With challenges in attracting and hiring the right talent such as getting the right profile, speed to hire to fill a position, cultural diversity and ensuring alignment to long term business objectives, it is no surprise that many organizations are now considering engaging external help. The latest Korn Ferry Talent Forecast report found that 88 percent of the respondents globally say they do work with Recruitment Process Outsourcing (RPO) partners to find talent.
RPO is the fastest growing segment in the Human Resource Outsourcing industry. US-based market intelligence company Transparency Market Research shared a report in 2015 which revealed that the Southeast Asia’s RPO market is growing at a compound annual growth rate (CAGR) of 19.3 percent from 2014 to 2020. Back in 2013, the RPO market’s value was US$45.6 million. If the report’s projected CAGR sustains its momentum, its value could go up to US$154.7 million in 2020.
The Recruitment Process Outsourcing Association defines RPO as ‘a form of business process outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external provider. RPO providers can manage the entire recruiting/hiring process, or can manage one or two aspects of the process, essentially serving as an extension of the company’s human resources department’.
Let us drill down on the types of RPO engagement model available which organizations could consider:
- Fully outsourced model – onsite recruiting team based at client site for the recruitment of all or agreed designated roles across the business. Typically, clients in this category have realized the intrinsic benefits of a RPO and focus on growing the business and leaving the recruitment activities with specialists.
- Hybrid model – client retains recruitment within either their in-house recruitment or HR team and supplements their recruiting efforts with a RPO provider to support certain role types.
- Project model – client engages an RPO provider for a specific duration or for a specific outcome to complete a recruitment project. Some examples of this engagement could be for hiring for a new business unit due to expansion, a graduate recruitment campaign or hiring for a newly set-up shared service centre.
The effectiveness of RPO can be measured easily by service levels and key performance indicators. Service levels and key performance indicators are usually made available to clients monthly to track performance. These measures are generally related to time, cost and quality of the recruitment process. An example of these could be:
- Time to Hire – measuring the time it takes from commencement of the recruitment process to candidates’ acceptance of an offer of employment
- Direct Hiring – Measuring the number of hires recruited directly by the RPO Provider, minimizing or negating recruiting through recruitment agencies.
- Hiring Manager Satisfaction – Measuring the satisfaction of the Hiring Managers with the recruitment process and outcomes
There are differences in engaging a RPO provider versus contingent recruitment. RPO provides a strategic service to an organization and is focused on improving operational efficiency and quality whilst reducing overall recruiting costs. RPO services are typically delivered as an extension of the client’s organization and focus on building relationships with candidates for the company, building pipeline of candidates for the future and providing transparency and metrics around the recruiting process that assists in building best practice. The relationship is a partnership, not a one-off transaction and the services and delivery of the services are built around the client’s specific needs.
To share an example, a multinational dairy manufacturer was expanding their operations to ASEAN and Middle East and encountered hiring challenges such as:
- Difficulty in sourcing of candidates for the various countries
- Managing cultural differences
- High reliance on recruitment agency (for around 35-60 percent of hires per market)
- No aligned messaging /employee value proposition (EVP) across the different markets
- No visibility and transparency between countries and resistance to align to one regional process
In our partnership with this multinational dairy manufacturer (to provide an end-to-end RPO solution across all contingent, blue collars, professionals, graduates and interns placement in an existing location), including setting up a newly created Global Business Services (GBS) in Malaysia, we helped the client to:
- Align processes across all countries covered under the RPO as part of the implementation creating a forum involving the stakeholders out of each country
- Implement a standardized Applicant Tracking System (ATS) platform to create valid data and visibility across the region
- Deliver a tailored Employer Value Proposition guideline, that was aligned with global standards and executed by the team onsite
- Deploy a team of recruitment partners onsite into the core markets to manage the recruitment process end-to-end exclusively
With the above engagement, we:
- Met 100 percent of Target Hiring Forecast in year 1
- Reduced time to hire from an average of 69 days (prior to the RPO engagement) to 45 days across 90 percent of the roles in year 1.
- Improved efficiency and reduced operating cost with the newly established Global Business Services centre in Malaysia with over 45 new hires
- Reduced agency usage to 6 percent across markets (down from an of average 47 percent)
In conclusion, a RPO is a business partnership that can bring great value to your organization as it helps organization align its talent acquisition initiatives to their long-term business objectives.
About Korn Ferry
Korn Ferry is recognized as the number one Recruitment Process Outsourcing Provider (RPO) provider in the 2016 Baker’s Dozen list. Published by HRO Today Magazine, the annual rankings are created following a survey of RPO buyers and industry experts. It analyzes both the quality and breadth of services offered, alongside the size of deals. Korn Ferry has been named the No. 1 provider globally, out of more than 300 providers tracked by HRO Today.