HR Administration

Establishing an Effective RPO Strategy

By Daniel Saeedi

Mar. 5, 2015

Recruitment process outsourcing is defined in the employment industry as the scenario where an employer transfers its recruiting process, whether completely or in part, to a third party. The third-party RPO provider assumes ownership of the recruiting process and manages it based on clearly defined objectives provided by the company.

RPOs became trendy in the 1990s as many companies began to expand their businesses. And, in the current post-recession period, RPOs are attractive to employers seeking to quickly replenish employment ranks, increase in size, cut long-term costs and streamline policies. RPO is a billion dollar industry and is growing fast.

For employers interested in using the RPO process, there are important considerations that must be taken into account. The answer to this question will differ based on the company’s size, geographic reach, recruiting need and budgetary situation. One reason why RPO is attractive is that outsourcing hiring can be more efficient and cost-saving in the long term. The expense of having a large internal recruiting department that must coordinate across cities (and even countries) can be saved by using an effective RPO provider.

RPO is also attractive because it can lead to highly qualified employees because of a wide recruiting net being used. And, an effective RPO process can cut down the time needed to locate, screen and ultimately hire these employees.

Providers also can help standardize hiring policies, which might be very different in various localities. RPO providers are result-oriented businesses whose main goal is to achieve the objectives set out by the company.

However, outsourcing recruiting to a provider is not without significant cost, and may not be an attractive option for smaller companies with less recruiting needs, or companies with the internal infrastructure to effectively manage recruitment. RPOs also can potentially conflict with established company cultures or habits. An RPO provider is not a solution to fix deep-standing HR problems. Pre-existing issues instead will hinder the RPO process. 

Meeting Needs

In any RPO process, companies should first identify their recruiting weaknesses and needs and craft a process with the provider to address these needs. 

And, before hiring a provider, a company should analyze its short- and long-term objectives. A provider can work with a company in the short term to achieve limited and specific hiring goals. This short-term work can even be localized to specific geographic areas. Or, a provider could be hired as part of full and long-term outsourcing, including strategy development, marketing, employee screening and interviews, negotiation and long-term data analysis. 

Companies should define expectations of an RPO provider in contractual form, known in the RPO industry as a service level agreement, or SLA. The SLA should state in detail the agreed-upon expectations and goals for a provider, and also provide that payment is contingent on the delivery of specific results, which could be numeric, geographic, industry-specific and/or research related. The SLA should also clarify the exact role that the provider will perform, whether it is full recruiting ownership or a smaller, more circumscribed role.

In addition to the SLA, company human resources managers and general counsel should remain in close contact with the provider throughout the course of the recruiting process. This close contact not only ensures results but also helps avoid ineffective use of resources and recruiting strategies that might run afoul of policies and legal standards. Only then can an RPO be effective in accomplishing the company’s recruiting goals.

Daniel R. Saeedi is an attorney at Taft, Stettinius & Hollister in Chicago. Comment below or email editors@workforce.com. Follow Workforce on Twitter at @workforcenews.

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