Contingent Workforce Solution Opens the Door to a $500K Cost Savings & a Total Talent Solution
PeopleScout helped a leading door and window manufacturer achieve a $500K cost savings within twelve months of launching an effective MSP program. Plus, PeopleScout introduced Recruiter On-Demand™ to support an increase in demand for permanent recruitment, as part of a total talent solution.
1,500Annual contingent hires
500,000Dollars in cost savings in the first year
250Full-time hires over 11 months
Situation
PeopleScout has partnered with this door and window manufacturer since 2017, providing Managed Service Provider (MSP) support for contingent talent solutions in the areas of light industrial, technology and professional roles. Initially, PeopleScout supported locations in the U.S. only, but in 2021 expanded into Canada, playing a key role in supplier vetting, contract negotiations, data collection and manager and supplier trainings.
The organization was also having challenges filling full-time roles, providing the opportunity for PeopleScout to supplement their contingent staffing support with our Recruiter On-Demand™ solution.
Solution
Over the course of this partnership, PeopleScout’s MSP team has made several technology and process improvements, including a vendor management system (VMS) transition, streamlined documentation requirements, a new approach for managing and improving supplier performance, and a candidate experience assessment.
The team also collaborated with PeopleScout’s Recruiter On-Demand™ (ROD) team to conduct a discovery session to understand the primary areas of increasing demand for full-time roles. Together, the teams developed and implemented an ROD strategy, focused on ten primary locations. The ROD solution included a daily applicant tracker for client visibility into the talent pipeline, and marketing and employer brand support. PeopleScout’s recruiters sourced qualified candidates, who were then interviewed by the client’s hiring managers.
The candidate experience assessment, conducted by PeopleScout’s technical solutions architects, identified opportunities to improve the look and feel of the organization’s careers site, particularly to appeal more to full-time candidates.
Results
The updates PeopleScout has made to the client’s technology and documentation processes have eliminated administrative burdens on both suppliers and hiring managers. The MSP solution achieved cost savings of more than $500,000 in the first year alone.
PeopleScout also seamlessly integrated a Recruiter-On-Demand™ program to support full-time hiring needs, as part of a total talent solution for the door and window manufacturer. The ROD program generated 250 hires over just 11 months across the selected 10 locations.
At a Glance
COMPANY: Door and Window Manufacturer
INDUSTRY: Manufacturing
PEOPLESCOUT SOLUTIONS: Recruitment Process Outsourcing, Managed Service Program, Total Talent
ANNUAL HIRES: 1,500 contingent hires and 250 full-time hires
Global talent solutions providing unmatched scalability to meet the professional, specialist, volume and contingent hiring needs of organizations of all sizes and sectors.
In a world where the talent market is constantly evolving, PeopleScout knows that cultivating deeper, more meaningful connections is imperative. Now, as we unveil a refreshed identity, we build on the service we’ve delivered for over 30 years, delivering more insights, more imagination and more integrity.
Connect More™ is our guiding principle. It reflects our unique approach that blends experience, insight and action to help employers build powerful connections with talent.
We’re redefining what it means to a be talent acquisition partner.
Too often we hear from clients about experiences they’ve had with other talent solutions providers in which one thing was said during the sales pitch only to have the stakes change once the ink was dry. Or times they’ve been forced into cookie-cutter processes that don’t support their unique needs.
That’s why at PeopleScout we strive to do the opposite. We believe in keeping promises. We believe that listening creates a better experience and leads to better outcomes. We’re not perfect, but if we mess up, we make it right.
We’re proud and humbled to say that this philosophy has led to some of the most enduring client relationships in the talent acquisition space—a testament to our commitment to creating connections that are truly meaningful.
PeopleScout’s refreshed brand is grounded in differentiators that drive tangible value for our clients:
Proven Delivery
For over 30 years, PeopleScout has built our services on integrity, building trust through transparent communication and a proven track record of success.
What That Means for You:
You get a talent partner like no other to help you tackle your workforce challenges—large and small. Plus, as part of the TrueBlue family of brands, we are uniquely positioned to handle complex talent programs like no other firm in the world.
Meaningful Connections
PeopleScout has the demonstrated ability to connect with the most sought-after talent. From software engineers to neonatal nurses. From Seattle to Singapore.
With one of the largest in-house talent advisory teams in the industry, we’ve got a wide range of experience with talent audiences across industries, skill sets, demographics and geographies. We are problem-solvers, creatives, organizational psychologists and operational experts.
What That Means for You:
Whether you need an award-winning candidate attraction campaign, a differentiated employer brand, market insights to fuel big decisions, a memorable candidate assessment experience or DE&I consulting—we have fresh ideas to help you stand out as an employer of choice.
Data & Insights
Sometimes you don’t know what you don’t know. We’re dedicated to arming you with the sharable, digestible insights you need to tell the right stories in your business so you can stand out and get ahead.
What That Means for You:
You can capitalize on the latest market analysis, AI tools, thought leadership and competitive intelligence to supercharge your people strategy.
Human Touch
We bring a personal touch to our engagement with passive candidates that ignites excitement about your opportunities. From the second we grab the candidate’s attention to the minute they walk through the door—we deliver a seamless candidate experience that turns applicants into advocates.
What That Means for You:
Whether you need to fill executive, leadership or niche roles our global search teams deliver top-notch, future-ready talent.
Digital Transformation
As digital transformation reaches talent acquisition, we’re helping our clients get ahead. Affinix™, PeopleScout’s proprietary talent technology suite, provides candidates with a digital-first experience and leverages AI, automation and data analytics to remove friction and improve outcomes. Plus, we’re on top of the latest tech solutions, testing new ways that AI and machine learning can create results for our clients.
