Is Recruitment Process Outsourcing the right solution for your business?
Recruitment Process Outsourcing (RPO) as a business strategy has been around for many years. Yet, there are some common misconceptions about what it is, who should use it, when is it a good option and why, and how much it costs. To answer some of these questions and provide some technical and strategic insights, we invited Peter Rusz, Head of Global RPO Solutions for SpenglerFox, for a discussion.
Peter, before we get into more detail, what is RPO?
Recruitment Process Outsourcing, or simply RPO as it is generally referred to, provides a company with professional hiring support when they need it. This is when a company outsources or transfers some or all their recruiting processes to a third-party provider.
Traditionally RPO has been a service offered by mass recruitment agencies. Why did SpenglerFox, a traditional Executive Search company, step into this space?
Let me quote our CEO, Jens Friedrich on this one:
“Over the years many of our clients, with whom we have developed strong relationships over a long period of time, required a more holistic approach from us to manage their overall strategic HR and talent management requirements. For this reason we expanded our human capital solutions to include other critical needs such as leadership advisory, interim management, talent pipelining solutions, and more recently RPO. Our RPO service is not meant to compete against what the large international recruitment agencies offer, nor are we in the business of offering mass recruitment solutions to global corporations across their global footprint. Instead, our RPO service is designed to serve clients with customized, project-based talent acquisition outsourcing to meet short to medium term needs. And this also means that our RPO service may well be complimentary to an existing multi-year, general RPO agreement”
Why should companies consider RPO?
The current state of the talent acquisition globally is perhaps the main reason why so many companies are now opting for RPO solutions instead of the more traditional “in-house” sourcing model. According to a recent study by Aptitude Research, one in three recruiters are currently looking for new jobs this year, 72% of companies still view talent acquisition as a cost centre, and recruiters are spending an average of 16 hours per week just scheduling interviews. As the talent acquisition function expands from its historic structure and role, it has become much more complex. By adding new roles to the organizational structure, new business strategies, and new technology in a short period of time, talent acquisition at many companies has become overwhelming and difficult to manage. Talent acquisition professionals feel pressure to balance multiple priorities and need more support.
I also think that being agile to provide instant extra resourcing muscle in today’s era where companies are expanding rapidly over vast geographies, is a significant benefit, if not an expectation. If we take for example private equity firms, start-ups, or unicorns, i.e., companies that are growing at an exponential rate, those companies do not usually rely on their internal teams, but instead prefer to partner with professional recruiting firms to speed up market expansion.
Are there different types of RPO?
Yes. Our RPO solutions cover two main areas, namely Enterprise RPO and Project RPO. Let me explain these in some more detail:
Enterprise RPO, or traditional RPO as it is often referred to, is an ongoing solution where we can take over and manage the entire process and provide support when our clients need it, encompassing all services involved with permanent recruitment, including recruitment technology investments. Depending on the needs of our clients, we deploy either on-site and/or off-site resources who consult with the hiring managers, process requisitions, source and screen candidates, schedule interviews, prepare and present offers, and conduct onboarding activities. This is particularly focused on productivity enablement, strong governance, the ability to improve talent pipeline speed and quality, and the provision of consulting services to improve the overall recruiting experience for applicants as well as for the business.
Project RPO on the other hand differs from traditional, full-service RPO in several ways, primarily in the key drivers and length of the engagement. Whilst a traditional RPO engagement often lasts over two years as companies look for continuous support with both tactical and strategic recruitment, Project RPO engagements most commonly last for less than six months and are driven by specific business drivers:
- Facing a sudden hiring surge,
- Reducing the time-to-fill to maximize talent sourcing efficiency,
- Market entry (new market expansion),
- Supporting high growth periods,
- In-house talent acquisition resource constraints.
RPO is often a misunderstood service. Why is that?
When considering an RPO as a potential solution to address a specific need, many companies cite that they do not have the budget, that they do not want to outsource all or part of their talent sourcing to a third party, that they are already using recruitment agencies and do not want to duplicate effort and costs, and most importantly, that they are afraid to lose control over a strategic process.
Project RPO is a cost-efficient solution. It gives organizations the ability to leverage services and expertise when they need it the most to accelerate growth and prepare for the future. Moreover, Project RPO does not require the same time and financial commitments that are associated with traditional RPO or third-party recruiting agencies. Companies with limited recruiting staff may also consider Project RPO as an alternative to hiring a team of full-time recruiters to support project or talent acquisition needs. The most important consideration perhaps is the opportunity cost of missing out on growth opportunities or being first-to-market, which far outweigh the cost of leveraging an outsourcing partner.
Project RPO is outsourcing on your own terms. The common belief is that outsourcing is only for long, complex recruiting engagements or large-scale initiatives. For companies that are hesitant to outsource their entire recruitment function, Project RPO is a good middle-ground. Their HR and talent acquisition leaders can focus on more strategic talent acquisition initiatives for the long-term and leverage the expertise of an external RPO team to achieve short-term goals. Project RPO provides the flexibility for in-house teams to improve efficiency and scale, without reducing their capacity to support ‘business-as-usual’.
Project RPO can create more control and capacity for in-house talent acquisition teams. It is a reinforcement of a company’s goals and provides support when needed to drive the leaders’ ability to enable the broader business. Companies often use Project RPO as a specific tool during times of growth and change that they otherwise would be unable to support. Project RPO does not mean replacing the in-house team. Instead, it allows companies to meet short-term demand, grow long-term capability, and acquire valuable process and technology experience whilst working with external specialists.
What is the SpenglerFox USP when it comes to RPO?
Our clients across the globe benefit from a full range of seamlessly managed human capital solutions and a global community of extraordinary talent. Working with SpenglerFox as a business partner, means that our clients enjoy all the services we offer, wherever they need us, with the quality and care that have become synonymous with the SpenglerFox brand. In short, while our clients grow their businesses, we take care of growing their talent.
We deliver flexible and specialised recruitment solutions at the right time and at the right cost to support the growth of your business. We are consistent in approaching candidates in a fair and inclusive manner, ensuring that candidates have a great pro-consumer type of business experience, from initial outreach to their start. Through our extensive network of highly trained sourcing specialists, we can spot and engage talent faster, advancing competitiveness of your brand on the market. We are here to design and build a project team when you need it, consisting of specialists in RPO, leadership advisory, executive search, or interim solutions, based on your actual needs.
(end of interview)