Recruitment Process Outsourcing firms offer services that primarily help with companies’ operations. Many RPO firms have served a general purpose of being able to help businesses from all over the world train recruitment teams.
Most of the time, its advantages are seen so positively that it has become one of the most in-demand jobs and services available today. However, recruiting costs big dollars.
Its value lies in the salaries of the personnel as well as on expenses on the recruitment process. In fulfilling its role of narrowing down prospects and reducing its client company’s expenditures on recruitment, an RPO can do many great things.
Why hire offshore RPOs?
There are many things that catalyze the decision of companies to consider hiring offshore RPOs. Aside from the obvious benefit of being more streamlined, most organizations hire RPOs because of its consultative function in managing people, processes, technology, and the creation of strategies.
The recruitment process offers many significant advantages for companies in terms of having quality hires useful results of data analysis and the productivity of their outsourced labor. Most outsource services from RPOs to increase their growth organically and geographically, or for corporate restructuring.
According to Broadleaf Results, an American company that gives temporary staffing support to customers since 1965, here are the top 5 reasons why companies are considering and turning to RPOs for solutions:
Controlled costs and more savings
All companies are looking for ways of saving up and reducing the costs of recruitment. To achieve this goal, many factors contribute to achieving lower costs.
First, outsourcing the process of recruitment allows a firm to share the cost risks if recruitment needs suddenly die down. This way, RPO firms prevent more burden of their client companies experiencing either a shortage or a surplus of talent.
In hiring RPOs, savings are also easily achieved since placements cost less when done in volumes. For example, employing 100 people might cost less than hiring one at a time, particularly in the long run.
Centralized and streamlined process
A large company consists of several divisions that may require several hires one by one or all at once. In a given RPO solution, hiring is more centralized, adding more uniformity and coordination to the recruitment life cycle.
In an industry where time is essential, having a streamlined process also prevents the client company from incurring additional losses. For each day a job remains undone, the business loses the benefit of an employee’s contribution.
Streamlining avoids overlaps in the process that may have caused excess operational costs and inefficient practices, as well as reduces time spent on hiring.
Access to technology and leading recruitment tools
RPO firms do their job best by finding the best matches for companies’ job vacancies. However, they do not do this on their own. They are equipped with the right tools and updated technology that could reach both active and passive job seekers.
While your organization could get such tools for yourselves, investing the time and money in learning how to use them might cost more when you would only need several hires in a year?
Indeed, it would be better to outsource the work to a firm who has already mastered the use of tools and matching appropriate technology to find the best hires.
Top-quality ‘internal’ talent
In addition to the right access to technology and top recruitment tools, RPOs already have a pool of top-caliber recruiters who could be sourcing your open positions for you.
Recruitment always aims to get the best talent in the market, but what about the person who recruits? Indeed, “recruiting a recruiter” for your firm may be as challenging as filling up the usual open position.
As outsourcing your process to an external actor makes your business more flexible to the market conditions, you will want to have the best recruiter out there as well.
Accountability
Top management executives are consistently looking for more accountable and consistent sources of hiring the right people than the traditional internal and contract recruiters. RPO solutions establish accountability on the first phase by seeking the approval of their clients in the program they aim to implement for recruitment.
Most of the time, an RPO program is performing well and saving costs for everyone if they frequently share the savings directly with the customer either in the form of a rebate or more discounts.
If your company needs more expertise and technical know-how, better systems and process, and improved technology, then hiring an RPO would really make a positive impact.
Risks and How to Avoid Them
Risks of offshore recruitment process outsourcing always loom even when the management is careful not to make any mistakes.
While RPOs can provide many solutions, it is not a commodity that offers magical solutions without starting with a plan. Instead, it is a highly consultative function that tries to solve the need for better expertise in recruitment.
Here we explore several ways on possible risks hiring RPOs could present to your company as well as how to avoid them or set things right.
Unmatched expectations
Expectations could come in many forms – costs, output and service delivery, time, quality of hires, etc. While RPOs allow the maximization of their competencies to reach expectations, certain recruitment myths may raise misconceptions between partners.
Knowing the goals that need reaching is very important. This can be hindered by not being able to create informed decisions due to a lack of proper communication channels.
Big companies, more importantly, are at a certain risk since they have several divisions with needed services that could overlap, causing inefficiencies in the process.
Solution:
Expectations should be managed from the very beginning, especially when there are root problems that outsourcing can and cannot solve. At the start of the recruitment program, key performance indices need to be set to assure that the needs of the organization are being met.
