The Benefits of RPO Continue to Evolve

By Roy Maurer Jun 30, 2015
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LAS VEGAS—The $3.2 billion recruitment process outsourcing (RPO) industry has grown considerably in recent years, as it has changed from being primarily a cost-cutting measure to a full strategic partner that can provide workforce scalability and analytics.

“RPO has taken employers from a reactive mode to a proactive strategy-building mode,” said Terry Terhark, president of talent acquisition solutions for ADP. “We expect RPO to grow as more and more companies are getting comfortable with the strategy beyond just filling hard-to-fill jobs,” Terhark told attendees June 30, 2015, in a concurrent session at the Society for Human Resource Management (SHRM) 2015 Annual Conference & Exposition.

The core of RPO includes the complete recruitment life cycle from sourcing, scheduling interviews, conducting background checks, creating offer letters and even onboarding. In addition to the end-to-end recruiting function, RPO firms can provide employers with analytics “that are very challenging to get at,” Terhark said. RPO providers also offer specialized services in employer branding, building talent pools, assessing candidates, diversity hiring and equal employment opportunity reporting, as well as in bringing the latest recruiting technology and long-term strategies to the table.

“Companies deploy RPO for a multitude of reasons. It really comes down to what is important to you in an RPO relationship,” he said. “Every RPO relationship is uniquely different.”

Terhark said that in the early days, companies were interested in RPO as a way to “reduce cost— how can we reduce staffing agency spend? What I’ve seen more so now is scalability, how do we go up and down, how do we take advantage of the technology available to us today, whether that’s mobile, social or recruitment technology?”

Ricoh Seeing the Benefits

Victor Maciak, vice president of talent management at Ricoh Americas Corp., talked about how the decision to engage in RPO completely transformed recruiting at the company. The office technology solutions company fills 7,000 jobs annually and has been working with ADP as an RPO partner for four years.

Formerly in human resources, but at the time a salesman for Ricoh, Maciak called HR to express frustrations with the company’s recruiting processes. He was told to return to HR and fix it. Soon thereafter, he was told to look into RPO. “So we did. It took about six months of talking to companies, until we ended up with ADP,” he said. ADP currently supports about 85 percent of annual requisitions, a third of which are filled by internal employees or through employee referrals.

Along with keeping up with scalable needs, the partnership between Ricoh and ADP has yielded the following results:

  • An enhanced relationship between recruiters and hiring managers.
  • A reduction in cost-per-hire by 70 percent of the benchmark. “It went down dramatically, for the most part from no longer paying the sourcing agency fees,” he said.
  • Talent communities filled with 10,000 candidates from which to draw.
  • The number of total hires coming from referrals increased from 10 percent in 2014 to 13 percent currently.
  • Upgraded administrative onboarding processes. “We used to hear complaints about offer letters, that they were late, wrong and incomplete. Complaints every week. I don’t hear a word about this anymore,” he said.

Roy Maurer is an online editor/manager for SHRM.

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