Trust and Flexibility Are Key to Making RPO Work

Creating and maintaining a successful partnership between HR and recruitment process outsourcing (RPO) firms requires aligning expectations from the start, activating a strong governance model and allowing the RPO provider the flexibility to produce.

Trust is at the core of a fruitful engagement between HR and an RPO provider, but many companies are reluctant to let RPO in, fearing a loss of control, said John Younger, chairman and CEO of Accolo, an RPO provider based in San Francisco.

"There's just so little awareness or understanding of how RPO actually works to benefit companies," Younger said. "There's a fear of losing staff or control of the recruiting function, and uncertainty about how to make a case to senior management about making the change in the first place."

One big problem is the confusion around what RPO is and does, Younger said. "Frankly, that's what's stunted the growth of the industry. RPO is not contingency search, retained search, contract recruiters or candidate research. Sourcing companies are not RPO. That's just throwing bodies against the requisition."

RPO can be broken down into three main types:

• Full-service, where the RPO provider manages end-to-end recruitment solutions across the organization. 
  
• A hybrid model, where the client retains its in-house recruitment team, but engages with the RPO firm on an ongoing basis to manage hard-to-fill roles or intermittent spikes in demand.
  
• Project-based, where an outsourced provider is engaged for a specific project.
  

"At the core of determining the appropriate RPO model is aligning business strategy with your talent strategy," said Trish Healy, vice president of RPO Operations, North America for Futurestep, a global recruitment solutions firm based in Los Angeles. "What is the business trying to do and how can talent support that?"

Begin with a Business Case

A thorough business case with a clear return-on-investment is critical to success, experts agreed.

"The business case begins with an understanding of the efficiencies and value an RPO can bring to the organization," said Andy Roane, vice president of RPO at Yoh, a staffing and recruiting company based in Philadelphia. "Once you understand the value of an RPO engagement, then it's time to look internally and evaluate your own organization, processes and effectiveness. In this evaluation, data is king."

HR can work with the RPO firm to clearly define the recruitment need, the areas RPO will impact and the expected results. "It's important to take into consideration the different stakeholders, in particular the HR team and the hiring managers, and clearly define the benefits and impact before determining the best type of RPO partnership based on your desired outcome," Roane said.

Heather McGotty, director of HR at food manufacturer Welch's, based in Concord, Mass., decided that going external was the best option for her team of seven. "We are not recruiting specialists by trade," she said. "I could have invested internally to build that expertise, or I could have reached outside to find somebody that has that expertise to be a partner. I built a case for change focused on the marketplace and presented it to our VP of HR. It took about 30 days to get buy-in."

Set the Framework for Partnership

McGotty was clear in the vendor-selection process about what the company felt was important. In Welch's case, it was consumer products industry experience, experience with sourcing passive candidates, diversity hiring and using social media in innovative ways.

"We were very careful to say we were not looking for a vendor; we were focused on finding a partner," she said. "We wanted someone who saw themselves as an extension of our HR team."

After selection, the next steps in the RPO relationship—pre-implementation and discovery—are "vital to understanding the goals of the client and designing a solution that is customized for the client's need," Healy said. "It's critical that the RPO provider understand the culture of the client's company, the business state and the change management required to be effective with the change. A cookie-cutter approach to RPO is a recipe for disaster."

During Welch's pre-implementation and discovery sessions, McGotty realized how many areas of the company's recruitment practices could be improved. "A major outcome was getting a strong Welch's orientation for the RPO team," she said. "We went over a very detailed process-mapping session; presented on our culture, values and benefits; got to know each other better; and had some fun, too. This is when change management starts to feel real."

Why RPO Relationships Fail

Lack of support, inflexibility and a slavish focus on cost are at the core of most RPO failures.

"One of the biggest reasons for failure is that a company has designed recruiting and hiring around a process first," Younger said. "Clients force ineffective and inefficient technologies into the process. HR will say 'We have Taleo, we have to do it this way.' It doesn't mean we can't play with Taleo, but give the RPO a little latitude."

Lack of executive-level support has doomed many relationships. "I can tell you I've seen first-hand oversight for the relationship passed down to an associate HR person," Younger said. "It was thought of like a job board."

Another problem is treating RPO as a commodity. "Too often I see pricing driving all decision," Roane said. "But when we are charged with hiring a critical person on our team, do we go with the lowest-cost candidate or the candidate who has the expertise and is the best fit for our organization? When a company focuses on cost or price during the selection process, what does one expect the RPO to focus on when providing service?"

Unmet expectations often come from unexpected or uncommunicated scope changes, internal disagreement over direction and a rigid focus by procurement on the initial contract.

"The scope of work, the services provided and the service level agreements may change over time, so the parties need flexibility to update the contract as business needs change," Healy said. "The contract is not something you should pull out constantly to see if you are in compliance. The ability to be agile and flexible is critical."

Keys to Success

Commitment, communication, mutual trust and support are essential to making RPO work, Healy said. "This starts with executive buy-in and a mutual definition of success—short-term objectives and long-term goals—with a shared reward and risk."

She added that RPO engagements need a strong governance model, well-defined roles and responsibilities, a well-defined contract and service-level agreement, and a sound understanding of the client's business by the RPO provider.  

"Aligning values is important," Roane said. "Then tying those values to measureable performance criteria, as well as incentives and penalties when the performance is achieved or missed."

Finally, once an RPO provider is selected, allow it to do its work. "Listen to the RPO," Younger said. "They do this as a core function day in and day out. Don't dictate to them."

You can learn more about working with RPO from the Recruitment Process Outsourcing Association.