Recruitment Process Outsourcing

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ERE webinar from 7/22/09, presented by Scott Foos.

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Recruitment Process Outsourcing

  1. 1. ERE Presentation – 07/22/09 Recruitment Process Outsourcing (RPO) _______________
 Presenter: Scott Foos 1

  2. 2. Introduc+on
 •  Sco$
Foos
 –  President
&
CEO
Harbor
Light
Recrui+ng,
Inc.
&
Harbor
 Light
Management
Services,
LLC
 –  Execu+ve
Director
of
the
Recruitment
Process
Outsourcing
 Associa+on
(RPOA)

 –  Former
Board
Member
of
Staffing.org
and
co‐chairperson
 for
metrics
round
table
 –  13
years
in
business
&
systems
consul+ng
 –  13
years
in
various
execu+ve
opera+onal
and
IT
roles

 –  Proud
father
of
three
challenging
but
great
kids

 2

  3. 3. Changing
and
challenging
+mes....
 3

  4. 4. All
sectors
being
impacted
 4

  5. 5. Impact
to
staffing
&
recrui+ng
   Layoffs
=
much
lower
hiring
volume
   Employees
are
not
leaving
   Companies
are
moving
people
internally
to
fill
open
posi+ons
 to
avoid
severance/unemployment
claims
   Staffing
is
much
more
compe++ve
–
fees
are
being
cut
(not
a
 good
thing)
to
keep/acquire
business
   More
“in‐sourcing”
to
leverage
internal
labor
&
reduce
external
 expense
   Percep+on
of
abundant
supply
of
good
labor
   Reality:
Increased
volume
of
applicants
to
sort
through
with
 more
“desperate”
unqualified
applicants
 How
can
we
keep
exis1ng
business
and
grow?
 5

  6. 6. RPO
Defined
 •  S+ll
no
industry
consensus
on
a
defini+on
or
standard
for
RPO
 •  “Recruitment
Process
Outsourcing
(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
repor+ng.

In
all
 cases,
RPO
differs
greatly
from
providers
such
as
staffing
 companies
and
con+ngent/retained
search
providers
in
that
it
 assumes
ownership
of
the
design
and
management
of
the
 recruitment
process
and
the
responsibility
of
results.
 
 
Source:
HROA
 •  RPO
should
be
re‐1tled:
“Recruitment
Process
Op1miza1on”
 6

  7. 7. RPO
Defined
 •  Characteris1cs
of
RPO
Rela1onships:
 –  RPO
is
sold
at
“C”
level
–
not
at
the
recruiter
level
 –  Typically
longer
term
contracts
based
on
annual
hiring
volume
or
 high
volume
project
with
deadline
(e.g.
new
facility)
 –  Currently
most
RPO
contracts
are
for
direct
hire
posi+ons
 –  RPO
recruiters
work
directly
with
hiring
managers
–
no
middle
 person
in
HR
 –  Oaen
seamless
representa+on
of
employers
brand
 –  Disciplined
use
of
an
applicant
tracking
system
 –  Fees
usually
not
en+rely
performance
based
 –  RPO
usually
supports
more
than
candidate
sourcing
and
screening
 –  Emphasis
on
base‐lining
and
tracking
key
metrics
 7

  8. 8. Why
RPO?
 •  Small
Growth
Companies:
 –  Low
hiring
volume
does
not
jus+fy
internal
recruiter
 –  Need
to
focus
on
core
competencies
 –  Need
for
scalability
–
pay
for
what
you
need
when
you
need
it
 •  Mid‐market
companies:
 –  Can’t

jus+fy
investment
in
technology/sourcing
tools
needed
to
find
the
 best
candidates
 –  Internal
Recruiter/HR
Generalist
overloaded
–
usually
hiring
managers
are
 unhappy
and
applying
pressure
 –  Cost
of
con+ngency
support
(20%+)
warrants
looking
at
other
op+ons
 •  Large
cap
companies:
 –  High
volume
recrui+ng
=
leverage
to
structure
compe++ve
deals
 –  Interna+onal
expansion
–
global
recrui+ng/staffing
complexi+es
 –  Uncontrolled
decentralized
spending
buried
in
regional
opera+ng
budgets
 8

  9. 9. History
of
RPO
 •  Pre
2000
–
“vendor
management”,
“strategic
partnerships”,
“partner
 alliance”

 •  2000
–
2002
 –  “RPO”
name
coined
as
subset
of
“HRO
and
BPO”
 –  Media
emphasis
on
RPO
market
opportunity
and
high
profile
 contracts
drew
new
vendors
like
flies
 –  Increasing
Market
confusion
over
what
RPO
really
is
 •  RPO
–
short
term
fad
or
maturing
long
term
shia?
 •  2003
‐
RPOA
and
the
RPO
Alliance
were
formed
as
industry
 associa+ons
to
help
educate
employers
on
RPO
value
proposi+on
and
 define
standards
that
would
ensure
con+nued
market
growth
 •  2006‐2008
merger,
acquisi+on,
and
building
of
RPO
offerings
within
 most
major
staffing
firms

 •  2008‐2009
employment
market
melt‐down
drives
some
RPO
vendors
 back
to
tradi+onal
service
lines
 9

  10. 10. Why
RPO?
 Sco;’s
top
10
reasons
why
employers
try/buy
RPO:
 1.  Internal
frustraIon
–
internal
staff
not
geong
the
job
done

