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8 Procurement questions for RPO evaluation answered
Are you considering an RPO to help your organisation meet its strategic recruitment goals?
Outsourcing the recruitment function is a major strategic consideration that will help you identify and secure your company’s greatest asset – its people. The below 8 questions can be helpful during the procurement evaluation process of an RPO partner, offering a valuable baseline for decision making.
1. Does outsourcing the recruitment function or process align well with your business needs and strategy?
One of the main benefits of RPO solutions is that you can scale the support you require from an RPO up or down depending on your hiring needs. Hudson RPO can work with on-site and off-site recruiters that will form part of and integrate into your existing teams and processes.
2. Will recruitment process outsourcing truly improve your business performance?
From talking with our clients around the world, we have identified the top 4 ways our clients have improved their business performance:
Cost reduction
Working with an RPO partner significantly decreases the average cost-per-hire, often by more than 50 percent. A tailored RPO solution supplements hiring and helps you drive quality, efficiency, and reduced costs and time to hire.
Ability to flex and scale
An RPO solution allows your organization to flex talent acquisition headcount up and down as hiring needs change. Measuring and tracking performance through regular reporting, alongside talent data that is easily translated to insights, you will increase efficiencies, identify improvements, and better forecast future hiring needs.
Quality of hire
Many clients are in a niche sector and need scarce skill sets. Leveraging formerly untapped sourcing channels, to access additional candidates is one of many benefits of outsourcing recruitment. Hudson RPO is experienced in candidate sourcing and has a range of bilingual talent sourcers available to meet client’s needs anytime, anywhere. While helping one of our clients in rural Canada find their niche talent, we reduced their agency fees by 25%, and accomplished an annual cost saving of $60,000.00 USD.
Enhanced employer brand
Utilizing Hudson RPO’s experienced recruiters as an extension of your team provides accessibility to deep candidate networks and reduces time to engage those candidates. Hudson RPO can also include employer branding into your tailored solution to help you further improve your employer brand. As well as creating a better candidate experience, a strong employer brand makes your organisation more attractive to candidates and positions you as the employer of choice in your market or industry.
3. How can you understand and control costs?
It is important to understand the entire pricing structure, and how the package of products, services and management fees may be bundled together. Through insights and regular reporting from Hudson RPO, it will be easy to understand how the investment you make contributes to your recruitment process, what improvements are needed, and what needs to be forecasted for the future.
Cost reduction through shared risk.
When a business downturn hits and recruiting needs suddenly drop, so does a company’s need for recruiting staff. Likewise, when the business is expanding into another product category or region of the world, recruiting needs may suddenly spike.
Outsourcing the recruitment function allows a company to pass along the cost risk of those resources to the business partner. Recruitment outsourcing partners accept the responsibility of efficiently adjusting resource levels when hiring fluctuations happen. As a result, the client does not bear the burden of carrying unnecessary staff.
Similarly, the client faces a lesser chance of being short-staffed when greater resources are required.
Faster time to hire.
Time is money and hiring new professional level employees takes a lot of both. From identifying candidates, to conducting interviews and negotiating offers, acquiring a new employee taxes your internal resources.
Plus, each day a job requisition remains unfilled, your business loses the benefit of that employee’s contribution. Recruiting and budgetary resources are pulled away from other high-value initiatives.
Outsourcing all or part of your internal recruitment function can dramatically reduce your time to hire.
Streamlined recruitment processes.
One of the most common problems we see with the recruitment life cycle is that it’s a disjointed and uncoordinated multitude of practices—good and bad—across organizational functions, departments, divisions and regions.
Often, this causes overlap in media buying, training, and on-boarding procedures. It leads to poorer hiring decisions and higher operational costs.
Piloting an RPO project gives you the opportunity to rethink these processes. The RPO vendor will help examine your recruitment process workflows to determine where overlap, excessive cost, and inefficient practices may exist.
Then, an outsourced model can be custom designed, providing you with service levels and success metrics that exceed the status quo. These practices yield increased efficiency and satisfaction with the recruitment life cycle, resulting in overall cost reduction for your company.
4. Are the financial projections accurate?
It is important for you to take a critical look at any numbers submitted by the RPO provider. Look for assumptions, oversimplifications or just plain misleading figures that may adversely impact your overall cost/fees. It is a good idea to ask for case studies or client testimonials.
5. Will this arrangement still enable you to have the necessary internal human resource skills and expertise needed in any organization?
While outsourcing may be the right direction for your recruitment function, there is still a need for internal expertise to help evaluate chosen strategies and tactics, and coordinate with the RPO provider.
It is essential for RPO providers to understand a company’s historical recruitment needs, the objectives and priorities of stakeholders and the broader HR and business agenda. This data will be the basis for setting correct SLA and KPI benchmarks, which are essential for the management of business expectations and getting the partnership off on a strong foundation.
Your business partner should also be open to transferring all knowledge and turning back over the people and processes to your internal team once a best-practice operation is established and running smoothly.
6. Who will ultimately manage the financial and performance metrics of the contract?
People, processes and technology combine to deliver an RPO solution. It is essential that the company’s internal leadership maintain oversight of any outsourcing initiative. Factoring into the contract terms the time and resources necessary to effectively manage the relationship and its results is smart.
7. What are the cultural ramifications of outsourcing your recruitment function?
Understanding how your managers and broader employee base are going to react to this massive operational change is critical. One essential competency to look for in your RPO business partner is change management expertise. Hudson RPO has knowledge of the potential pitfalls and know ways to ensure organizational support and buy in.
Our client Astrazeneca selected Hudson RPO for our scalabilty, cultural alignment, and experience in pharmaceutical recruitment. The solution for Astrazeneca includes all permanent and fixed term hiring. To set the team up for success, we implemented a change management program to get hiring managers on board in the process.
8. Is there an escape clause in the deal or protection in place for when business conditions change?
As we have seen during the recent recession, business conditions can change in a major way, and fast. You need to make sure you are not locked into a long-term contract or deal with little or no flexibility to alter scope or completely withdraw over time. Here again, making sure that there is a shared risk model for operational costs when hiring demands change is one way to help ensure some of this protection. You could consider an on-demand recruitment solution, getting your company expert support for sudden or challenging hiring requirements for a specified period.
If you have any questions not mentioned above, or would like to speak to a talent expert, please get in touch.
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