RPOs Are Winning the Talent War

By Sarah Fister Gale

Jan. 21, 2020

The ongoing talent shortage has been a boon for recruitment process outsourcing firms. Business leaders are increasingly frustrated by their inability to find and keep talent, and they are turning to RPOs for help, said Zach Chertok, an analyst for Aberdeen. They see these vendors as a possible solution to help them figure out what they are doing wrong. “It’s giving RPOs a competitive advantage.”

It’s also helping them expand their perceived value proposition. Where RPOs were once a niche solution, or even a last resort, Chertok’s research shows more companies are turning to RPOs sooner as they think more strategically about talent acquisition.

Jeanne MacDonald, president for global RPO solutions at Korn Ferry, agreed. “It used to be, ‘Here’s the job description, find the right person,’ ” she said.

But now clients are turning to RPOs for advice on how to build the talent brand, market the company and link recruiting strategies to broader workforce development goals, she said. “It’s becoming much more strategic.”

Long-term KPIs

RPOs still struggle with getting access to the right stakeholders to demonstrate this strategic value proposition. Chertok noted that RPOs often work with recruiting or talent acquisition teams who still track talent acquisition through near-term key performance indicators, or KPIs, like days to fill an open position and cost per hire.

“To demonstrate their business value, RPOs have to connect what they do to the HR strategy and what the business is trying to achieve,” he said.

To do that, they need to link their work to long-term KPIs, including retention, performance and the business value their candidates bring to the company. These measures take more time to collect, but they connect RPOs to business strategy, he said.

They also have to provide a more strategic toolkit, said Stacey Cadigan partner for Information Services Group, a market intelligence firm. Clients today expect RPOs to provide user experience consulting, recruitment marketing, business intelligence, data visualization and advice on the tech stack, she said. “These are no longer value-add services. They’ve become the expectation.”

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That’s driving RPO vendors to invest more in automation and data analytics tools ranging from candidate-facing chatbots and automated scheduling to workforce forecasting and dashboards that showcase ongoing talent acquisition and performance metrics. With these tools RPOs can move beyond individual hires to help companies create a more sustainable workforce, Cadigan said. “It’s less tactical and more strategic.”

A Total Talent Solution

The investments they are making in technology are also helping RPOs expand their offerings to accommodate a broader range of candidates, said MacDonald. In the last year, she has seen an uptick in clients using RPOs to fill entry-level positions, including clerks, clerical workers, retail and light manufacturing.

“Historically that’s been a tough area for RPOs because humans did all the recruiting,” she said. But advances in smart searching tools, chatbots, day-in-the-life simulations and other automated systems have lessened the human burden, freeing RPO recruiters to focus on relationship building. For example, Korn Ferry recently rolled out “Juno,” a recruiting chatbot that communicates with candidates and helps set interviews and answer questions. MacDonald said the interface is so realistic many candidates expect to meet Juno when they come to interviews. “They think she’s a person.”

The technology is making RPOs more competitive with traditional recruiting firms. Though as with all technology, RPOs have to prove these tools add strategic value to the business and are not just fun new tools to play with. The key is working with clients as an adviser and problem-solver.

“You can’t just report that you didn’t meet a KPI, you have to dig into what happened and how to address it,” MacDonald said.

That’s how RPOs demonstrate value and prove that they can be strategic partners to the business.

Sarah Fister Gale is a writer in Chicago.


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