What That Means for You:
You get an upgraded tech-stack that delivers a consumer-like, mobile-first experience for candidates and a frictionless, informed journey for hiring managers.
Ultimate Scalability
We’ve scaled up to handle the full-cycle, global recruitment of tens of thousands of annual hires for one of the world’s largest hotel brands. We’ve scaled down to hire a few dozen specialist engineers for an automotive start up. And we’ve handled everything in between.
What That Means for You:
Whether you need specialty, professional, volume or contingent hiring solutions—our unique blend of insight, creativity and technology creates an employer brand-steeped candidate experience talent will never forget.
Speed and Agility
In this tumultuous era, talent acquisition teams are struggling to respond quickly to sudden fluctuations and hiring peaks. That’s why we’ve created flexible solutions like Accelerate™ and Amplifiers™. Purpose-built for modern talent programs, our solutions provide employers with the agility required to compete in today’s talent market, address immediate hiring needs and deliver results faster.
What That Means for You:
You get focused support for peak hiring, hard-to-fill positions, compressed time frames and more—however it works best for you—without the lengthy implementation.
Value
Organizations of all sizes trust PeopleScout’s efficient recruiting processes and quick-deploy solutions that improve time-to-hire and retention rates, delivering the best talent matches and maximizing ROI.
What That Means for You:
We measure our every move, idea and recommendation—so you know you’re spending your budget where it matters most.
Diversity, Equity & Inclusion (DE&I)
DE&I is top of mind for talent leaders, including all of us at PeopleScout. While much progress has been made, there’s still work to be done. That’s why every PeopleScout solution has a DE&I component. PeopleScout integrates DE&I best practices into every solution, helping clients build a more diverse and inclusive workforce.
What That Means for You:
We’ll help you gain a better grasp of where you are, where you need improvement and how to find the right path forward.
Are You Ready to Elevate Your Connection with Talent?
Situation PeopleScout has partnered with this door and window manufacturer since 2017, providing Managed Service Provider (MSP) support for contingent talent solutions in the areas of light industrial, technology and professional roles. Initially, PeopleScout supported locations in the U.S. only, but in 2021 expanded into Canada, playing a key role in supplier vetting, contract negotiations, data…
Our latest research shows a detailed picture of the current state of skills in the global workforce and how HR leaders are preparing for the impending skills crisis
Artificial intelligence (AI) has captured attention across nearly every industry for its seemingly boundless potential to transform how work gets done—including AI in recruiting. Yet for many talent acquisition (TA) leaders, AI remains shrouded in hype, myths and even fear that “robot recruiters” are taking over.
This handbook sets out to demystify AI tools for recruitment with facts about real-world applications across talent acquisition capabilities and provide guidance on how talent teams can start planning to use AI effectively and ethically. We’ll cut through the hype to bring AI down to earth—focusing on what works, not what’s flashy.
The message we want to reinforce upfront is that AI should not be seen as a replacement for the talent acquisition strategy you’ve already built, but rather a set of tools to make your teams better at tasks both mundane and meaningful.
📌 Before we go any further, here’s a note from our legal team:
The information provided in this article does not, and is not intended to, constitute legal or other professional advice; instead, all information, content, and materials available in this article are for general information purposes only. Readers of this article should contact their attorney or legal advisor to obtain advice with respect to any particular legal matter. No reader of this article should act or refrain from acting on the basis of information in this article without first seeking legal advice from counsel in the relevant jurisdiction. All liability with respect to actions taken or not taken based on the contents of this article are expressly disclaimed by PeopleScout, Inc.. The content in this article is provided “as-is”, and no representations are made by PeopleScout that the content is error-free.
What is AI?
The term artificial intelligence or AI was coined by Stanford Professor John McCarthy, who defined it as “the science and engineering of making intelligent machines, especially intelligent computer programs.” AI is technology with the ability to perform tasks that would otherwise require human intelligence. Data and algorithms enable AI to “learn” how to accomplish complex tasks without being explicitly programmed to do them. It also includes the sub-fields of machine learning, speech and natural language processing and robotic process automation.
Over the last decade, AI capabilities have advanced tremendously due to increases in computing power, the abundance of digital data and improvements in machine learning algorithms. As a result, AI solutions can now match or even outperform humans in certain tasks related to object recognition, language processing, prediction modelling and more.
The disruption delivered by generative AI in particular arrived like a bullet train. In just a few short months, AI went from an abstract concept to a tangible force radically impacting businesses—and jobs—worldwide. With Generative AI (GAI) tools like ChatGPT, Google Gemini (formerly Bard) and Microsoft Copilot, AI has gone from expensive and exclusive to an everyday tool accessible by the masses.
The State of AI in Recruiting
Top talent has become increasingly scarce and competitive, while recruiting resources and budgets remain strained. This situation demands that talent acquisition teams work smarter, and AI and automation could represent an opportunity for organizations to enhance human capabilities in recruitment.
According to Gartner, a massive 81% of HR leaders have explored or implemented AI solutions to improve process efficiency within their organization. HR leaders aim to use generative AI (GAI) for improving efficiency in HR processes (63%), enhancing the employee experience (52%) and bolstering learning and development programs. Plus, 76% of HR leaders believe that if their organization does not adopt AI solutions in the next year or two, they will lag behind those that do.
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What are the Advantages and Disadvantages of AI in Recruitment?
While AI holds tremendous promise, it also comes with some real concerns which talent acquisition and HR leaders must thoughtfully address. AI is largely unregulated and has received criticism for negative impacts on things like privacy, security, bias, and transparency in its decision-making processes. However, with care and diligence, you can establish sensible guidelines at your organization, so this technology enhances your talent acquisition capabilities while respecting human values.
