to stakeholders, one key challenge you may run into is that stakeholders have different views on what you mean by RPO. In your business case presentation, you’ll want to compare different models—and clearly define them—in order to help the decision-making process.

Benefits of RPO

RPO engagements are not only about outsourcing your recruiting but also about finding the best partner to help manage the people, process, technology and strategy of your talent acquisition function. There is no single best option, only the option that best aligns with your organizational needs.

You should focus on finding the solution that provides the most value for your investment. RPO will create benefits that will be felt across your organization in terms of both cost and operational efficiencies.

Cost Benefits of RPO

Whether through direct or indirect cost savings, RPO can provide advantages that impact your bottom line. As you prepare your business case for RPO, here are some cost benefits to keep in mind:

  • Reduced Time-to-Fill: The longer a position goes unfilled, the more likely your business is to experience productivity loss—and loss of revenue. RPO teams find candidates and fill roles faster through talent pipelining.
  • Lower Cost-per-Hire:  RPO offers cost efficiencies by shortening hiring timelines and improving the quality of your talent, while also lowering recruitment marketing spend. By streamlining and optimizing recruitment processes, improving time-to-hire and retention rates, RPO increases your return on investment and delivers savings to your bottom line.
  • Reduced Agency Spend: A huge benefit of RPO is the reduced reliance on disparate third-party staffing agencies. By consolidating recruitment under a single partnership, you reduce agency usage and make your recruitment costs more predictable.

👉 Learn the top differences between an RPO and a staffing agency.

Operational Benefits of RPO

In addition to the cost benefits of RPO, there are operational benefits that can be felt across your business, including:

  • Elevated Role for HR: Leading RPO providers can provide labor market insights, talent intelligence and benchmarking data. With access to these insights, you have the data you need to support your workforce strategy as well as tactical business decisions. You can capitalize on the latest market analysis, thought leadership and competitive intelligence to inform your talent strategy. Your RPO partner can provide analytics to help you understand what’s working so you can maximize your ROI. Your RPO partner should also be able to give insights into how your organization is perceived as well as tactical steps to fundamentally change perceptions through your employer value proposition (EVP) and employer brand and even recruitment marketing and media purchasing services.
  • Improved Candidate Quality: As skills gaps and talent scarcity becomes more challenging, having an RPO team digging into passive sourcing to access niche skills sets will expand your talent pool and improve quality-of-hire. RPO providers leverage their comprehensive talent networks and effective screening and assessment tools to produce stronger candidates and more diverse talent pools.
  • Better Candidate Experience: You want your recruitment process to leave every applicant, regardless of whether they get the job, with a positive experience. Your RPO partner can advise on ways to improve the candidate experience including career site audits, job application recommendations and how to leverage technology to speed up the process and reduce friction.
  • Improved Hiring Manager Experience: Your RPO team reduces the administrative burden on your hiring managers by taking over résumé and CV screening, assessment administration, interview scheduling, candidate communication and feedback tasks. RPO teams prepare hiring managers for interviews, provide them with feedback and identify any candidates at risk of dropping from the process so managers can make informed decisions.
  • Diversity, Equity and Inclusion: Through experience collected over many client engagements, RPO teams are knowledgeable about enhancing your employer brand for wider audiences and expanding your talent attraction efforts to new job boards, social media groups, online forums and events to target more diverse candidates.
RPO business case

3 Steps to Building Your Business Case for RPO

RPO solutions are designed to provide transformative recruitment strategies that are flexible enough to help you achieve competitive advantage at a predictable cost. Let’s explore the steps you can take to gather the information you need for your business case.

1. Engage Internal Stakeholders

Before embarking on your business case, it’s essential to engage the right stakeholders from the beginning. Human resources (HR), procurement, hiring managers and the C-suite will all have different pain points, desires and recruitment costs impacting their budgets. Their support will be crucial for not only securing resources but for the overall success of the RPO program.

👉 Create buy-in with our conversations guide for RPO.

By understanding what each stakeholder cares about, you can show how RPO can provide the solution for their challenges. Plus, once you’ve secured budget and selected an RPO provider, these stakeholders will be more open to change to make your RPO program successful.

