What is Recruiting Process Outsourcing (RPO)?
Recruiting Process Outsourcing (RPO) is an example of Business Process Outsourcing (BPO) where a business entity (e.g. public, private, non-profit/non-governmental, public service, etc.) outsources its administrative recruiting support processes to a third party provider.
Generally, an external RPO service will be an integrated as part of the overall talent acquisition supply chain in one of the following two ways:
- A white-labeled function that uses the brand, logo and image of the client organization.
- A third-party, separately branded staffing solution with a separate identity.
An RPO service provider can supply its own staff if the client organization does not have the resources; or, the RPO service provider may acquire the client organization’s existing staff (sometimes, referred to as “re-badging”). The technology, processes, procedures and reporting methodologies can also be provided by the RPO service provider or acquired from the client (sometimes referred to as, “Lift and Shift”.
There are benefits and risks in both scenarios. In either case, an RPO solution provider should be able to accommodate the needed customization to ensure an outstanding and consistent candidate experience. RPO is distinctly different from traditional staffing, contingent or retained search services; because, the RPO solution provider is accountable for the design, delivery and results of the recruitment process. Generally, the more control the client organization has over the technology, methods, processes, continuous improvement, etc., the less accountable the RPO solution provider is for results.
A Word of Caution About BPO “Lift and Shift”
(AKA, “Our Mess for Less”)
Outsourcing is Increasingly Critical to Competitive Advantage, But…
Business Process Outsourcing (BPO) alone is not a quick fix for high internal cost of operations, unacceptable quality and general poor performance. Yes, outsourcing in combination with other transformation initiatives can absolutely have a dramatically positive impact on all of these key measures; and that fact is precisely the reason why outsourcing is globally adopted for many back office functions (e.g., IT Infrastructure, Application Development, Human Resources, Payroll, Finance and Accounting, Procurement, etc.).
However, most outsourcing decisions have historically been an execution of a “Lift and Shift” approach to BPO which usually means that the client organization’s internal processes were moved from a high cost operating structure to a low cost operating structure with little or no transformation or process re-engineering improvements prior to the transition. (Didn’t someone once say that the definition of insanity is “doing the same thing over and over and expecting different results”?)
As expected, over the years many of these “Lift and Shift” outsourcing initiatives have failed to deliver world-class performance, much less competitive differentiation (for the real definition, see Michael Porter’s work, The Competitive Advantage: Creating and Sustaining Superior Performance. NY: Free Press, 1985). The initial outsourcing decision was good; but, the execution was poor because HOW the work was being performed never changed. This performance gap is widely recognized by both small- to mid-sized firms as well as multi-billion dollar publicly-traded companies with multi-million dollar outsourcing engagements.
The take-away? Corporate decision-makers need to watch out for the BPO 1.0 providers who are still fixated on being a “third party transaction processing provider” attempting to deliver on their client’s “Our Mess for Less” strategy. That approach is just a cost reduction strategy which is not a strategy.
Read More in the HfS Classic work:
Surviving the Aftermath of a Lift and Shift Transition. Horses for Sources. A. Calabrese, 2010.
“It is not necessary to change. Survival is not mandatory.”
W. Edwards Deming’s famous quote is apropos here. The failure of the BPO industry to properly advise clients on the risks of a simple “Lift and Shift” strategy has placed their survival at risk while creating a Blue Ocean environment for new market entrants with disruptive solutions which re-characterize HOW outsourced services are delivered.
P4S Consulting believes that a real BPO 2.0 service provider will provide client organizations with a strategy that offers better service delivery options such as,
GOOD: Shift and Transform
Execute a rigorous operational knowledge transfer from the Client to the Provider prior to service delivery go-live. Then, allow the Provider to transform and continuously improve HOW the services are delivered.
BETTER: Transform and Shift
Collaborate prior to service delivery go-live to synthesize the legacy knowledge from the Client with the best and future practices from the Provider to transform HOW the work will be delivered by the Provider.
BEST: Leverage Future Practice Solutions
Leverage the best and future practices from the Provider; and, allow the Provider to completely control HOW the work is performed while focusing on the critical few success metrics relative to WHAT is being delivered.
This approach to Business Process Outsourcing (BPO) is core to delivering the enhanced BPO 2.0 value proposition which is a business model which offers significantly more exceptional client value. The future of BPO is becoming a business partner in the supply chain, not just a vendor with a low-value commoditized product.
The Business Case for Recruiting Process Outsourcing (RPO)
The Pain of the Same is Likely Greater Than the Pain of Change
P4S Consulting can help customize a Recruiting Process Outsourcing (RPO) solution which addresses your unique risks and concerns. We approach all RPO outsourcing work by first conducting an as-is analysis to evaluate the current environment, assess risk, formulate action plans and prioritize the sequencing of all needed action by priority. Frequently, the as-is analysis reveals a number of risks which validate the assumption that the pain of the same is potentially significantly greater that the pain of changing for the better.
Our team will collaborate with you to consider the risks and benefits of the three Good, Better and Best BPO 2.0 scenarios to customize and implement a seamless future practice solution that delivers increased profitability, market differentiation, enhanced quality and improved client satisfaction.
If your organization is exploring any Recruiting Process Outsourcing (RPO) solution, please add us to the discussion because any solution should ultimately empower an enterprise to focus key resources and energy on core competencies and capabilities which are the real key enablers of market competitiveness, differentiation and critical to business enterprise survivability. And we can help you get there!
Key Benefits of RPO Also Include
Single Source Solutions
P4S Consulting (P4S) provides an Administrative Service Organization (ASO) RPO solution which provides businesses with a single source solution for the entire talent acquisition life cycle. In most cases, we are able to reduce costs while improving operational efficiency and quality.
Reductions in Cost of Operations
Organizations leveraging RPO models can expect to reduce and control operating expenses while shifting company focus to more important core operations. Enterprises achieve this by outsourcing recruiting administrative functions while retaining control over candidate selection. In our case, we are also uniquely capable to help you improve your part of the value stream.
Improvement in Morale and Retention
P4S can help you hire better employees, reduce turnover, and implement an effective strategy that reduces your exposure to regulatory risks and other employee claims. There are also many points of leverage in the end-to-end recruiting life cycle which can positively or negatively impact the candidate experience – which is phase one of the employee experience for all new hires.
Leadership and Experience
The leadership of P4S and its partners have a proven track record of excellence and service. Each of our teaming partners have a minimum of 15 years of experience providing business leader with innovative solutions to talent acquisition and management challenges. We bring best practices, future practices, multi-industry experience and innovation to every discussion.
Best-in-Class Industry Software
P4S will provide a uniquely configured SaaS Applicant Tracking System (ATS) – without the need to spend hundreds of thousands of dollars, if not millions, implementing and maintaining your own system. What’s more, we take on the responsibility of managing the system and implementing updates throughout the year.
Additional benefits of a turn-key RPO solution include:
- Free internal retained team to focus on core capabilities, product development, marketing, etc.
- Off-load overhead and OpEx associated with non-differentiating, non-competitive or non-strategic functions
- Lower-cost of labor expense (total cost of operations)
- Improve compliance with regulatory requirements
- Risk-sharing and risk reduction
- Take advantage of third-party capabilities and industry best practices
- Leverage best-in-class capabilities without having to cultivate and maintain them internally
- Leverage globally-accepted methods: out-tasking, fractional outsourcing, BPO, etc.
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