Benefits of AI for Recruiting
AI can help the humans behind your talent program work more efficiently and effectively when used correctly. Applying AI across the various recruiting stages introduces a host of benefits, including:
Efficiency AI-powered tools can shoulder time-consuming tasks like communications and initial screening, allowing recruiters to reach more candidates at scale. AI systems help recruiters to focus their efforts on the most promising prospects, including helping identify passive candidates. This wider reach improves quality by putting recruiters in front of more qualified candidates.
Improved Candidate Experience Tools like AI chatbots and self-scheduling create a seamless 24/7 candidate experience. By fielding frequently asked questions and coordinating interviews, they dramatically reduce time-to-hire. Candidates get quick responses instead of waiting for recruiters to come online, making the hiring process faster and frictionless.
Improved Matching Advanced AI algorithms surface qualified prospects that may have been overlooked. By analyzing candidates’ skills, experience, and other attributes and matching them to open roles, AI systems ensure better candidate-job fit. This improves quality-of-hire and unlocks hidden talent pools recruiters may have missed.
Enhanced Diversity and Inclusion With the right data to learn from, AI reduces unconscious bias from hiring by focusing decisions on data rather than gut instinct. By objectively evaluating candidates’ skills without prejudice, AI-assisted recruiting enhances diversity and creates a more equitable hiring process.
Cost Reduction AI can reduce the cost-per-applicant in some cases. Recruiters can outsource low-impact, repetitive tasks to AI, and spend more time interacting with candidates and hiring managers. This optimization of talent acquisition teams enables resources to be allocated more efficiently, reducing vacancy rates and lowering costs.
Risks of AI in Recruiting
While there are benefits, talent leaders must thoughtfully address common concerns around AI transparency, interpretation of outputs, data privacy and ethics.
PeopleScout POV
PeopleScout is committed to striking the right balance between next-generation technology and maintaining the trust we’ve built with candidates and clients. As our clients’ trusted talent advisors, we do our due diligence and work touphold our standards for quality and compliance when helping clients adopt new technologies like GenAI.
As organizations prepare to capitalize on the efficiencies of AI, they must be particularly discerning about AI when it comes to supporting people decisions. Effectively deploying and scaling AI across talent acquisition functions introduces some common challenges, including:
Biased Algorithms Despite its ability to reduce bias, if AI models are trained on biased or incomplete data sets, they can unintentionally perpetuate inequality. In many countries there are laws prohibiting discrimination in the recruitment process, and the use of AI must align with these laws. Leaders need oversight into data inputs and must remain vigilant when considering recommendations made by AI. That being said, bias in AI can be corrected much easier than bias amongst humans. Proactively monitoring and mitigating possible areas of bias is essential for driving more inclusive, equitable hiring—regardless of whether AI is involved.
Disproportionate Impact Certain demographic groups face higher exposure to the potential harms of AI in recruitment. For instance, if an AI screening system relies heavily on standardized test scores that have racial biases, it could automatically filter out qualified minority candidates. Similarly, lower income communities may lack access to the digital tools and internet connectivity required for AI screening. This digital divide could automatically exclude qualified candidates from disadvantaged backgrounds. Without proactive measures to address these systemic issues, AI recruitment tools risk amplifying real-world inequality. Organizations must consider disproportionate impact with their use of AI in order to improve diversity and reinforce equity.
Lack of Transparency Organizations may experience resistance amongst candidates and employees when there is a lack of understanding of how AI is being used in the hiring process and how AI arrives at certain outputs or recommendations. You can nurture trust through training and effective communication to help recruiters, hiring managers and applicants understand the reasons behind AI-generated outcomes and their role in the hiring decision-making process. Use clear and understandable language to describe the factors influencing decisions and put mechanisms in place to capture feedback and reporting of potential issues. Transparency promotes ethical AI use in recruitment and also reinforces organizational values and establishes a positive reputation in the industry.
Data from Pew Research Center shows that 61% of Americans are unaware that employers are currently using AI in the hiring process. A majority (71%) oppose AI making a final hiring decision, while 41% oppose AI being used to review applications. However, the more people understand about AI, the more they’re in favor of its use in the recruitment process. For example, 43% of those who’ve heard a lot about using AI in the hiring process support its use for reviewing applications, compared with 37% who’ve heard a little and 21% who’ve heard nothing at all.
Lack of Accuracy GAI is prone to making up statistics, sources and even case law—known as hallucinating. There are no safeguards in place to validate the generated content or to check the accuracy or appropriateness of the outcome. Organizations leveraging tools like ChatGPT for recruiting open themselves up to risks. Recruiters must be aware of the importance of the human touch and using their judgement when using GAI tools for creating content and communications.
Over-Automation Heavy reliance on AI also poses risks if the recruitment process becomes overly automated and fails to incorporate sound human judgment as a check. Too much automated communication can feel depersonalized to a candidate. AI should never replace the human touch—rather it should enhance human capabilities. Plus, companies using AI for recruitment must ensure compliance with all relevant regulations. For example, under GDPR, there are strict guidelines around automated decision-making, and individuals have the right to obtain human intervention and contest automated decisions that significantly affect them.
Data Privacy Issues Collecting and analyzing extensive candidate information required by AI systems can raise concerns around consent, data protection, and ethical usage. Any talent data feeding the AI systems must be compliant with regulations, like GDPR and CCPA, that are relevant to your locations. Organizations should create a framework around the usage of AI recruitment tools to provide transparency around what data you’re collecting, gain consent where applicable, and put access controls and encryption in place to protect sensitive candidate information. Your data security team should vet any AI usage to ensure candidate data is not being scraped for other uses.