 2.  Scalability
–
pay
for
the
services
you
need
when
you
need
them

 3.  Vacancy
–
#
of
open
posi+ons
limi+ng
ability
to
meet
$
goals

 4.  Cost
–
lower
the
total
cost
of
recrui+ng
on
a
compara+ve
basis
 5.  ExperIse
–
“percep+on”
that
process
will
be
berer
managed
by
 RPO
vendor
that
brings
best
tools
&
prac+ces
to
the
table
 6.  Risk
MiIgaIon
–
hold
third
party
accountable
for
compliance
and
 record
keeping
 7.  Consistency
–
improved
performance
from
learning/repe++on,
 berer
accountability
for
improved
performance
 8.  Employee
RetenIon
–
lower
turnover
=
reduced
cost
of
 replacement
and
associated
produc+vity
loss
 9.  Metrics/AnalyIcs
–
finally
a
way
to
measure
the
ROI
of
recrui+ng
 10.  Because
their
compeItors
are
doing/trying
it
 10

  11. 11. Why
RPO
works
in
this
economy...
   Eliminates
overhead
not
being
fully
u+lized
   Provides
scalability
for
when
market
turns
and
 company
is
hiring
again
   Low
hiring
volume
allows
for
easier
transi+on
   Can
retain
exper+se
by
having
internal
recruiter
 work
for
RPO
vendor
on
account
team
   Pushes
risk
to
third
party
 11

  12. 12. Who
are
the
RPO
players?
 2008
“Bakers
Dozen”
–
source:
HROA
 1.

Right
Thing
Inc.

 2.

Spherion

 3.

People
Scout

 4.

Alexander
Mann
Solu+ons

 5.

Kenexa

 6.

Talent2

 7.

Manpower
Business
Solu+ons

 8.

Kelly
HR
First

 9.

Pinstripe

 10.

FutureStep

 11.

Adecco

 12.

Select
Interna+onal

 13.

H.L.
Yoh

 12

  13. 13. Fundamental
Differences
 •  RPO
sales:
 –  Longer
sales
cycle
 –  Selling
to
CEO,
CFO,
COO,
CPO
or
VP
HR
 –  More
complex
agreements
with
defined
service
levels
 –  Emphasis
on
strategic
versus
tac+cal
recrui+ng
 •  RPO
OperaIons:
 –  Client
expecta+on
of
finding
top
candidates
not
from
job
 boards
 –  Discipline
use
of
applicant
tracking
system
to
capture
and
 report
key
metrics
 –  Ability
to
support
EEOC
and
OFCCP
compliance
 13

  14. 14. Primary
Func+ons
 •  Forecas+ng/planning
 •  Requisi+on
rou+ng
and
approval
 •  PosiIon
AdverIsing
 •  Candidate
sourcing
 •  Candidate
screening
(may
include
assessment
tesIng)
 •  Reference
checks
 •  PresentaIon
of
candidates
 •  Background
verificaIon
(criminal,
DMV,
educaIon,
 employment,
licensing)
 •  Drug
screening
 •  Pre‐employment
on‐boarding
 •  Post
employment
surveys
(30/60/90)
 •  Exit
interviews
 •  Metrics
analysis
and
process
refinement
 14

  15. 15. Candidate
Sourcing
   Internet
job
board
posIngs
   Job
board
search
engines
   Candidate
lists,
associa+ons,
alumni

   Web

communi+es:
Google,
Facebook,
Linkedin,
Myspace,
 blogs,
   Direct
sourcing
from
other
companies
   Print
adver+sing
   Open
house
events
   Job
fairs
   Campus
recrui+ng
events
   Military/Veteran
   Community
networking
through
religious
and
other
 organiza+ons
 15

  16. 16. Secondary
Services
 •  Organiza+onal
analysis
and
alignment
 •  Standardiza+on
of
job
descrip+ons
and
employment
 agreements
 •  Compensa+on
planning
 •  Performance
management
 •  Succession
planning
 •  Referral
and
reten+on
programs
 •  Employee
orienta+on
programs
 •  Risk
audit
and
mi+ga+on
plans
 16

  17. 17. Metrics
 •  Total
cost
per
hire
 •  Time:
 –  Time
to
fill
 –  Time
to
submit
first
qualified
candidate
 –  Time
from
first
interview
to
employment
offer
 –  Time
from
offer
to
start

 •  Posi+on
vacancy
(Budget
vs.
Actual)
 •  %
of
applicants
submired
that
are
interviewed
 •  Avg.
#
of
applicants
interviewed
to
produce
1
hire
 •  Turnover
within
first
90
days
 •  Hiring
Manager
Sa+sfac+on
 •  New
employee
performance/quality
 •  Interviewed
candidate
experience
 •  Rejected
candidate
experience
 •  Recruiter
efficiency
 17

  18. 18. RPO
Challenges
in
2009
 •  Cancella+ons
of
open
job
orders,
hiring
freezes,
and/ or
drama+c
changes
in
hiring
needs
 •  Global
needs
of
clients
 •  Reloca+on
assistance/ability
to
sell
homes
to
 relocate
 •  Increased
compe++on
and
awareness
of
RPO
 op+ons
 18

  19. 19. Case
Study
 •  Na+onal
top
+er
security
services
company
 •  1200+
plus
commission
only
sales
people
 •  85‐120%
turnover
 •  Decentralized
recrui+ng
with
corporate
funded
job
board
 contracts
 •  RPO
sold
on
basis
of
reduced
turnover
and
“theore+cal“
lia
in
 sales

 •  200+
hires/month
in
Eastern
Region
 •  Nego+ated
$2,300/placement
 •  Program
manager
and
steering
commiree
established
 •  Con+ngency
based
contract
 •  90
day
replacement
guarantee
 •  Quarterly
Execu+ve
report
 •  Hiring
freeze
–
Doom!
 19

  20. 20. Wrap‐up
 •  Ques+ons/Open
Discussion
 •  Thank
you...
 •  Contact
informa+on:
 –  sfoos@hlrjobs.com,
305‐799‐3237
 –  www.rpoassocia+on.org
 –  www.hroa.org
 20


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