Recruitment process outsourcing - an overview of the pros and cons

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Recruitment Process Outsourcing A collaborative approach 1. What is RPO and what role does it play at Oliver James Associates? (RP) “An organisation engages in recruitment process outsourcing (RPO) when it transfers its recruitment function to an external service pro- vider. The RPO provider takes ownership for the recruitment process. “The reasons to do this are in an attempt to co-ordinate recruitment activities consistently and strategically across large complex organisations, whilst also: reducing recruitment spend & time-to-hire; being able to generate and analyse man- agement information on all as- pects of recruitment delivery; safeguarding legal compliance and mitigating risk; and freeing up time and resources to concentrate on their core responsibilities. “At Oliver James Associates, we work in part- nership with RPO service providers as they are very much the future sourcing model for our blue chip global clients. We need to evolve our deliv- ery model to add value in conjunction with their service delivery objectives.” 2. What’s the difference between an RPO company, an in-house recruiter and an exter- nal recruitment consultancy? (RL) “External recruiters are a completely sepa- rate business and work with a number of clients, often on a case-by-case basis. In-house recruit- ers are based on-site with the client and em- ployed by them directly. RPOs are much bigger players in the market - also based on site with the client but still a separate business entirely.” (RP) “RPO take ownership for the recruitment process and can work with their client to deliver multiple solutions to solve recruitment re- quirements: direct recruitment utilis- ing social media; internal & interna- tional mobility; talent pooling; past employee returner initiatives; all alongside their partnership with external recruitment consultan- cies. This will often involve the implementation of proprietary recruitment technology solutions that standardise processes. “In-house recruitment teams will deliver many similar services to RPO providers - espe- cially in small/medium-sized firms, but staffing a whole internal resourcing department would be a more expensive option for some of the larger complex organisations, and they often prefer to engage an RPO provider with a track record of delivery and problem solving. “External recruiters operate a supplier model – they work in partnership with either in- house recruiters or RPO and deliver solutions based on in- dividual role-by-role instruc- tions”. 3. Can you give an example of how an RPO relationship would work? (RL) “In exchange for filling a high proportion of roles, the RPO will offer the client a reduced mar- gin fee i.e. instead of filling 10 roles at a 25% margin, they will agree to fill 100 roles at 12%.” 4. Who works at an RPO and what responsi- bilities do RPOs take on board? (RP) “RPO providers were historically staffed by individuals experienced in recruitment from either the agency supply side (ex-external recruiters) or from the in-house recruitment teams. As we now move into the era of 2 nd & 3 rd generation RPOs, several members of staff have worked in RPO for their whole careers and have been trained as graduates through to their present role.” (RL) “RPOs can take on a variety of responsi- bilities on behalf of the client – from interview- ing and screening, through to on-boarding and inductions later down the line when client trust had been gained.” 5. What overarching benefit does an RPO offer to the client? (RL) “One of the big bonuses for the client can be seen in the world of contracting. Contract workers are a large cost outlay - if you have 50 contractors that are paid on a weekly basis, this can cause a cash flow issue not to mention certain legal issues. The RPO will take responsibility for this, remove the financial burden and create a barrier for the client.” “RPO take ownership for the recruitment process and can work with their client to deliver multiple solutions to solve recruit- ment requirements” Richard Pickard Director of Financial Services Richard has over 20years experience in Recruitment & Sales Management and is responsible for all areas of financial services at Oliver James Associates. Richard Larkin Associate Director of HR Support Services Richard Larkin is a Non-Executive Director at Oliver James Associates. He has a wealth of experience in staffing, HR and client services built up over his career overseeing an impressive roster of global clients. DIRECTOR BIOS Richard Pickard, Director of Financial Servic- es at Oliver James Associates and Richard Larkin, Director of Resourcing & Governance at Barts Health NHS Trust, consider the prac- tice of Recruitment Process Outsourcing (RPO) and how different recruitment services should work together to support clients’ re- cruitment needs. OLIVER JAMES ASSOCIATES I WWW.OJASSOCIATES.COM I 2014

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Two senior directors explore the RPO set up and how they work with external recruitment agencies and internal recruiters.

Transcript of Recruitment process outsourcing - an overview of the pros and cons

Page 1: Recruitment process outsourcing - an overview of the pros and cons

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RecruitmentProcessOutsourcing A collaborativeapproach

1. What is RPO and what role does it play at Oliver James Associates?

(RP) “An organisation engages in recruitment process outsourcing (RPO) when it transfers its recruitment function to an external service pro-vider. The RPO provider takes ownership for the recruitment process.