Workflow Integration Implementing AI recruiting tools requires integrating them into existing systems and processes. Too often, companies adopt AI in isolation, without considering its impact on surrounding workflows. Instead, organizations should evaluate how AI technologies will interface with current infrastructure. For example, your applicant tracking system (ATS) may need API connections to import AI-screened candidates. With careful integration planning, AI can be a seamless augmentation to talent acquisition rather than an isolated add-on.
Proactively addressing these concerns through governance, oversight and continuous improvement of AI systems and processes is key to managing the risks responsibly. Overall, the use of AI in recruitment is permitted but becoming more and more tightly regulated. Systems cannot make final hiring decisions and must be transparent, fair and accountable. Adhering to data protection laws and anti-discrimination regulations is crucial for the ethical use of AI in hiring. Undergoing regular audits to assess for unintended bias and maintaining the human touch to review, override or contest automated recommendations is crucial.
📌 We recommend you consult your legal team before implementing any AI technologies at your organization.
Use Cases for AI in Recruitment
As recruiting grows more competitive, organizations are turning to smart technologies to gain an edge in attracting and engaging candidates. From chatbots to video interviews and skills assessments, AI-powered solutions are streamlining efficiencies while enabling deeper insights across the hiring funnel. Here are some examples demonstrating AI’s immense potential to boost recruiting outcomes while improving the candidate experience.
How to Use AI for Candidate Attraction and Sourcing
Identifying, contacting and engaging prospective candidates is ripe for AI augmentation. Building a robust pipeline of talent typically involves highly manual, repetitive tasks that can divert focus away from higher-value tasks. Here are some of the ways AI can support you in filling your recruitment funnel.
Building Candidate Personas
AI can pull from the profiles of existing employees and historical hiring data for a given role to surface patterns and common characteristics. These patterns, combined with qualitative data gathered from interviews, can help you to define a persona profile of the ideal candidate for the role.
A persona is a fictional character profile that represents the different types of candidates who would be successful in a role. Personas focus on individual characteristics, behaviors, interests, goals, motivators and challenges. With these in place, you can create alignment across your recruitment and sourcing strategies. Your persona profiles should provide specific guidance about how to find candidates who fit the profile, including targeted messages that will resonate.
Since launching in late 2022, ChatGPT and other GAI chatbots, like Bing Chat, Gemini (formerly Bard) and more, quickly permeated the workplace. These tools mimic human communication and can help with everything from content creation and market analysis to simply writing emails. They can also be used to write job descriptions.
By feeding them with relevant prompts that detail the job tasks and required skills as well as employer brand elements like tone of voice, the GAI chatbot can produce a first draft job description in seconds. The hiring manager and recruiter can then massage this text to create the final posting.
For existing job descriptions, AI can be used to measure sentiment and detect biased language. There are a variety of AI-powered online tools that can highlight biased language—like “ambitious” or “expert,” which are stereotypically masculine—to ensure you’re not turning off a portion of your talent audience.
Previously a manual process, AI can sift through a huge number of online profiles to find candidates with the skills you’re looking for. For example, the AI-powered Affinix CRM tool in PeopleScout’s talent acquisition suite Affinix searches millions of online profiles to find passive candidates with the skills and competencies that match the role. The AI also assesses the likelihood of a candidate being open to a new opportunity by combining the average tenure of each job listed on their profile with the average aggregate tenure of all other candidates in that same role.
Manually identifying passive candidates who have similar titles but may not be actively searching for a job can take hours of dedicated time. AI can reduce manual efforts and massively speed up the recruitment process. Plus, it helps you concentrate on skills, rather than experience, to expand your candidate pool.
Predictive Analytics
Machine learning models can also provide predictive and prescriptive hiring recommendations based on a candidate’s profile. AI can assess genuine interest, candidate motivations, likelihood to accept an offer and even predicted tenure. This empowers recruiters to be more informed for interview prep and can help them personalize outreach messages to appeal specifically to what matters most for each candidate.
Over time as engagement data is captured, AI models continue to improve, learning what messages and channels persuade candidates with various profiles and career trajectories. This creates a positive feedback loop, compounding efficiencies over each recruiting cycle.
How to Use AI for Candidate Screening & Interview Support
Manual candidate screening based on résumés and CVs alone can be an imperfect, biased exercise. With AI lending a “second pair of eyes,” you can ensure quality candidates are not being overlooked. Here are some elements of the process that AI can enhance.
First Sift
Natural language processing tools can ingest thousands of résumés and CVs, and analyze the content, context, and trends across the talent pool within seconds. AI tools can be trained to recognize specific skills, experiences and competencies that are required for open roles and then score and rank applicants automatically against your ideal candidate profile.
Look for tools with a dashboard that highlights the “cream of the crop” candidates that demonstrate the closest alignment, enabling you to reach out or pass the most promising applicants to hiring managers quickly.
Real-Time Screening
Intelligent chatbots, like text and SMS screening tools, create a conversational experience for candidates using natural language processing. These mobile-friendly, text interview tools automatically screen candidates using predetermined questions that gauge their interest and qualifications. Based on the responses, the chatbot can instantly determine the next step for each specific candidate.
AI is also leveraged for pre-employment assessments. New tech platforms can test and measure candidates for skills mastery, personality traits, and cognitive abilities to ensure qualified candidates are advancing through the recruitment process. All results should be reviewed by a human to ensure compliance with relevant regulations around automated decision-making. Leveraging AI in skills assessment helps ensure recruiters and hiring managers can focus on priority candidates most likely to succeed in the role, increasing equity along the way.
Want to learn more about how AI can boost your recruitment processes?
AI-powered candidate engagement tools help you create seamless, personalized experiences at scale—boosting candidate satisfaction, accelerating the hiring process and freeing up recruiters to focus on relationship building—where they add the most value.
