The document discusses the challenges that companies face in managing their talent acquisition resources to meet fluctuating hiring demand. It argues that the traditional model leaves companies facing issues like increased costs, decreased quality, and stress on the talent acquisition team during peaks and valleys in demand. It proposes that using a recruitment process outsourcing (RPO) provider can help address these issues by allowing companies to scale up and down their recruiting resources more easily to match demand. An RPO provides a dedicated team to handle operations and allows the company to focus on strategy. This new model can improve key performance indicators, lower costs, and help companies avoid the "Groundhog Day" scenario of facing the same talent challenges repeatedly.

1. Avoiding
Groundhog Day
TIM MEEHAN
THE BUSINESS CASE FOR RECRUITMENT PROCESS OUTSOURCING

2. /02
Many firms struggle to
find top talent. This isn’t a
new problem, but solving
it can be an enigma.
The talent is out there, learn how
to break the code and find more
than your fair share.

3. A new talent landscape
The inventor Charles Kettering once said, “a problem well stated is half solved,”
so here’s how we define the problem.
• An organization’s supply of talent acquisition resources (recruiters) is built
to support a business plan
• However, for many reasons, business plans often change
• This means the demand for talent (hiring needs) often varies from the
original business plan
• To respond, Talent Acquisition implements countermeasures, but often
costs still increase and key performance indicators (KPIs) decline
• As a result, HR’s focus shifts from executing strategy to managing transactions
Sound familiar?
Given that business-planning cycles are now much shorter and more likely to change,
organizations need a far more agile talent acquisition model to keep pace.
INTRODUCTION /03
In this paper, we seek
to frame the problem and
propose another approach
as outlined below, in
four parts.
Part 1: The structural
challenges facing Talent
Acquisition (TA)
Part 2: Quality and cost
implications
Part 3: A new talent
acquisition performance
model
Part 4: Five decision
factors to consider before
making a change

4. /04
Part I: The structural
challenge facing
Talent Acquisition
Why agility isn’t part of the business plan.

5. Talent Acquisition usually has two types of resources: strategic and operational
Strategic resources engage in employer branding, workforce planning, mobility and
succession planning, just to name a few. Operational resources usually focus on the
hiring transaction and include activities such as candidate attraction, sourcing and
screening as well as recruiting logistics support and on-boarding.
These strategic and operational resources are combined and represented in the dark
charcoal line in FIGURE 1.
PART 1: THE STRUCTURAL CHALLENGE FACING TALENT ACQUISITION /05

6. Talent acquisition landscape
/06
FIGURE 1QUANTITY
TIME
Employees
CLIENT RESOURCES ARE OFTEN BASED ON AVERAGE OVER TIME

7. The structural challenge Talent Acquisition faces is reflected in the purple line in
FIGURE 2. The line shows how actual requisition demand can often vary greatly from
the demand the plan was built upon.
Economic conditions, site expansions, mergers or competitive activity all affect
hiring and thus the demand for Talent Acquisition resources. The result is periods
of imbalance, or disequilibrium, between requisition demand and the supply of
recruiting resources.
PART 1: THE STRUCTURAL CHALLENGE FACING TALENT ACQUISITION /07

8. Talent acquisition landscape
/08
FIGURE 2
GOOD
ECONOMY
NEW
SITE
NEW
COUNTRY
BAD
ECONOMY
MERGER
COMPETITION
QUANTITY
TIME
Employees
Requisitions
CLIENT RESOURCES ARE OFTEN BASED ON AVERAGE OVER TIME
BUT REQUISITION ACTIVITY IS SELDOM AVERAGE

9. The blue line in FIGURE 3 shows how talent acquisition departments often use
supplementary resources such as contract recruiters, or borrowed internal resources, to
respond during peak periods.
Note how the blue line never quite syncs up with the purple line. This reflects a
lag between requisition demand and the supply of recruiting resources. The lags
during growth or peak demand cycles are caused by the time to onboard, and make
productive, recruiting resources. The lags during decline or valley cycles are caused
by the hesitation to release recruiting resources once the volume drops. This structure
is also compromised by Talent Acquisition’s own resource limitations to find and train
recruiting resources when they themselves are most busy.
PART 1: THE STRUCTURAL CHALLENGE FACING TALENT ACQUISITION /09

