Monday, November 28, 2005

Business Case for RPO

(where RPO = Recruitment Process Outsourcing)

Jeff Hunter of the blog has a very interesting post on the causes of RPO. His experience is the same as mine... internal recruiting organizations with highly positive feedback are getting outsourced more and more.

While I like Jeff's conclusions about how to improve the recruiting function's control over the outsourcing decision, I'm not sure that's persuasive to an executive. The solution is for recruiters to be more accountable for the new hire's success. Jeff argues that the recruiting function looks to find people, not fill positions. The long term objective of filling positions is left to the hiring manager, and the recruiter does not have sufficient stake in the new employee. I've argued in the past that new hire onboarding belongs to the recruiting function, and that onboarding is a process that should last from the date of offer acceptance until possibly 6 months after the hire date. I'm not sure how much longer a recruiter could reasonably follow an employee's onboarding without growing the recruiting staff.

So far I agree with Jeff. Here's where I disagree. Each of these arguments is simply a matter of scale.

First, I believe that executives see two things in RPO. The first is cost reductions. The RPO organization might be able to hire recruiters to recruit for multiple organizations. Therefore, the productivity of each recruiter should be higher.

Second, I think time to hire is critical to executives. RPO organizations will have an easier time creating a pool of candidates that is ready to interview. When a job requisitions reaches then, they should be able to quickly move on known candidates, rather than taking time to advertise for the specific job. Their presence in the market is powerful: they command many more job requisitions, and therefore, they have a much larger, more captive candidate base than any single company possibly could.

So I think the trend towards RPO is growing and picking up momentum. However, this really should allow the smart recruiting manager/director of talent or whatever to focus on things like onboarding.