The goal in this step is to be able to define current pain points and desired future outcomes so you can address these issues through an RPO solution.

Here are 10 questions you can use as conversation starters to uncover your organization’s biggest challenges:

  1. Do we have the talent we need to achieve business goals now and into the future?
  2. Are we attracting quality talent with the right mix of skills, experience and cultural fit?
  3. How are we doing with our diversity, equity and inclusion (DE&I) goals? Are we attracting and hiring underrepresented candidates?
  4. Is our talent acquisition program able to respond quickly to changes in the market (i.e., easily and quickly scale up or down)?
  5. Are we providing an excellent candidate experience consistently?
  6. Are hiring managers getting the support they need to fill their vacancies?
  7. What recruitment technology are we currently using, and is it sufficient for our needs going forward?
  8. Do we have the data and insights we need to do effective workforce planning?
  9. How much are we spending annually on talent acquisition? Are we getting the best value for money?
  10. What are the differences in recruitment strategies between different countries or regions?

2. Assess Your Current Recruitment Landscape

As part of your engagement with stakeholders, it’s important to understand the current lay of the land when it comes to your talent acquisition program. You’ve got to know where you’re starting from in order to improve it.

This may seem like a straightforward question if your company has one in-house recruitment team. However, things get more complicated when there are separate in-house teams sitting in different regions who are using different processes or different local third-party agencies. Worse yet, individual departments and hiring managers may be handling their own recruitment. Ask around and get it all down on paper.

Metrics to help measure your recruitment process:

  • Applicant-to-hire ratio
  • Interview-to-offer ratio
  • Time-to-hire and time-to-fill
  • Time-in-stage or hiring velocity
  • Offer acceptance rate
  • Cost-per-vacancy

Sourcing & Attraction

Who sources candidates for your organization? What channels are you using to get in front of candidates? Are you attracting lots of active candidates, or are recruiters having to engage mostly passive candidates? What are the average costs associated with attracting active candidates versus sourcing passive candidates?

What are you doing to attract candidates to your job ads? Who manages this budget? Are you using any suppliers like creative agencies or advertising platforms (e.g., LinkedIn, Indeed, industry publications, etc.)? How are these channels performing?

Screenings, Interviews & Assessments

Beyond sourcing candidates, who reviews résumés and CVs? Who manages the interview process? How many interview or assessment steps are currently required for each role type?

Are there any delays or bottlenecks that are contributing to longer hiring cycles, poor candidate experiences or increased candidate drop-off rates?

What role is technology playing at each stage? Is there opportunity to build more automation into your processes?

Offers & Negotiation

Once you get to an offer stage, who signs off on offers? What is your offer acceptance rate? If it’s lower than you’d like, is there something about the candidate experience that’s turning them off?

Are you leveraging candidate surveys? What is your candidate Net Promoter Score (NPS)? What are your ratings on review sites like Glassdoor?

It’s also worth looking at attrition and tenure metrics to identify any issues causing new hires to leave soon after joining.

Uncovering this information will help you understand your gaps and opportunities. An RPO provider will be able to develop customized solutions to address your unique challenges.

3. Calculating the Cost of Talent Acquisition

Now that you understand what goes into your recruitment efforts, you can assess how much the overall talent acquisition program will cost to run. It’s preferrable to understand how your staffing spend has changed over the last three to five years.

Unfortunately, this isn’t as simple as asking HR for their budget details. You’ll want to incorporate both direct and indirect costs when assessing your talent acquisition program costs. Let’s break this down.

Understanding Direct Costs with Cost-per-Hire

A great place to start to understand your direct costs is with your cost-per-hire (CPH). This is the average cost you incur to hire a new employee. This includes total internal expenditures and external expenditures divided by your total number of new hires. You can calculate cost-per-hire using a monthly or annual measurement period.

cost per hire = total external costs + total internal costs / total number of hires

Internal costs include things like:

  • In-house recruiter salaries
  • Training costs for recruiters or hiring managers
  • Salary costs of time invested by hiring manager and other employees
  • Employee referral awards

External costs are any expenses incurred from external vendors, like:

  • External agency fees
  • Recruitment marketing and advertising costs
  • Assessment costs
  • Fees from drug tests and background checks
  • Technology costs
  • Hiring event and career fair spend
  • Candidate travel and lodging
  • Relocation expenses
  • Visa expenses
  • Signing bonuses

It may be useful to look into the differences in CPH for each job function, experience level, candidate source, geography and labor market. This may mean doing several calculations to capture these categories.

