Developing and Managing the Relationship with Your RPO Provider

Ashehad Faizy
Posted: 06/02/2011

Since the 1970s, when employers first began outsourcing some of their recruitment process, Recruitment Process Outsourcing (RPO) has had quite an impact on the recruitment scene. Changing business tactics and environments have led to decisions that affect the day-to-day operations in an organization. Previously, processes were becoming complicated, redundant and monotonous with limited room for improvement. Organizations faced the dilemma of filling special positions in shorter time frame, cost and huge turnover and difficulty in tracking everything from one point. Over time, organizations started to realize the value in having an RPO.

What is an RPO?


The RPO Alliance, a group of the Human Resources Outsourcing Association (HROA), approved this definition in February 2009: "RPO is a form of business process outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external service provider. An RPO provider can provide its own or may assume the company's staff, technology, methodologies and reporting. In all cases, RPO differs greatly from providers such as staffing companies and contingent/retained search providers in that it assumes ownership of the design and management of the recruitment process and the responsibility of results."

Today, approximately 60 percent of RPOs are "old wine in new bottle" types – a recruitment / executive search company with an added function of payroll and administration. By the 1990s HROs began taking up taxation, payroll, recruitment etc. When so many players with different backgrounds and strengths came into the market, it became imperative for organizations to choose the one most suitable to their needs. Most people put out a very wide RFP and do not understand the impact that it will have on the organization and existing staff.

How do you select an RPO?


Before the selection process, an organization needs to be very clear on why they need an RPO. The disparity we feel when someone says "our recruitment service is outsourced" and when "our payroll is outsourced" clearly shows lack of understanding on the concept of an RPO. Instead, you can think of an RPO as a model of outsourcing – it’s apt to call it co-sourcing since with an ideal RPO, you are in constant link with them. Some of the leading RPOs offer "Enterprise" services, wherein we outsource all of the recruitment activity. With "Selective" services, we give parts of what we need to manage. Basically, it all comes down to defining what you need to achieve in the first place.

You must first identify the components that need to be outsourced (i.e. candidate sourcing and applicant processing). Then, you may use the RPO as a change agent, process enhancement tool, or look for strategic, economic, operational, risk reduction, technology or compliance factors. Today RPOs are dividing out to transformational or transactional providers. Buyers these days are looking for an RPO with single point management to provide temp, permanent, and contingent labor. Defining the motivating factor for a company to hire an RPO is important when it comes to managing them: was it cost? Technology? Process realignment? In an ideal scenario, it should be a mix of all motivating factors. Cost-cutting alone will not add value to the organization on the short run or even in the long run, although it’s critical. If process change or transformational practice is the primary objective, then cost should not be considered heavily.

How to manage an RPO?


Your organization should outsource for the right reasons from the very beginning. When choosing an RPO, you are not choosing another company or simply a service provider, but a partner. There should be a cultural fit. There are a few key points to keep in mind from the start for setting up an effective partnership:

  • Align cross functional teams from the organization with the RPO. You can achieve a synergy by co-defining goals, tasks and deliverables.
  • Agree on relevant and measurable SLAs and define incentives for achievement.
  • Establish a strong communication channel and define governance.
  • Ensure the RPO’s processes are aligned with the organization’s. There should always be access for the processes and policies and they should reflect the organization’s.

The key to a successful RPO relationship is communication and collaboration. When selecting and managing an RPO, an organization should think ahead and decide what they want to accomplish in the end. With this in mind, it will be easy to define policies, practices and able to define the SLA’s to be put forward. An open collaboration with communication empowered at all levels leads to imminent success.

Ashehad Faizy
Posted: 06/02/2011

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