10. Talent acquisition landscape
/10
FIGURE 3QUANTITY
TIME
Employees
Requisitions
Supplemental
CLIENT RESOURCES ARE OFTEN BASED ON AVERAGE OVER TIME
BUT REQUISITION ACTIVITY IS SELDOM AVERAGE
SUPPLEMENTAL STAFF IS USED, BUT NOTE HOW ON-BOARDING, OFF-BOARDING AND PRODUCTIVITY LAG

11. /11
Part2:Qualityand
costimplications
Whether the demand is at a peak, or in a valley,
or in equilibrium, cost and quality are impacted.

12. The rush to meet peak demand
The grey areas in FIGURE 4 reflect periods when demand for recruitment services
exceeds the supply of available recruitment resources. During these periods, talent
acquisition managers experience a range of obstacles that result in reduced KPI
performance and higher costs.
During periods of peak demand talent acquisition managers often divert resources
from recruiting talent, to recruiting and training supplementary recruiters so they can
recruit the talent. In effect Talent Acquisition must go backwards to go forwards.
This negatively impacts the business in many ways.
Cycle times increase because experienced resources are diverted to training roles.
Next, candidate quality declines as new resources engage and take time to be
effective. Combined, cycle times increase and quality of candidates decrease. By now,
hiring manager satisfaction has declined so Talent Acquisition is focused on filling
requisitions, not strategy. Unfortunately employment brand is impacted as job seekers
encounter undertrained recruiters and slow hiring processes. Finally, and most costly,
contingent search fees increase.
Counted together, these outcomes can greatly reduce Talent Acquisition productivity
and cost effectiveness and thus business performance.
/12PART 2: QUALITY AND COST IMPLICATIONS

13. Total cost of ownership
/13
FIGURE 4QUANTITY
TIME
Employees
Requisitions
Supplemental
REQUISITION DEMAND > RECRUITING RESOURCES SUPPLY: KPI ISSUES

14. The hesitation to off-board once demand subsides
The red areas in FIGURE 5 reflect the periods of time when Talent Acquisition has more
resources than requisition demand warrants. This is caused by Talent Acquisition’s
hesitancy to release recruiting resources until they are certain demand has subsided.
These requisition valleys result in a range of cost and quality implications.
The first and most obvious cost is contract recruiters. But what’s important to
understand isn’t their total cost, because they were supporting a real business need. It’s
more important to understand the cost, in lag time, between when requisition volume
started to decline and when they (and their tools, licenses, systems, etc.) were actually
off-boarded.
Another less obvious cost is the increased cost of quality. While KPIs improve during
valleys, it’s typically because the organization is over-resourced. Thus they are spending
too much to deliver an acceptable quality of service.
Finally, there are the costs associated with downsizing. The most obvious one is
severance to right size teams, but perhaps even greater is the impact on team morale.
Watching team members and friends, who helped the organization survive a peak,
be released, impacts team morale, employee engagement and ultimately loyalty
to the organization.
/14PART 2: QUALITY AND COST IMPLICATIONS

15. Total cost of ownership
/15
FIGURE 5QUANTITY
TIME
Employees
Requisitions
Supplemental
REQUISITION DEMAND > RECRUITING RESOURCES SUPPY: KPI ISSUES
REQUISITION DEMAND < RECRUITING RESOURCES SUPPLY = COST ISSUES