Personalized Candidate Communications
For several years now, organizations have been leveraging candidate relationship management (CRM) technology to automate communications with candidates throughout the hiring journey. Automated email drip campaigns deliver the right information at the right stage in the journey to keep candidates informed of next steps and engaged with content that is relevant to them. This helps you build personalized engagement at scale.
More recently, recruiters are using GAI platforms like ChatGPT to help them with drafting one-off emails to candidates. Leveraging the appropriate prompts, a recruiter can get a first draft from ChatGPT which they can then review and edit to fit for specific candidates. This has the potential to save hours’ worth of work each week for your talent acquisition team.
Chatbots
Chatbots leverage natural language processing to manage various high-volume, repetitive inquiries from candidates. Whether answering frequently asked questions (FAQs) about application status, the interview process, the company or the job role, chatbots provide consistent, accurate responses 24/7—especially relevant when recruiters aren’t working. This improves candidate satisfaction while enabling recruiters to focus on higher-value activities.
Intelligent messaging platforms can initiate one-way communications at scale to nurture candidates. Using data on the prospect, role, process stage and more, AI writing assistants dynamically generate personalized, thoughtful messages. This level of personalization improves candidate engagement, advances candidates quicker through the funnel and strengthens employment brand affinity.
Calendar management bots can take over the time-consuming back-and-forth of scheduling interviews, assessments, site visits and more. By integrating with hiring manager calendars, only convenient time slots are shown to candidates. Candidates automatically receive confirmations and reminders, eliminating this task for recruiters and increasing the likelihood of candidates attending interviews.
How to Get Started with AI in Recruiting
Your steps into AI should focus on exploration rather than big integrations. AI in recruitment is fast-moving and receiving more and more scrutiny from law makers, and an RPO (recruitment process outsourcing) partner can act as a strategic advisor on your AI recruiting journey. RPOs have experience implementing recruitment tech like AI software for clients and can advise on the best options for your needs, integration requirements, data needs, ethical usage, and workflow design.
By leveraging RPO expertise, companies can effectively implement AI-enhanced hiring with less disruption and a faster return on investment. Look for a partner that is moving at your speed when it comes to AI in recruiting. They’ll help you identify areas for quick wins, and help you expand this success through experimentation and testing.
Here are some ways an RPO partner can help your explore AI for recruitment:
Change Management: RPOs can ease the transition to automated processes and drive adoption through training and ongoing support. They can also develop training programs to upskill your in-house recruiters on using AI tools effectively and ethically in accordance with your internal AI policies.
Process Design: RPOs can redesign recruitment workflows to integrate AI tools. For example, PeopleScout’s Talent Diagnostic examines your talent lifecycle, evaluating your employer brand and your attraction strategy, as well as looking for ways to optimize the candidate experience through technology usage.
Ongoing Optimization: RPOs can continuously monitor and evaluate AI outputs and fine-tune processes. These insights will help you improve outcomes over time.
Compliance Monitoring: RPOs stay current on regulations affecting AI in recruiting to advise on lawful and ethical usage in conjunction with your internal legal team.
AI in Recruiting: Potential and Responsibility
AI has demonstrated tremendous potential to transform talent acquisition. As this handbook outlines, it’s no longer just hype, rather it’s delivering real impact across sourcing, screening, interviewing and candidate engagement.
The results you’ll experience from AI depend heavily on factors like data quality, transparency, integration with existing systems and processes, and governance to ensure responsible usage. AI solutions are meant to augment—not replace—the human touch in recruitment. Recruiters are invaluable when it comes to relationship building, coaching and negotiation, and AI can’t replicate what makes them uniquely human.
Looking ahead, the use of AI recruiting technology to connect people to purpose will only continue expanding. Cultivating an ethical, inclusive and values-based recruiting culture remains key when it comes to attracting employees who align with your organization’s mission. With human stewardship over AI in recruiting, the future of talent acquisition looks bright.
Healthcare organizations face a number of unique recruitment challenges compared to other industries. Finding and attracting candidates with the specific clinical, medical, and administrative skills required is an ongoing battle, especially for critical roles like nurses, physicians and specialist practitioners. With a large portion of the healthcare workforce reaching retirement age, an older population demanding more healthcare services, and new technology shifting the skills needed in the healthcare workforce, a skills shortage in healthcare is growing rapidly.
Healthcare organizations must plan now for the future by undertaking comprehensive workforce planning, establishing a robust talent pipeline, focusing on retaining their current workers and appealing to the younger generations to step into those roles.
The Healthcare Talent Landscape
The healthcare industry faces an uphill battle when it comes to recruitment and staffing. A perfect storm of factors, including an aging population, workforce shortages across multiple disciplines, and a global pandemic that has stretched resources to the breaking point, has created immense challenges. Healthcare organizations must navigate a highly competitive recruitment landscape to attract and retain top talent. Additionally, new healthcare roles are emerging that require specialized skill sets, further complicating hiring efforts. In this constantly evolving climate, understanding the current healthcare recruitment landscape is crucial for organizations looking to build a strong, sustainable workforce.
Dig Deeper
How RPO Can Solve The Top Challenges In Healthcare Talent Acquisition
People are living longer, and as Baby Boomers age, the demand for health services, including home health services, long-term and aged care, is increasing. Chronic conditions like heart disease, diabetes, cancer are becoming more common with nearly half of the American population suffering from a chronic illness.
An older and sicker population is putting pressure on healthcare workers, especially those in clinical roles like nurses, physicians, health aides and therapists. Plus, demand is high for cardiovascular technologists, clinical lab technicians and other allied healthcare professionals who operate specialized equipment to diagnose and treat chronic conditions. Attracting and retaining top healthcare talent has never been more competitive, with demand increasing in both acute care and community settings, including large health systems, public health organizations, tech companies moving into healthcare, travel nursing firms, long-term care facilities, the military, healthcare research, mental health agencies, insurance and managed care companies, and even other industries.
