Sector Report: RPOs Do More Than You Think

Companies are struggling to understand to fill high-level positions, and they are looking to their recruitment process outsourcing providers for answers.

Those answers come in the form of data, said Aberdeen analyst Zach Chertok. Companies want RPOs to provide insights into where candidates come from, what draws to the company, what engages passive candidates, and where they need to look to find better talent. “RPOs recognize that being able to deliver that data to clients is an added value,” he said.

This focus on data is emerging from the ongoing frustration recruiting managers face in filling hard-to-fill talent gaps. A 2017 report from Aberdeen showed that 80 percent of organizations have trouble recruiting high-potential talent, and 79 percent of recruiting managers don’t know how to solve their talent problems.

Companies hope RPOs can help them close these gaps — while providing advanced analytics that describe a candidate’s skills, capabilities and attitude — to ensure they are a good fit. That’s driven many RPOs to partner with assessment vendors and human capital data analytics companies to provide assessment results about candidates in a seamless package to their clients. “These partnerships require investment, but the added value they get from clients looking for these services pays for itself,” he said.

Other RPOs are integrating their own machine learning and analytics capabilities to accelerate recruiting for clients, and providing this data through adaptable dashboards and reports that link to the client’s applicant tracking system. “Clients are really interested in reporting capabilities,” said Jeanne MacDonald of Korn Ferry. Having access to data about source of hire, assessment results and screen selection placement, along with more traditional résumé information is very appealing. “Their ATS can’t give them ‘process of hiring’ data, so they get really excited when they see it.”

Beyond Hiring

The adoption of these technologies is expected to increase in the coming years as vendors respond to clients’ demands for more advanced recruiting solutions.  “Clients want RPOs to execute a lot of smoke and mirrors,” said MacDonald. And vendors are stepping up.

2018 Sector Report: Tech Gaining Foothold in RPO Space

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Vendors such as SevenStep, Korn Ferry and Alexander Mann now provide proprietary platforms that tap multiple historic and current data sets to help clients be more predictive in workforce planning, benchmarking themselves against competitors, and tap into new sources of data to screen and engage passive candidates. This is all is part of the RPO’s evolution to a strategic talent management partner, said Lamees Abourahma, executive director of the RPO Association. “RPOs are combining process, people, technology, and data to serve customers in a lot of new ways.”

Despite all of these value-added features and services, these vendors still struggle with the perception that they are merely an outsourcing service, MacDonald said. “RPOs need to be clearer about what we can deliver — and it’s a lot,” she said. She noted that many RPOs have moved beyond just filling open jobs to helping companies hone their employee brand, engaging passive candidates, building talent communities, and better managing recruiting costs. “A lot of organizations don’t even know what they spend on recruiting,” she said. “RPOs can deliver those insights.”

But she cautions clients to recognize that many of these analytics capabilities are still new. Industry experts have been talking about the benefits of artificial intelligence and machine learning for years, but these are complex technologies and their applications are evolving. “Clients have to be realistic about where these technologies fit into their recruiting process,” MacDonald said. “Paradigms don’t change overnight.”