I’ve worked in the Recruitment Process Outsourcing (RPO) industry for almost 20 years, so it may seem strange that I’m sharing a list of reasons not to partner with an RPO provider. But the truth is, while RPO is a great solution for many companies, over the years I’ve encountered a number situations where RPO was not the right solution.
Here are five reasons why RPO might not be the right solution for your company at this time.
1. You don’t have a strong handle on your current metrics.
The starting point of every successful outsourcing partnership is a thorough understanding of your current recruitment metrics, both quantitative and qualitative. If you don’t measure key performance indicators, it is impossible to determine the improvement brought by the outsourcer.
At a minimum, you should have current measurements of cost per hire, time to fill (ideally by job family or category), applicant to hiring manager interview ratio, interview to hire ratio, turnover at 30 days, 90 days, 6 months and 12 months, hiring manager satisfaction and candidate satisfaction. If you don’t have reliable data in these areas, begin today to gather this information, even if you need third-party assistance. A number of firms (including IBM) can help you gather and analyze the data over the course of a one-month consulting project.
2. You haven’t set clear expectations for the impact of outsourcing.
It is critical at the outset of an outsourcing partnership to have established SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals for the program. Using your current metrics, it is critical to identify the exact improvement that you expect for each key area. For example, you might be focused on cost reduction, so a 20% cost savings in year one would be considered a win even if all other metrics remain unchanged. Or your goal might be to reduce time to fill from 75 days to 60 days within six months, while improving interview to hire ratio from 5:1 to 3:1.
Whatever your goals, express them using the SMART goal framework to avoid miscommunication and disappointment down the road. Simply expressing a goal of reducing time to fill or improving candidate satisfaction isn’t specific enough to support a strong RPO partnership.
3. You don’t have a strong leader to manage the partnership.
You can expect your RPO partner to bring a leader to the table to run the program, but you also will need to bring a leader to oversee the client side of the partnership. This leader ideally will have strong relationships across your organization and will be able to manage complaints and escalations, drive strategic changes and act as an advocate for the partnership as needed. If this person doesn’t exist in your organization and you need to go outside to hire someone, give that person time to acclimate to your organization before they take control of the program.
4. You don’t have a change management strategy in place.
It is axiomatic that people are resistant to change of any sort. Recruitment carries enough emotional weight to make some people very resistant to a change in strategy. You shouldn’t enter into an RPO agreement unless you are willing to invest the time and money required to run an effective change management process. Failure to do so can lead to resistance to the new program, lack of adoption of new procedures, unhappy hiring managers, increasing complaints and escalations, and a failure of the program to achieve its goals.
Some RPO providers recognize this is a problem for clients and are offering formal change management programs as part of their RPO programs.
5. RPO is not aligned with your overall business strategy.
Outsourcing in general and recruitment outsourcing specifically is most successful when it is done not for tactical reasons (reduce cost, improve performance) but for strategic reasons (improve focus on other critical HR transformation activities, gain access to best practices and expertise, for instance). When a company chooses outsourcing as a corporate strategy to shed non-core practices, improve agility and reduce cost, it is easier to win broad support across the organization, a critical factor for the long-term success of the program.
None of these five reasons alone necessarily means you can’t pursue an outsourcing strategy for your talent acquisition, but they should give you pause. Solutions to these scenarios exist and can be put in place before you launch your RPO program. And if you need an outside perspective or assistance, many RPO providers offer consulting services to help you work through any of these five issues.
To learn more about how to determine if an RPO is right for your organization, what to expect from an RPO partner and tips for soliciting an RPO vendor, download the IBM RPO 101 eBook.