Talent Supply Can’t Keep Up with Demand
The increase in demand seems to coincide with a healthcare talent shortage. The Bureau of Labor Statistics (BLS) projects that the country will face a shortage of 195,400 nurses by the 2031. Plus, a shift towards home-based care means the shortage of home health aides is projected to grow significantly. The BLS predicts that the number of openings for home health and personal health roles will increase 37% by 2028.
With home-based and long-term care growing, the U.S. healthcare system is also experiencing shortages for occupations like physical therapists and occupational therapists. Plus, these facilities find recruiting and retaining nursing assistants, care aides and direct care workers increasingly difficult due to low wages, demanding work and limited career advancement opportunities.
Retirement and Burnout Create Retention Issues
The challenges surrounding the skills shortage in healthcare are exacerbated by healthcare professionals exiting the workforce in droves. Experienced nurses, doctors and other clinicians are retiring and leaving patient care roles, resulting in the loss of crucial knowledge and experience for healthcare systems.
According to the American Association of Colleges of Nursing the median age of a Registered Nurse (RN) is 46 years old. Plus, more than a quarter of RNs report they plan to retire or leave nursing over the next five years. The rates of RN turnover in the United States have ticked up over recent years, growing from 17% in 2017 to 26% by 2021.
Driven by the strain of the pandemic and a shrinking workforce, many healthcare workers are experiencing burnout. According to the Medscape National Physician Burnout and Suicide Report, the average burnout rates for nurses and physicians in the US is 40%.
Burnout also has an impact on patient care. According to Nursing Times, about half of midwives say they’re afraid of making a mistake because they’re exhausted.
Innovation is Shifting the Skills Shortage in Healthcare
As care delivery models have shifted, there is a growing need for nurses and staff with specialized skills and experience. Use of telemedicine and virtual care expanded during COVID-19 and is continuing to rise as a way to improve access to healthcare. Digital disruptor Amazon recently completed an acquisition of One Medical and is now offering a new model of digital “concierge” or “membership” healthcare.
In addition, new innovations in digital health (think personal health tracking apps or wearables), med-tech, genomics, precision medicine, AI and more are transforming healthcare and shifting the necessary skills in the healthcare workforce.
Rising Labor Costs are Adding to the Strain on Healthcare Organizations
With nationwide labor shortages and inflation, healthcare organizations face rising costs for salaries, benefits and contract staffing. In all industries, workers are requiring more competitive compensation, benefits and perks to be enticed. This puts a particular strain on healthcare organizations where staffing is literally a matter of life and death.
High turnover among certified nursing assistants drives up costs for long-term care facilities and impacts quality of care. In order to keep high patient care standards and staff shortages, the U.S. healthcare system relies heavily on costly contract and travel nurses and other providers which further drives up labor costs for hospitals. In fact, contract labor expenses have risen more than 250% over the past three years.
Addressing the Skills Shortage in Healthcare
Addressing the skills shortage in healthcare requires a multi-pronged approach—improving workforce planning, enhancing recruitment and retention efforts, and elevating the perception of healthcare careers for the next generation.
Workforce Planning
To effectively respond to the changing healthcare talent landscape, organizations must take proactive steps to plan for their future needs. The future will look different for every organization. Healthcare organizations in Florida and the Southwest, where there are large numbers of retirees, will have different staffing needs than organizations in trendy urban areas in the Pacific Northwest or East Coast where the population tends to be younger and healthier. Region also makes a difference in attracting candidates, as rural health systems are already struggling to fill positions. Healthcare organizations should know what their needs will be in the coming years and what challenges they’ll face attracting workers.
Data analytics is a valuable tool for workforce planning. The American Hospital Association recommends that organizations analyze data including current workforce demographics, potential future workforce requirements, and factors impacting the data, like the increasing popularity of walk-in clinics, telehealth services and digital healthcare models. Predictive and prescriptive analytics tools can help healthcare organizations plan for future needs and evaluate how different decisions will impact those hiring needs. According to SHRM, this type of workforce planning can save money by eliminating issues with understaffing and overstaffing. Predictions can provide organizations with a clearer view of how and when different talent gaps will impact them. Armed with that information, healthcare organizations can make informed decisions when it comes to forming partnerships, increasing retention and reaching out to younger workers.
Building Talent Pipelines
A key strategy for combating the the skills shortage in healthcare will be convincing more people to enter the healthcare industry. Too often, HR leaders at organizations only think of potential candidates through a narrow lens. They focus on the people who already work in the industry and who already have the education and skills to be a nurse, medical technician or phlebotomist. There aren’t enough people already in those pipelines to fill the talent gap. Healthcare organizations need to think broad and start focusing on the young people who are considering a career in healthcare. They need to start marketing to these candidates earlier than ever before.
The American Hospital Association recommends that healthcare organizations establish community pipelines by partnering with high schools, colleges and other academic institutions. Through these partnerships, healthcare organizations can start engaging with future candidates earlier than ever and help drive young people to the healthcare industry. Partnerships can also create more candidates in a geographical region with a specific set of skills. According to the American Association of Colleges of Nursing, a partnership in Minnesota between the University of Minnesota and the VA Healthcare system helped expand enrollment in the university’s nursing program and increased the program’s focus on veteran care. The program ensures more graduates in Minnesota with the skills necessary to care for veterans. Healthcare organizations should form these partnerships strategically, using their workforce planning predictions to understand which types of positions will have the greatest demand and where these partnerships can have the biggest impact.