“The reasons to do this are in an attempt to co-ordinate recruitment activities consistently and strategically across large complex organisations, whilst also: reducing recruitment spend & time-to-hire; being able to generate and analyse man-agement information on all as-pects of recruitment delivery; safeguarding legal compliance and mitigating risk; and freeing up time and resources to concentrate on their core responsibilities.

“At Oliver James Associates, we work in part-nership with RPO service providers as they are very much the future sourcing model for our blue chip global clients. We need to evolve our deliv-ery model to add value in conjunction with their service delivery objectives.”

2. What’s the difference between an RPO company, an in-house recruiter and an exter-nal recruitment consultancy?

(RL) “External recruiters are a completely sepa-rate business and work with a number of clients, often on a case-by-case basis. In-house recruit-ers are based on-site with the client and em-ployed by them directly. RPOs are much bigger players in the market - also based on site with the client but still a separate business entirely.”

(RP) “RPO take ownership for the recruitment process and can work with their client to deliver

multiple solutions to solve recruitment re-quirements: direct recruitment utilis-

ing social media; internal & interna-tional mobility; talent pooling; past employee returner initiatives; all alongside their partnership with external recruitment consultan-cies. This will often involve the implementation of proprietary

recruitment technology solutions that standardise processes.

“In-house recruitment teams will deliver many similar services to RPO providers - espe-cially in small/medium-sized firms, but staffing a whole internal resourcing department would be a more expensive option for some of the larger complex organisations, and they often prefer to engage an RPO provider with a track record of delivery and problem solving.

“External recruiters operate a supplier model – they work in partnership with either in-house recruiters or RPO and deliver solutions based on in-dividual role-by-role instruc-tions”.

3. Can you give an example of how an RPO relationship would work?

(RL) “In exchange for filling a high proportion of roles, the RPO will offer the client a reduced mar-

gin fee i.e. instead of filling 10 roles at a 25% margin, they will agree to fill 100 roles at 12%.”

4. Who works at an RPO and what responsi-bilities do RPOs take on board?

(RP) “RPO providers were historically staffed by individuals experienced in recruitment from either the agency supply side (ex-external recruiters) or from the in-house recruitment teams. As we now move into the era of 2nd & 3rd generation RPOs, several members of staff have worked in RPO for their whole careers and have been trained as graduates through to their present role.”

(RL) “RPOs can take on a variety of responsi-bilities on behalf of the client – from interview-ing and screening, through to on-boarding and inductions later down the line when client trust had been gained.”

5. What overarching benefit does an RPO offer to the client?

(RL) “One of the big bonuses for the client can be seen in the world of contracting. Contract workers are a large cost outlay - if you have 50 contractors that are paid on a weekly basis, this can cause a cash

flow issue not to mention certain legal issues. The RPO will take responsibility for this, remove the financial burden and create a barrier for the client.”

“RPO take ownership for the recruitment process and can work with their client to deliver multiple solutions to solve recruit-ment requirements”

Richard Pickard Director of Financial Services

Richard has over 20years experience in Recruitment & Sales Management and is responsible for all areas of financial services at Oliver James Associates.

Richard Larkin Associate Director of HR Support Services

Richard Larkin is a Non-Executive Director at Oliver James Associates. He has a wealth of experience in staffing, HR and client services built up over his career overseeing an impressive roster of global clients.

DIRECTOR BIOS

Richard Pickard, Director of Financial Servic-es at Oliver James Associates and Richard Larkin, Director of Resourcing & Governance at Barts Health NHS Trust, consider the prac-tice of Recruitment Process Outsourcing (RPO) and how different recruitment services should work together to support clients’ re-cruitment needs.

OLIVER JAMES ASSOCIATES I WWW.OJASSOCIATES.COM I 2014

Page 2: Recruitment process outsourcing - an overview of the pros and cons

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6. Would you say RPO is a relatively well-known service?

(RL) “Yes and no. It certainly is growing in recog-ognition. However it has been squeezed a lot in the 10-15 years since RPOs began appear-ing. Back then you could earn a lot for providing these services; margins are being squeezed for RPOs of today.”

7. What about globally? What route do other countries prefer?

(RL) “The European market is only just find-ing its feet; they are still suspicious of RPO. In general Europe has been dubious about any recruitment contracts. However it is being gen-tly driven by what is happening in the UK and is now duplicating successful UK recruitment models - for example Allianz in Germany is now looking at RPOs.”

“Asia has a stronger RPO model in develop-ment, again as a direct result of the market

trend in the UK. Stepping away from Financial Services and Insurance, Telecoms giant BT out-sources all of its recruitment for its Malaysian call centre to an RPO.” 8. Is there any hostility/negativity between the services or do they work together well?

