The new RPO paradigm: Flexibility and scale

By Michael Beygelman

Recruitment Process Outsourcing (RPO), a subset of HR Outsourcing (HRO), is a form of outsourcing whereby an organization engages a third party service provider to take over all or part of their in-house recruitment processes for full-time or part-time employees. RPO service providers could take on processes like job posting, applicant tracking system administration, screening, interviewing, candidate data processing, recruitment administration, OFCCP compliance, or nearly entire recruitment value chains. For the most part, these have been the core activities that fostered a competitive environment in the world of RPO up until 2010. However, this is all about change as a new era of demand emerges - the demand for flexibility and scale.

Almost as swiftly as RPO adoption grew with companies large and small, the RPO paradigm has suddenly shifted going into 2010. Ability to provide change and process improvement around core RPO services has nearly become table stakes. It is now assumed that an RPO provider can help their customers achieve a better, bigger, smaller, faster, cheaper past. After all, that's what change is - taking something that already exists and making a little better or a little faster or a little smaller. Transformation, on the other hand, should not be confused with change. Change says, "Today I have a car that gets 20 miles per gallon, but tomorrow I'd like to have a car that can get 60 miles per gallon using part gas, part electricity."  Transformation says, "Today I have car that gets 20 miles per gallon, but tomorrow I'd like to have transportation without propulsion."  Exactly what caused RPO to so suddenly enter its transformation cycle can be debated, but the fact that RPO is going through a transformation cycle is evidenced by RPO industry consolidation, service offering maturity and innovation, and unprecedented high customer satisfaction among RPO adopters.

Generically speaking, RPO service offerings have been evolving into three silos of provider specialization:

• Firms that provide workers - staff that you control, direct, and manage. This staff can be located at your site, or they can be off-site or working from their homes. This would include people like recruiters, sourcers, recruitment administration support, researchers, and consultants. Before being called RPO, this used to be called contract recruiting or staffing, and it typically augments your in-house staff.
• Firms that provide services - not staff. This means that you give them a statement of work or a task order and they do the work on an ongoing basis. They use their workers to do the work, which you neither direct nor manage. In the marketplace this form of RPO is called outsourcing, and it typically involves transitioning activity or transforming the process, or both.
• Firms that can manage staffing vendors, recruit consultants, contractors, or temps, and payroll them, and also provide recruitment consultants to perform administration of existing permanent recruitment processes. In the marketplace this form of RPO is sometimes called managed services, and it typically involves more management of staffing vendors, processes, and third party vendor spend rather than actual direct sourcing or recruitment.

In addition to the above specialization areas, other differentiators include things like global footprint, tools and technologies, or specific industry vertical knowledge.

Today hosts of in-shore, near-shore, and off-shore staffing companies are trying to re-brand to some flavor of RPO because they perceive RPO to be the latest and greatest staffing buzzword. When a staffing company looks at real RPO's recruitment center of excellence (RCE), it would say, "That's the staffing branch of the future" and would set out to build a 10,000 square foot facility that will house hundreds of full lifecycle recruiters. However, an RPO firm's RCE is not a staffing branch of the future because it represents a different way of delivering recruitment as a service, it the difference between change and transformation. Change always references the past - so they will build a bigger, better, faster branch, which will not impact anything other than aesthetics. They will simply have 100 recruiters in one branch instead of 5 recruiters in one branch. This is neither transformation, nor the kind of scalability nor flexibility that enterprise organizations are seeking from RPO providers. Simply adding full lifecycle seats at their branch of the future might be effective but it is not flexible nor is very efficient - 100% of the cost of 1 person to do 25% of the work is not the answer.

On the other hand transformational improvements offer organizations flexibility and scalability on demand. For example, instead of having a team of 8 full time recruiters doing interview scheduling an organization can develop full integrated interview self-scheduling technology that requires 1 or 2 recruitment coordinators to administer the function. While it might require some tools, technologies, and new business processes with governance, once developed, this type of interview scheduling methodology can work to schedule 300 candidate interviews with hiring managers or 30,000; it is both effective and efficient, scalable and flexible, and squarely aligned with the new paradigm developing in RPO.

There is a vast difference between an RPO provider and RPO services. Any firm with recruiters, job boards and databases, fancy sales collateral, and impressive looking implementation project plans can purport to provide RPO services. This doesn't make them an RPO firm, however, which can provide real flexible and scalable outsourced recruitment services because a real RPO firm can deliver recruitment in an entirely different way. An RPO firm is organized in an entirely different way - Researchers, Sources, Screeners, Recruiters, Coordinators, etc. - in order to achieve flexibility and scalability that is necessary to support variability in enterprise hiring needs, and this new organizational paradigm is supported by enabling technology. Organizations should be mindful of the RPO "veneer," and perform proper due diligence to understand their partner's true capabilities to offer scalability and flexibility.

Michael Beygelman is Senior Vice President at Adecco North America, where he heads up RPO for the world's largest workforce solutions provider. He can be reached at michael.beygelman@adeccona.com.