Is RPO still “a thing?”
Coauthored by Tim Proehm
In a recent conversation with a thought leader in talent acquisition for a large financial institution regarding the ever-changing world of talent, the discussion turned to the benefits of recruitment process outsourcing (RPO). To our surprise, the client asked, “RPO, is that really still a thing? It sounds so 90s to me.”
Of course, if companies haven’t used RPO solutions for some years, it’s understandable that they’re not aware of how RPO has evolved. That’s why we decided to write this blog together. Not only is RPO still a viable solution in 2017 and beyond; in fact, it offers more business benefits than ever before.
RPO then and now
Back in the 90s, RPO was different for the simple reason that talent acquisition worked differently. At the time, most industries weren’t experiencing talent shortages, and technology played a much smaller role. The recruitment process was relatively structured and uniform. Recruiters would post job openings; then review the résumés they received and select the best candidates in a series of two or three interviews. Back then, RPO was typically a tactical movement of work with a long implementation cycle primarily aimed at decreasing the costs of talent acquisition for the employer.
Over the years, RPO has evolved into an agile, creative, and candidate-focused process. RPO solutions are now more outcome-based, and leverage advances in technology to improve the candidate experience, reduce cycle times, and provide operational efficiencies. Today, the decision to use RPO—whether that’s project or “surge” RPO, end-to-end RPO, or segment RPO—is a result of companies developing a workforce plan and making strategic decisions on what core functions their in-house teams should focus on, where they need to bring in external expertise, and how to scale internal talent acquisition teams quickly to meet surge hiring requirements.
One of the primary drivers of the changes in RPO is ongoing talent scarcity. There is much competition for in-demand skills. As Dr. Katherine Jones, Director of Talent Research at Mercer, highlights in her presentation “Mercer Global Talent Trends Study 2017,” 69 percent of executives believe talent scarcity is the top business challenge facing their companies today. Furthermore, 43 percent of executives and 34 percent of HR leaders worldwide report a significant increase in the competition for talent. This talent scarcity is concerning, especially considering the growing strength of and competition from emerging economies with increasingly skilled, yet lower cost, workforces.
Consequently, candidates have choices and are making decisions based on personal and professional preferences. This has resulted in a candidate’s experience and an employer’s value proposition (EVP) becoming critical elements of a candidate’s assessment of an opportunity. RPOs of today help companies shape and better communicate their EVP to appeal to the talent they want to attract and retain.
In addition, today’s recruiters have to be ever more creative in their search for talent. Rigid, inflexible, and outdated talent acquisition strategies are no longer effective. To attract the best professionals, RPO focuses not only on active talent, but also on passive talent. This requires a considerable investment of resources because it involves seeking candidates with the right qualifications, approaching them via social media and other talent communities, and establishing rapport in order to pique their interest about new job opportunities, now and in the future.
Moreover, today’s RPO helps improve the client’s digital attraction footprint. This involves understanding the candidate journey across multiple digital touchpoints and personifying that experience so it appeals to the candidate. For example, RPO can help a company determine how to create digital microsites that are tailored to a specific candidate persona’s profession and personality.
Finally, since candidates are accustomed to interacting with technology in all areas of their lives, using AI, chatbots, and advanced automation is becoming increasingly crucial to delivering an enhanced candidate experience (CX). Whether it’s chatbots that help candidates with online job applications, automated emails that keep them informed about the status of their applications, or gamification to assess their skills, candidates expect advanced technology to be part of their experience. For companies, however, the sheer volume of talent acquisition technologies can be overwhelming. RPO providers evaluate these technologies, select the most appropriate solutions, and provide the necessary expertise to install and operate them.
The business benefits of RPO
The best RPO providers help enhance their clients’ EVP and CX, as well as leverage technological solutions, in order to attract top talent. In fact, the best RPO providers become strategic partners that help their clients create and implement effective talent acquisition strategies so they can meet both their short- and long-term business goals. Today, the value of RPO should be measured by the ROI. Each element of a modernized RPO solution brings return. For example, improved CX pays off. According to Brandon Hall Group’s report titled “The True Cost of a Bad Hire,” organizations that invested in their CX stated that their quality of hires improved by more than 70 percent. Lastly, project RPOs bring agility and scalability to internal talent acquisition teams. And since agile companies are proven to outperform non-agile organizations, this can be a significant competitive advantage.
So yes, considering all of this, we believe RPO is indeed still “a thing.”