Keep in mind, cost-per-hire doesn’t capture quality of hire or take into account the costs of making a bad hire. If your cost-per-hire is low, but your new hires are leaving quickly or don’t pass their probationary period, is that really an advantage? On the flip side, a high cost-per-hire that brings in new employees that are engaged, productive and invested in your organization is worth the expenditure. Ultimately, your talent acquisition program shouldn’t focus solely on cost but should concentrate on creating more value for the business.

Sussing Out Indirect Recruitment Costs

There are also indirect costs around recruitment that can be more difficult to measure and present in hard numbers. These could include:

  • Loss of productivity due to vacancy
  • Cost of overtime to cover vacancies
  • Impact on employee morale
  • Customer churn
  • Knowledge loss from turnover (and subsequent training costs)
  • Reputational damage from bad candidate experiences
budget for RPO

Presenting Your Business Case for RPO

Now that you’ve gotten to the bottom of your current recruitment efforts and the associated costs, you can present the business case for the RPO models that will address your challenges. Don’t be afraid to reach out to RPO providers for help with this step. By providing them with the information you gathered in the previous steps, they can provide a breakdown of the services they offer and how they could address your unique needs.

How you go about putting your business case on paper will depend on your organizational requirements and personal preference. We recommend getting everything onto one page. This gives C-suite leadership an easy-to-digest snapshot of your recommendations. While there is often a need to present high-level decisions in hard financial terms (e.g., ROI, NPV, IRR), presenting the business case simply will also help garner expert support to create any detailed financial assessment needed. You can always link to additional documentation to back-up your presentation (e.g., a flow chart of the current hiring steps, a SWOT analysis, etc.).

Your business case one-pager should consist of the following:

  1. Options: These are the solutions you’ve identified as best at addressing the pain points you uncovered in your conversations with stakeholders. Keep in mind that staying as-is is always a viable option. It’s also essential both to include your current situation as a contrast to the new RPO models and ensure each option is adequately described (for example, in supporting documents) so decision makers understand what is being compared. 
  2. Benefits and Drawbacks: These are the positives and negatives you could gain with each option. These should be aligned to the pain points identified by your stakeholders. The risk section (see number 4 below) is the place to capture any uncertainties about the expected benefits. Cash and non-cashable savings can be highlighted here, though most should be covered in the Costs section below.
  3. Costs: This should be both the direct (monetary) costs as well as indirect costs (like investments of time) and should be profiled to cover the whole life of each option (i.e., implementation, operation, close). A leading RPO provider should offer consultation that will help you complete this section.
  4. Risks and Opportunities: By showing the risks for each option, you give leadership the confidence that you’ve explored all the issues when coming to these conclusions. It also helps everyone make more informed decisions. Risks and opportunities are not guaranteed to happen, and in all cases should be evaluated both by likelihood and by impact. They are entirely future focused, so if you have a current issue, it should be listed as a drawback (see above).
  5. Assumptions: Explaining any assumptions you’ve made while preparing this document, helps you acknowledge any possibilities that might impact recruitment plans but that are out of your control or that could change in the future. For example, you could document current plans around mergers and acquisitions or geographical expansion. If there’s anything you want to exclude from the scope of your RPO engagement, you’ll want to document this here too.  

On the next page we’ve included an example of a business case for RPO created for a client who was hoping to move away from a combination of in-house recruiters and staffing agencies to an RPO solution.

Example Business Case for RPO

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example business case for RPO

The Business Case for RPO

Going through the steps we’ve detailed in this guide will arm you with everything you need to prove that an RPO partner will create measurable value for your organization. Presenting a winning business case for RPO—that depicts the process and cost efficiencies in an easily digestible document—will help you to secure budget and buy-in and put you well on your way to achieving talent advantage.