It’s booming. It’s fading. It’s the problem. It’s the answer. If you get into a conversation about Recruitment Process Outsourcing, you may hear conflicting opinions. The truth is, everything you hear about RPO is influenced by someone’s agenda. RPO is also constantly changing and evolving It’s confusing.
Here are three observations about RPO to put things in perspective.
#1: RPO is not outsourcing
Recently, both analysts and practitioners have suggested that RPO is not really outsourcing at all. For managing the expectations about what it takes to achieve real value, this is a great point to consider.
- Agree? While RPO does entail the transfer of all or part of a company’s recruitment activity to an outside provider, the high-touch interaction and variety of forms RPO solutions take are substantially different than typical outsourced services such as background checking and payroll. The reason is simple: regardless of who owns the process, recruiting remains a strategic function that is deeply interconnected with each company’s unique business model, brand, location(s), culture and industry focus.
Because of the scope and variety of activity associated with talent acquisition, providers must be strategic partners with customers, often acting more as professional services providers than as outsourced functions. This is because RPO buyers are not just judging RPO success on traditional measures such as cost and time-to-fill. They are also judging success on how well they are competing for hard-to-find talent; the quality and performance of that talent; and how well the company’s recruiting process is evolving to stay ahead in the marketplace.
- Disagree? Today, RPO still has that “O” in the acronym for a very good reason. There are many “traditional” RPO relationships in place, where provider resources and processes work outside of the client company and are held accountable to very specific outsourced performance measures. This is often a function of geography, industry, or type of talent being targeted.
- Bottom line: RPO is becoming a more strategic function, and in many relationships the provider acts more in a professional services role. Companies that tailor their expectations to the idea that they will work with the provider to continuously evolve their recruitment function generally achieve higher levels of satisfaction than those who do not.
#2 Technology is making RPO better
The talent management technology industry continues to evolve rapidly. Niche providers emerge, grow their business, and are frequently acquired by larger enterprise providers who are striving to build their offerings into a complete integrated talent management platform, from recruiting to compensation and performance management. At the same time, these providers of larger talent management platforms are being acquired by even larger enterprise solutions providers (i.e. SAPs recent acquisition of SuccessFactors and Oracle’s recent acquisition of Taleo).
The talent acquisition side of the technology landscape continues to be extremely active, with a stream of new and compelling solutions, particularly in the area of candidate sourcing, mobile applications, e-reference checking and video. It would be easy to believe that good technology makes for good recruiting, and that the best providers must have the latest and greatest solutions in order to deliver real value.
- Agree? It is certainly true that technology is transforming the way companies approach talent acquisition. From the days when “the rolodex” really was a rolodex and newspaper wanted ads were the norm, to the rise of the one-to-many post-and-pray online job board approach, technology has changed the game. Today, the company that best applies solutions to pinpoint talent, get to know the right candidates from a sea of available information, and make the right decisions will succeed. The RPO provider that knows and uses the latest in technology solutions will be most likely to be able to provide the right strategy and support for its clients. In that respect, technology is a key ingredient to RPO success.
- Not quite true? I lean more toward caution than evangelism when it comes to talent acquisition technology. The solutions are great, and the innovation is impressive, so there’s no disagreement about the work that’s being done in the field. The skepticism—and any RPO buyer would do well to have some—comes from the fact that technology alone doesn’t make recruitment better. Any RPO provider that implies otherwise is not being 100% honest. The real value comes from having the knowledge of and access to the best tools available, and in having the people to put technology to good use. In many cases, the expertise to know that a particular technology solution, while effective, is not right for your organization is as important as all the great tools in the world.
- Bottom line: If you are exploring RPO options, make sure the provider is on top of the technology curve. It is a cost of entry, and any provider worth its salt should be able to provide an approach that’s right for you (as opposed to forcing a technology strategy on the buyer). Ultimately, however, talent acquisition remains a people business. Even when it comes to applying “big data” principles to sourcing (a top of mind focus in my organization), it’s not the data itself or the technology tools that are used that determines success. Instead, it is determined by how the people in the RPO organization put that data and those tools to work.
The RPO landscape is fundamentally changing
The landscape of most business process-related industries is always evolving, and talent acquisition is no exception. Today, there are both niche RPO providers, and several larger scale providers. In addition, there’s always the influence of M&A activity as larger organizations acquire some of the proven pure-play RPO providers (such as ADP’s acquisition of The RightThing). Much of that change goes back to point #1: many companies look to RPO to deliver beyond the traditional role of “outsourcing.”
- What’s really changed? Today, RPO buyers demand broader and more strategic capabilities from their RPO partners. This can be attributed to a general desire for strategic influence by HR and talent management leaders. It also stems from experience with “first generation” RPOs, where companies found that simply filling requisitions was just not enough. As they strive to stay ahead of the evolving demand, providers are now more likely to offer and highlight capabilities extending to workforce planning , technology consulting or employer branding. These are not new, nor should they be viewed as the formula for success. What the broad capabilities of an RPO provider do is deliver a more flexible offering that fits to an organization’s particular situation.
- What hasn’t changed? If you are considering RPO, performance and bottom-line success remain critical. If a provider offers the most advanced capabilities in the world, but it doesn’t help the company address the “right talent, right time, right cost” equation, that relationship will not last. Knowing this, RPO companies of all types, strategic enterprise players as well as smaller pure-play companies, will continue to offer solutions that track value along fundamental lines of measure: cost, speed and quality (not necessarily in that order).
- Bottom line: Industry change is a constant. Providers continue to broaden their capabilities and drive their messaging and focus beyond the RPO acronym. Nevertheless, if you are an “RPO” buyer, you are looking for services that keep you ahead of the talent acquisition curve, but also deliver on your immediate needs for fundamental measures of success.
What lies ahead?
Regardless of the varying and often conflicting perspectives on RPO, the practice and it’s solutions will continue to evolve with changing market conditions. Companies will continue to seek solutions that enable both growth and flexibility. Desirable talent will continue to be in short supply; and the marketplace, including services, solutions and technologies, will continue to innovate.
As for RPO as a practice, there will be economies of scale. There will be more flexible solutions, and there will be proven formulas for addressing certain aspects of talent acquisition. Yet, there will never be a single set of canned processes that are applicable to all companies. That’s why the value of RPO will continue to be driven by the ability to identify and meet the unique needs of the buyer. That’s good news for the providers that drive innovation, and it’s good news for the buyers that leverage RPO solutions to achieve specific business results.