Resourcing Insight Blog

11 Oct RTT – RPOs vs. Talent Acquisition, which model works best?

These are the thoughts and takeaways from the latest Resourcing Think Tank (RTT) held on Thursday 25th October 2012 hosted by Barclaycard’s Toks Adebayo (Talent Acquisition Manager), titled ‘RPOs vs. Talent Acquisition; which model works best?’.

The following summary has been prepared to reflect a segment of the discussion held amongst senior HR and Resourcing professionals from leading UK and other international businesses.  Specific company details, experiences and examples have been omitted from this summary as all discussions are held under ‘Chatham House Rules’.

When structuring an organisation’s recruitment / resourcing function, determining whether to employ a Talent Acquisition (TA) or RPO model is a decision which requires some careful consideration. For example, deciding whether to outsource both permanent and contingent requirements, developing an effective partnership with an RPO or MVP, evidencing ROI and pursuing the effectiveness of combining a mixture of both sourcing techniques to make the resourcing function fit for purpose.

Without a doubt, both sourcing models have their strengths and weaknesses. Talent Acquisition is argued to be more effectively intertwined with strategic workforce planning SWP, can increase candidate engagement and can therefore positively enhance the development of long-term relationships. However, it is regarded as much slower than agency or RPO usage, potentially lacking in the tools to access passive or ‘hard to reach’ talent, and if managed poorly, detrimental to the employer brand.

On the flip side, RPOs are credited with efficient time to hire windows, being highly structured and centralised, and their ability to rapidly contract and expand resources depending on the market environment. However, they are often suggested to be outdated, noted as an expensive solution (especially if tied to a long-term contract) and perhaps limited in terms of accessing specialist / niche talent.

Changing face of recruitment:

The resourcing function has matured quite considerably over the years and it’s certainly set to continue with the imminent shift from a focus on cost per hire, to time and quality of hire. Additionally, with previous increases in direct sourcing and the evident decrease in role volume, agencies are walking away from role requirements as clients are expecting lower margins on one-off hires.

Traditionally, RPOs were seen as more successful in buoyant markets (when the concept was initially developed); however should RPOs now rethink their commercial structure to adapt to a market that is increasingly more fluctuant? Members reported that 15 years ago RPO models were more flexible and responsive to demand periods. However, in many instances nowadays contracts would need to be fully renegotiated in order to respond to hiring needs, perhaps highlighting a distinct lack of flexibility on both client and supplier side.

Effectively managing your RPO:

One of the first and most important jobs when deciding to engage an RPO is being fundamentally clear on why they are being used; be it, risk reduction, from a legality perspective or for their expertise. Additionally, the business needs to be clear who on is driving the process: Resourcing, Procurement or HR. Ultimately, the decision and process needs to be supported by all three functions and most importantly, fit for purpose.

When engaging an RPO, make sure they are providing you with a service worthy of what they are being paid for. With regards to talent pipelining, if they’re not planning 3-4 years ahead of time, they should be.

Our experts’ views:

a) When possible request a dedicated RPO resourcing team on your account to ensure a high quality of service and make recruiters truly feel that they work for your organisation

b) When developing the contract between the client and RPO, ensure that as a business you have ownership of all candidate information and data stored on the applicant tracking system

c) Work in partnership with your RPO and ensure that it’s fully embedded into the business; use Recruitment Business Partners to bridge any evident gaps

d) Make sure you periodically audit your RPO and iron out any alarming findings – engage an external company (such as Talent Collective) to conduct the report.

Building the in-house talent acquisition team:

One of the clear disadvantages of using an RPO is that skill-sets, relationships and talent pipelines aren’t being developed internally. Whereas in-house (providing the business and CEO are bought into the TA model), highly skilled teams can be developed to avoid spending out on RPO and agency usage. However, if a company believes in the direct sourcing methodology they have to be prepared to financially support and grow the function. This encompasses developing a solid referrals programme, investing in the right technologies, offering good financial incentives for recruiters and providing attractive training and progression packages.

Our experts’ views:

a) Employee head-count can be a key business driver and often resourcing functions are limited to a certain number of permanent employees; therefore using an RPO can be the logical solution. However, with an influx in the number of contractors, it might be advisable to support TA teams with these individuals from a head-count perspective and to meet demands outlined by the market environment.

The future of recruitment:

Concluding thoughts at the Think Tank saw members agree that clients will be more expectant when it comes to engaging RPOs and will progressively demand a more ‘fit for purpose’ model to meet their hiring needs. It was decided that this was perhaps more likely to be a hybrid approach, whereby an RPO or MV meets the peaks of recruitment (more project based)  and the internal TA team covers business as usual hires. This theory would be most effective if used in alignment with the business’s strategic workforce plan and five year vision. It was also agreed that currently, for in-house recruitment, the permanent market is helped by advances in technology, however the contingent market is somewhat constrained by speed of reaction and thus would be supported by specialist agency / RPO sourcing.

Finally, when the topic of global RPOs was discussed the general consensus was that why should a standardised recruitment process be adopted when the business ultimately is not standardised across all territories? It was agreed that dependent on region and type of hire, the right recruitment channel should be evaluated accordingly and that in this case one size does not fit all.

Takeaways:

  • Businesses are moving to a more blended approach of sourcing, and are developing each business / region to cater for specific demands
  • It is likely that RPOs will be used more for project-based hiring and will need to show a greater degree of flexibility and be more reactant to the needs of their clients
  • Be clear on who is making the decision to engage an RPO (Recruitment, Procurement or HR) and work together to fully understand why the model is being implemented
  • When developing and growing a TA team, make sure you have the support and buy-in of senior business leaders to ensure the function is adequately resourced and fit for purpose.

To find out more about the Think Tank RTT – RPOs vs. Talent Acquisition, which model works best?:

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