(RL) “There is certainly no malice or hostility, but recruitment agen-cies would probably en-joy the absence of RPOs on occasions - an RPO can sometimes block their direct communica-tion with line managers and limit their capability to develop relationships. However, in the main, it would be true to say that one party cannot re-ally work without the other.

“This is because despite the large coverage that the RPO can achieve, it still needs local and/or specialist knowledge for those niche ‘hard to

fill’ roles, which is when external agency partner-ships are essential. Consequently there tends to be a mature relationship between the services where they appreciate each other as opposed to battle with each other.”

(RP) “The recruitment world is constantly chang-ing and evolving in order to better achieve our

client’s objectives. Some of these changes are driven by a client’s own desire to be more cost-conscious, or to standardise processes; where-

as some of these changes are driven by regula-tory or political influence and a desire for a client to minimise its exposure to risk. Some changes are being driven quite rightly by RPO providers, improving their product and being able to offer clients solutions, that offer recruitment solutions far beyond the capability of an individual external agency.

“... despite the large coverage that the RPO can achieve, it still needs local and/or specialist knowledge for those niche ‘hard to fill’ roles, which is when external agency partnerships are es-sential.”

“External agencies may yearn for the ‘good old days’ when a ‘wild west’ style marketplace allowed them to work with individual hiring managers and agree their own rates and processes on an ad hoc basis, but commercial reasoning tells us that nowa-days this model is flawed and results in, at best, organised chaos for the client.”

9. What would you say is the main pro of each of the services?

(RL) “RPOs - market and management information - they are extremely good at providing measurable in-formation and have a lot of recruitment knowledge. Ask them any question about the difference in CVs sent for role A versus role B and they will very quick-ly provide you information based on hard statistics.

“Agencies - relationships with both clients and can-didates. Agencies know their people very well (the good ones do anyway). Candidate knowledge is also key - when sourcing a candidate with a specific set of skills, a good agency will be able to offer you a list of people that could match the role based on their relationships with high quality individuals.“In-house recruiters - cheaper resource, no outlay except for salary. Some would argue that because they are direct employees they have better relation-ships and may have the ‘hiring manager’s ear’ but this is not always the case.”

What changes do you foresee for recruitment in the next 5 years?

(RP) “The recruitment industry is alive and kicking! But solutions on offer to clients have become more varied, and also more bespoke – this can only be a good thing.

“Clients are able to consider the volume and variety of their likely recruitment requirements and look for strategic partners that will deliver. This may be RPO or an in-house team, but will always include exter-nal partnerships to some degree.

“External agencies that can evolve and design a de-livery model that dovetails appropriately to a client’s chosen solution will thrive. Agencies that become niche specialists and develop long term relation-ships within the ‘passive’ candidate pool will be val-ued. Agencies that value delivery to agreed times-cales, within defined service level agreements and have the ability to distinguish the most appropriate candidates and therefore not waste client time will be the ones that survive. Agencies who map mar-kets and develop meaningful market intelligence that clients can use to shape their decision making will be asked to work closer as key partners.”

(RL) “RPOs will likely have to adapt as well, driven by potential changes to contractor regulation for ex-ample.”

OLIVER JAMES ASSOCIATES I WWW.OJASSOCIATES.COM I 2014

Who we areOliver James Associates are a specialist recruitment partner to the Financial Services sector; finding and placing market-leading talent across the world. When the company originally set up we were purely focussed on the insurance sector so this area is particularly close to our hearts, though we now focus on all areas of Financial Services.

How we do itWe are able to provide a full range of bespoke recruitment services tailored to your needs, including Executive, Contingent, Retained and Exclusive Solutions. Whichever type of search we do, the key to our service is our unique proactive search methodology. Before we start working with clients in a particular area, we spend 12 months minimum mapping that market. This involves talking to everyone in that market, finding out what they have done in their career so far, what they currently do and more importantly what they want to do in their next job. Hence when we start working with clients on vacancies we have a thorough knowledge of the local talent pool.

What we do betterDue to our unique search methodology, our deep technical knowledge, and our continued success on delivery we develop long-term relationships based on trust and integrity. Due to the strength of these relationships we help organisations to attract the most suitable talent in the market instead of being limited to a list of candidates that are actively seeking jobs. No other agency has their roots so engrained within the market as we do, and this allows us to find candidates that no other agency can get access to. This is paramount when the demand for many skills needed within the sector outweighs the supply of candidates at any one time.

Where do we do itFrom our offices in London, Manchester, Dublin, Zurich, Amsterdam, Hong Kong and Singapore we cover the UK, Ireland, Continental Europe and Asia Pacific regions.

E [email protected] T +44 (0) 207-649-9464

oliver-james-associates @OJAssociates