Focusing on Retention
HR leaders at healthcare organizations are grappling with the stresses the skills shortage in healthcare is creating for their current employees . Understaffing creates larger workloads and longer hours. According to CareerBuilder, 70% of nurses say they feel burnt out in their current job and more than half rate their stress level as “high.” According to Medscape, only 56% of nurses would choose their career if they had a chance to start over again. If current health care workers are stressed, burned out and regretting their career choice, that could harm the talent pipeline. Healthcare organizations cannot afford to lose younger nurses due to stress or burnout.
Healthcare organizations will have to face the challenges of burnout head on to retain their workers. Healthcare Dive offers tips for ways HR professionals can help, including making your staff aware of the signs of burnout and teaching self-care strategies. Wellness among the healthcare workforce must be a priority. Some healthcare organizations have created quiet rooms stocked with yoga mats and massage chairs where nurses can go during their shifts to take a break. CareerBuilder recommends offering a flexible work environment, encouraging exercise, establishing an open-door policy, offering mental health tools and focusing on continued education.
While an expensive option, contract healthcare providers can also help ease the burden on understaff facilities. PRN, or “pro re nata,” positions are growing in popularity throughout the entire healthcare industry. The positions are typically part-time, as needed, and many healthcare workers are turning to these roles for the flexibility, rather than taking full-time positions. Healthcare organizations can use PRN workers to cover understaffed shifts, which can lift some of the burden on permanent employees.
Appealing to Younger Workers
Healthcare organizations are competing for the best of the limited talent pool. To succeed in attracting candidates, healthcare organizations must build a strong employer brand and meet the needs of millennial and Generation Z workers.
What do millennials want? Countless writers have tried to answer that question, but Harvard Business Review reports millennials aren’t necessarily all that different from older generations. They want good managers, interesting work and the opportunity to learn and grow. Like many other generations, they want to make a positive impact and help solve social and environmental challenges. By its nature, a career in healthcare can provide that. One thing that does set millennials apart from earlier generations is an increased debt burden due to higher education costs. Some financial experts recommend that organizations consider new benefits packages that offer student debt repayment to lure millennial workers.
As for Generation Z, the oldest members are just starting to enter the workforce, but experts say to be prepared for a cohort of workers well versed in technology. According to Forbes, in addition to being technologically savvy, members of Gen Z are also entrepreneurial and serious-minded after watching the impact of the Great Recession, so organizations should expect creativity and offer continuing educational opportunities. Harvard Business Review recommends reaching Gen Z candidates where they are—on mobile devices. Authenticity and personalization are also important to this segment of the workforce, as they’ve grown up bombarded with personalized advertisements online.
Engaging an Expert to Tackle the Skills Shortage in Healthcare
As they work to manage the growing skills shortage in healthcare, healthcare organizations are turning to experts in healthcare RPO, MSP and Total Workforce Solutions for healthcare staffing support. As you plan for the future, a talent partner can help provide a view of the whole talent spectrum, finding the right mix of both full-time and contingent workers. As the gig economy grows in popularity and more healthcare workers turn to contingent work, a talent acquisition partner can also ensure compliance on legal issues. Healthcare organizations should seek out partners with the right experience to tackle the specific needs of the industry.
A partner with a depth of data analytics experience can help develop a unique plan that addresses the needs, region and demographics of your individual healthcare organization. Data expertise can also help organizations determine why current employees leave and predict which changes could make the biggest differences in employee retention.
Healthcare organizations should also look for a partner with strong experience in building candidate-centered application processes and employer branding. As healthcare organizations compete for talent, a candidate-centered process and strong employer brand will help bring in the millennial and Gen Z workers.
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.
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.
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.
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.
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.
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:
Do we have the talent we need to achieve business goals now and into the future?
Are we attracting quality talent with the right mix of skills, experience and cultural fit?
How are we doing with our diversity, equity and inclusion (DE&I) goals? Are we attracting and hiring underrepresented candidates?
Is our talent acquisition program able to respond quickly to changes in the market (i.e., easily and quickly scale up or down)?
Are we providing an excellent candidate experience consistently?
Are hiring managers getting the support they need to fill their vacancies?
What recruitment technology are we currently using, and is it sufficient for our needs going forward?
Do we have the data and insights we need to do effective workforce planning?
How much are we spending annually on talent acquisition? Are we getting the best value for money?
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.
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
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:
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.
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.
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.
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).
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.
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.
By Simon Wright, Global Head of Talent Advisory Consulting
The workforce skills landscape is transforming at blinding speed. Automation, AI, sustainability initiatives, demographic shifts—global forces are conspiring to make skills gaps and talent shortages more acute by the day. Don’t think it’s moving that fast? Well, the World Economic Forum predicts that a jaw-dropping 85 million jobs could sit vacant by 2030, resulting in $8.5 trillion in lost revenue.
The very meaning of “skills” is shifting beneath our feet. Skills requirements have already changed 25% since 2015, and experts forecast 65% more change by 2030. However, companies still rely heavily on degrees and experience over skills when it comes to making hiring decisions. No wonder we’re careening towards a global skills crisis.
PeopleScout partnered with skills-based workforce management platform provider Spotted Zebra to survey over 100 senior HR and talent acquisition leaders globally, plus over 2,000 employees worldwide, to compare perspectives. Our new research report, The Skills Crisis Countdown, maps the skills landscape and diagnoses the disconnects between employers and their workforce.
Read on for some key findings from our report.
HR Leaders are Ill-Prepared for the Skills Crisis
According to a study by PwC, 40% of global CEOs believe their business will be economically unviable in 10 years unless they reinvent for the future. Our study revealed that nine out of 10 HR leaders believe that up to 50% of their workforce will require new skills to effectively perform their job in the next five years. Yet, when asked if they are currently undergoing or planning a workforce transformation initiative in the next three years, nearly half (45%) of HR leaders admit to having no plans to undertake one.
