When an organisation's recruitment needs change and evolve, it is important that the Recruitment Process Outsourcing (RPO) model use by its external provider shifts accordingly too. If an organisation is to transfer part or all of its recruitment processes to an external source, it is vital that it has a clear understanding of RPO and the most commonly used models. This will allow the organisation to understand how effective the external provider is in its function.
The first key thing to appreciate is that cost-savings are not the only benefit associated with recruitment process outsourcing. Of course, cost-saving is important - and in many cases it will have been the factor that first prompted an organisation to engage with the services of an external provider, but ultimately cost is unlikely to be the top priority for many clients and talent acquisition teams. It is the quality of the talent provided that is the most important factor overall.
To look at the effectiveness of RPO beyond the cost, it is useful to unpick the two most commonly used RPO models: resource based and performance based.
A resource based model is usually founded by having a set number of RPO providers, most likely operating on-site. It's a fixed cost model with performance typically measured by a service level agreement. There is less flexibility offered by this type of resource based model as any changes to process and structures would normally need a process of formal approval. On the flipside, this RPO model affords the client a greater oversight of the RPO team members and therefore more input into the decision-making process.
The alternative to a performance based RPO model is designed to offer a greater amount of flexibility overall. Typically, RPO team members will be located off-site and in a performance based model the provider is the driving force. It enables more diverse activity than in a resource based model and there is greater accountability of the provider. A key advantage of a performance-based model is that the RPO provider responds to changing market and business conditions have more ownership and responsibility, rather than the actual client.
Organisations need to consider which type of model is most suitable for their needs. If a company is expecting a high volume of hires, then a resource based model might be most applicable. If recruiting resources need to be raised then, a resource based RPO model will help to control the cost of hires and to uniform recruiting processes.
However, if an organisation is working within a sector where there is a tightness in the talent market or it is particularly susceptible to external factors, a resource based model might not be the most suitable. The need to have a flexible approach and to have scalability could be far more important than cost and process. Therefore, a performance-based model, where the client pays for results (number of placements), would be more advantageous.
An RPO provider should be in a position to analyse and evaluate cost and performance. Furthermore, the provider should make recommendations at the appropriate time and this should allow the organisation to decide whether a performance-based or resource based model is the correct approach. Ultimately, RPO providers should offer timely advice to clients and the best RPO providers are those that understand the organisation's strategic goals and is outcome-driven.
This article was written by Simon Benford-Blows, Director - RPO, Talent Acquisition, EVP, Recruitment, Outsourcing, MSP, VMS, Graduate & internship, Workforce Planning at Pertemps.
Connect with Simon on LinkedIn here.
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