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RPO: Pros, cons and myths | Gattaca Solutions
Most people within HR, Talent, Recruitment or Staffing will be familiar with the term ‘Recruitment Process Outsourcing’, or ‘RPO’ in its more common form. But what actually is it? Why is it used? What are the considerations? How is it sometimes misunderstood?
What is Recruitment Process Outsourcing?
An external talent expert is engaged to deliver both the strategy and execution of Talent Acquisition (TA) on behalf of an organisation. The fundamental difference versus a recruitment agency model is that the provider embed themselves into the client’s organisation and process, go to market for candidates under the client’s brand, and for all intents and purposes the embedded RPO team are seen by the client as part of their own TA team.
Does it only apply to permanent/FTE talent?
Often yes, but it can additionally apply to contingent talent in the form or either Contingent RPO, or within a Total Talent service. Often Managed Service Programmes (MSPs) delivering contingent workers are leveraging the capability of recruitment agencies to deliver against demand. Whether these agencies are affiliated with the MSP provider or not will determine whether the model is ‘master’ or ‘neutral’ vendor. But if the provider go to market branded as the client, this model is well known in the market as Contingent RPO.
Is the term ‘RPO’ unanimously used term across the market?
No, and a key reason is that the term ‘RPO’ has very literal connotations that can be very uncomfortable for both end clients and providers. In reality, many Talent services provided by an external provider are complementary to the endeavours of the client’s own TA team. In such ‘partial’ or ‘modular’ approaches, there are very specific vacancies or TA processes that the external partner deliver, enabling the client to focus on more manageable workloads. This approach of segregating responsibilities (if done correctly) means everyone has their own role to play in partnership, to deliver pre-agreed and ongoing shared objectives.
Where does it work well?
If you are an organization that experiences volatile vacancy demand or is going through a rapid period of growth, engaging in a Project RPO enables you to augment your TA capability without having to make permanent changes to your headcount. Additionally, bringing in this external expertise means you can leverage the experience and insights of an organisation that has proven experience in delivering this service at other organisations. In secondment or embedded recruiter models, the client takes one of more ‘Recruitment Business Partner’ resources from the provider, and slots them seamlessly into their TA team to task manage as their own resource, whilst leveraging the external market insights, candidate sourcing resources and best practice the provider has to offer. This would be a good example of a partial RPO.
Whether a full or partial outsource, any service of this nature ensures all activity, talent pools, processes etc are all the intellectual property of the client, and can be brought back in house in the future. The Talent Partner can also provide a host of strategic support services including ED&I, employer brand, workforce planning, talent technology development, and marketing strategies.
When does it not work well?
Roles and responsibilities need to be really clearly defined. The service must complement the client’s existing TA strategy and not compete with it. The line between the two can be fine without careful planning and structure. What vacancies, processes or responsibilities are going to be owned by the outsource provider, and which will remain sat with the TA team? What are the criteria for success and high performance? Once these questions have been answered, the service can be designed to fulful these objectives, and hold the provider accountable for their performance.
What are the common objections to doing it?
The most common I hear is “we would be putting all our eggs in one basket”. To which my answer is “no you’re not”! Let me explain why: If you sign up a single recruitment agency to deliver all your external hiring then I agree, what do you do if they fail? Can they ever be truly accountable? But if you engage in an RPO or talent outsource model, you’re effectively investing in making your own Talent Acquisition capability greater. The service can still have a supply chain underneath it, which is effectively your ‘PSL’ if and when needed. And on top of that, you can ensure your provider is accountable for how often this supply chain is needed, via performance metrics.
Another is “we don’t want to relinquish all our control to an external provider”. That’s fully understandable, don’t! Agree and document what the provider are responsible for, and what they are not. Then hold them to account to deliver against their obligations! This way you very much retain control, whilst letting someone else do your ‘heavy lifting’ for you.
How is it commercially different to recruitment agency models?
Because this is a strategic service provision and not a transactional vacancy fulfilment model, the most common commercial approach is a hybrid model entailing a monthly management fee and a smaller transactional fee per placement. The former enables the provider to make a consistent investment into the people, processes and technologies that are core to the service, whilst the latter drives performance.
Is there more to RPO and Talent Services than we’ve covered here?
Absolutely, no two services of this nature are the same. As discussed throughout, there are so many things to consider, and definitions of success. This is not an ‘off the shelf’ product, and as such there needs to be a very considered approach to the scoping and design of any solution of this nature, followed by a structured implementation. An example of an implementation item is technology – what Applicant Tracking System (ATS) is being used? Does they client already have this, or is this to be provided by the talent partner?
If I am an HR Director, TA head of business leader considering whether to leverage external talent support, what questions should I be considering?
If you are answering ‘yes’ to any of these questions, the idea is worth exploring:
- Am I trying to build my employer brand whilst also ensuring a continual influx of critical talent?
- Does my organisation sometimes struggle with high vacancy demand?
- Is my organisation about to go through a major period of growth, and I am not able to invest immediately in additional FTE TA heads?
- Do we sometimes lack an external ‘lens’ out to the market, and some of the techniques and methods our competitors for talent are utilizing?
- Do we have particular projects or niche skillsets that continually prove a challenge to address?
- Am I unsure at the moment around my future TA strategy, but also recognise I have to deliver significant talent for my business in the short to medium term?
Myself and Graham Day are on hand to talk about your workforce strategy, if RPO is something you think might be appropriate or if another solution might be a better fit, we're happy to talk through what might benefit your team and your organisation.