So, in other words, half of employees will soon be underprepared for the future, but most companies have no strategy in place to address the issue.
According to LinkedIn, 84% of members are in occupations that could have at least one quarter of their core skills affected by generative AI (GAI) technologies, like ChatGPT. So, how are HR leaders preparing for this digital transformation and the AI era? Shockingly, a full third (34%) say they have no preparations in place to prepare for new technologies. Those who are preparing emphasize bringing in outside talent rather than reskilling existing employees.
Industry Composition by GAI Segment Percentage of LinkedIn Members by Industry
(Source: LinkedIn Economic Graph Research Institute)
This is likely because they lack an understanding of the skills they have within their existing workforce. Our data revealed that 68% of organizations identify skills from manager feedback, which is highly subjective. So, it’s no surprise that 56% of employees think their skills are underutilized in their current roles, and 61% think there are other roles in their organization where their skills could be utilized.
An unprecedented skills revolution is barreling down the tracks, but companies are fast asleep at the switch. It’s time to wake up and get employees future-ready or risk a global skills crisis and talent scarcity for decades to come.
Digital & Tech Skills Gaps are Widening but Tech Skills are Viewed as Unimportant
Both employers and employees dangerously underestimate the importance of tech and digital skills. In our survey, both parties listed tech and digital literacy skills with low importance. With the skyrocketing demand for tech and digital talent, this does not bode well.
Mobile apps, ecommerce and digital transformation have made technology integral to every corporate strategy. However, supply isn’t keeping up with demand. McKinsey analyzed 3.5 million job postings in high-tech fields and found there’s a wide divide between the demand for tech and digital skills and the qualified talent availability. The most sought-after skills have less than half as many qualified professionals per posting compared to average global figures.
No wonder 63% of HR leaders in our survey admit they struggle to recruit the skills they need. Closing tech and digital skills gaps through recruitment alone is no longer sufficient. So, we were concerned when our research showed that 73% of the workforce haven’t been offered opportunities to reskill.
Organizations must invest in helping their employees evolve their skills via reskilling and internal mobility to cultivate digital and tech literacy across their entire workforce.
Case Study: Reskilling in Action
The Challenge:
A large global financial services company needed to undertake a major digital transformation program. The organization needed to acquire key digital and tech skills while leveraging the existing company knowledge of employees in declining customer service roles by reskilling them.
Previous efforts by the organization to assess employees’ suitability for reskilling were led internally and included multiple, time-consuming line manager interviews. Of even greater concern, around a quarter of those who began the reskilling program dropped out.
The Solution:
The bank worked with their long-time RPO partner, PeopleScout, and Spotted Zebra to assess customer service staff in bank branches and call centers to find ideal candidates for its tech and digital skilling program. Skills profiles were created for tech roles, which employees were assessed against to find the best fit.
The Results:
Redeployed 150 people, saving over $2.5M in exit costs
Saved over $350,000 in training and development costs
Reduced time investment by hiring managers
Reduced the reskilling cost-per-person by 70%
Employees Don’t Feel Confident in their Skills for the Future
A third (34%) of workers have doubts about how their skills will keep pace with new technology and automation. Meanwhile, just 17% of organizations are offering targeted reskilling programs for existing employees.
Where are HR Leaders Deploying Skills-Based Practices?
(Source: PeopleScout and Spotted Zebra)
This imbalance spells disaster. As change overwhelms existing skill sets, most workers will begin to feel unsure of their career paths or left struggling to stay relevant.
Investing in reskilling makes solid business sense. We must bridge the gap between workers anxiously facing uncertainty and leaders failing to invest in their resilience. HR leaders who empower their workforce with adaptable skill sets today will drive continued success in times of swift and sweeping change.
Finding a Talent Partner to Support Your Skills Transformation
The agility to match emerging skill requirements will soon become a competitive necessity. If you haven’t started your skills-based transformation, now is the time.
In our survey, one in two HR leaders admitted to a lack of understanding of skills-based practices. If you’re struggling to understand how to take advantage of skills-based practices in your organization, PeopleScout is here to be your guide.
As a recruitment process outsourcing (RPO) partner, we can help you understand the skills within your existing workforce as well as the external market supply and demand. We offer solutions across the skills agenda, from skills-based talent intelligence and market insights, building skills frameworks, and creating skills-based success profiles to redesigning recruitment processes, skills-based hiring strategies, and helping you maximize the potential of your existing workforce.
To learn more about PeopleScout’s skills-focused talent solutions, get in touch.
The Skills Crisis Countdown: The Clock is Ticking on Tackling Skills Gaps
Our latest research reveals, nine in 10 HR leaders believe that up to 50% of their workforce will need new skills to perform their jobs in the next 5 years. Yet, only 7% say they are actively investing in reskilling programs, and 45% admit to having no plans to undertake a workforce transformation initiative to prepare for the changing skills landscape.
PeopleScout partnered with skills-based workforce management company Spotted Zebra to survey over 100 senior Human Resources and Talent Acquisition leaders from organizations around the global and 2,000+ employees globally to compare perspectives on workforce skills. The resulting research report, The Skills Crisis Countdown: The Clock is Ticking on Tackling Skills Gaps, provides a detailed picture of the current skills landscape and the disconnects between the perspectives of employees and businesses.
Download our free report for the latest research exploring:
The current state of skills in the global workforce and outlook for the future
How HR leaders are preparing for the impending skills crisis
How employees expect their skills will need to adapt to new technology or automation.
Plus, you’ll get a roadmap of actionable steps to help your organization become more skills-centric.