In crafting possible solutions with RPO firms, it is also essential to consider and conduct an early assessment of recruitment risks that can happen when hiring RPOs instead of prioritizing cost reduction.
A management plan agreed upon by both parties can be written at the beginning of the partnership and should include:
- Specific timelines for meetings
- Identified person of contact from both parties
- Procedures for sudden changes in operational goals and adjustment of deadlines
- Protocols for reporting updates and issues
Unexpected costs
Outsourcing is repeatedly attributed to saving the costs made by companies per hire. However, if those savings come with some hidden costs, the benefit could be lost entirely.
Hidden fees could come from anywhere, including but not limited to program upgrades, troubleshooting costs, and even charges for services done after-hours which were not specified in the contract.
Solution:
Focusing on the result – quality hires and better employer brand – and resisting the urge to think about cutting costs as the primary objective serves as an eye-opener for many organizations.
Here, transparency is key. In drafting a contract, it would be ideal to have all expected services put into writing as you read carefully for any surcharges or extra charges. Service Level Agreements (SLAs) could help reduce the surprise costs.
In a nutshell, SLAs list down not only the services and guarantees, but also the overall consulting costs, staff training costs, after-hours services, and the cost of field visits.
It is also important to specify the length of the partnership to not pay extra fees by the end of the project.
While RPO is mostly seen and lauded for being able to reduce costs in fulfilling a company’s recruitment needs, your firm’s relationship with the RPO company should still focus on improving candidate quality and quantity.
Poor cultural fit and relationship management
With certain goals already set in mind and not much due diligence, it is a risk that you may realize that the company you are working with has a different set of values from yours.
Your RPO firm should be a trusted provider of services that will complement your corporate culture through the soft skills its employees emanate to allow a smooth-sailing relationship between partners.
This is true especially when you outsource, some amount managerial oversight is lost. Adjustments, when not made, could cause more problems and even jeopardize a project before it even completely sets off.
Solution:
In any partnership, it is crucial for all parties involved to be clear on what the problem is at any stage. As expectations should be managed, considerations on the kind of culture and what you are and are not willing to leave up to the provider completely should be made.
While technical know-how is essential in this field, there is also a need to focus on values, especially in handholding the hiring manager from the RPO firm that has just been employed.
Legal Issues
All organizations have their secrets, and for some, their Intellectual Property (IP) is the lifeblood. IP refers to everything the company has built and created that they could genuinely call theirs.
Just like hiring an employee, working with an outsourcing company means a certain extent of IP exposure to another party. While this might be one of the rare cases of theft or information leak that could gradually escalate to a full-blown legal issue, managing your IP and trade secrets is crucial and is always a risk.
Solution:
In writing a contract at the beginning of your partnership, it will be best both for you and your RPO provider to have a signed confidentiality agreement.
In this case, a Non-Disclosure Agreement (NDA) would be helpful as it describes how they could be exposed to each other’s processes and how they should treat that information. A well-written NDA decreases the risk and impact of an information breach.
Assess Early, Minimize Risks
See what RPO services can do for you here at Sysgen RPO. With over 26 years in the industry, Sysgen RPO understands clients by managing expectations and debunking myths through its streamlined process in recruitment.
We are here to ensure that you get the right balance of quality and quantity of talents who will be a good fit for your company.
As your offshore partner, we will give you the needed support to ensure success in your endeavors with minimal risks.
Contact us today, and we can talk about possible solutions for your organization.
References
Accolo. (2018, May 31). Why RPO fails and what to do when you don’t love your outsourcer anymore. Retrieved from https://www.accolo.com/blog/why-rpo-fails-and-what-to-do-when-you-dont-love-your-outsourcer-anymore/
Broadleaf. (2019, May 23). 5 reasons companies choose RPO. Retrieved from https://broadleafresults.com/blog/recruitment-process-outsourcing/5-reasons-companies-choose-rpo/
Cohesion Recruitment. (2018, May 24). How to manage risks associated with RPO. Retrieved from https://cohesionrecruitment.com/how-to-manage-risks-associated-with-rpo/
Hudson RPO. (2014). RPO risks, myths and considerations. Retrieved from https://www.hudsonrpo.com/rpo-intelligence/recruitment-process-outsourcing/rpo-risks-myths-and-considerations/
Overby, S. (n.d.). What is an SLA? Best practices for service-level agreements. Retrieved from https://www.cio.com/article/2438284/outsourcing-sla-definitions-and-solutions.html
Sysgen RPO. (n.d.). Contact us. Retrieved from https://sysgen-rpo.com/contact-us/