16. Finding equilibrium
The green shaded areas in FIGURE 6 represent the equilibrium periods when Talent
Acquisition resources meet the demand for recruitment services. However, even this
period harbors a hidden cost for employers.
While the equilibrium periods help recharge morale, the challenges incurred during
the prior peak and valley requisition cycles has a cumulative effect on talent acquisition
teams and the organization as a whole. No one wants to repeat those stress-filled
disequilibrium cycles.
Organizations must deploy solutions that are more agile to ensure they don’t keep
repeating the challenges each peak and valley cycle will surely create. Otherwise, like
Phil Conners, Bill Murray’s character in Groundhog Day, they too will live each day
the same over and over again. Leadership must take heed that if they don’t integrate
agility into their delivery structure, team members may use these equilibrium periods
to explore their options. Thus, the team members most needed to support the next
peak may not be there – further exacerbating the challenge.
.
/16PART 2: QUALITY AND COST IMPLICATIONS
No one wants to
repeat the stress-
filled disequilibrium
cycles. In fact, they
probably expect
their leadership to
deploy solutions
that will ensure they
don’t keep living
the same day over
and over again, like
Phil Conners, Bill
Murray’s character
in Groundhog Day.

17. Total cost of ownership
/17
FIGURE 6QUANTITY
TIME
Employees
Requisitions
Supplemental
REQUISITION DEMAND > RECRUITING RESOURCES SUPPY: KPI ISSUES
REQUISITION DEMAND < RECRUITING RESOURCES SUPPLY = COST ISSUES
SUPPLY & DEMAND ARE IN EQUILIBRIUM = OPTIMISED

18. /18
Part3:Anew
performancemodel
Recruitment process outsourcing (RPO) lets Talent
Acquisition easily scale recruiting capacity to meet
demand, better understand recruitment costs and
resolve the tensions associated with peak, valley
and even equilibrium requisition demand cycles.

19. In Part 1, we looked at how rapidly changing business requirements affects demand
for talent acquisition resources. Part 2 explored how regardless of a peak, a valley or
equilibrium cycle, costs and quality are impacted. In this third section, we’ll show how
using a recruitment process outsourcing (RPO) firm lowers total cost of ownership by
embedding agility into the business plan.
Starting the shift to RPO
As FIGURE 7 shows, the first step in the transformation requires Talent Acquisition to
separate strategic activities from operational activities. Resources for operational
activities, such as sourcing, screening, recruiting and on-boarding candidates, become
the responsibility of the RPO firm. This shifts accountability to experts while also
lowering internal fixed costs.
As shown in FIGURE 8, next an RPO partner is engaged and integrated into the Talent
Acquisition team. This dedicated RPO core team is tasked with understanding the
client’s processes, tools, culture as well as hiring manager expectations. They will also
determine how to improve KPIs by integrating RPO resources, methodologies, best
practices and continuous improvement ideas.
/19PART 3: A NEW PERFORMANCE MODEL

20. RPO landscape
/20
FIGURE 7QUANTITY
TIME
Employees
Requisitions
Supplemental
LOWER FIXED COSTS: CHANGE APPROACH TO STRATEGIC OVERSIGHT

21. RPO landscape
/21
FIGURE 8QUANTITY
TIME
Employees
Requisitions
Supplemental
RPO Core
LOWER FIXED COSTS: CHANGE APPROACH TO STRATEGIC OVERSIGHT
ACHIEVE STEADY-STATE KPIs: USING DEDICATED RPO TEAM

22. RPO benefits
FIGURE 9 demonstrates how RPO helps improve outcomes during peak periods.
Contract recruiters are replaced by the RPO provider’s own flex resources. This
approach helps align the supply of recruiting resources with requisition demand. It
also improves visibility of recruitment spending, allows talent acquisition departments
to scale requisition resources more easily, and frees managers to focus on strategic
considerations.
FIGURE 10 shows the quality and cost benefits of this new outsourced model. With
lag effects gone, KPIs improve during peak periods, ensuring the business secures
necessary talent efficiently and on time. At the same time, the RPO allows managers to
easily scale recruitment capacity down during slower periods, which results in a lower
total cost. And since downsizing was part of the business model, employee morale,
engagement and loyalty increases.
Yes indeed, Groundhog day has ended.
/22PART 3: A NEW PERFORMANCE MODEL

23. RPO landscape
/23
FIGURE 9QUANTITY
TIME
Employees
Requisitions
RPO Flex
RPO Core
LOWER FIXED COSTS: CHANGE APPROACH TO STRATEGIC OVERSIGHT
ACHIEVE STEADY-STATE KPIs: USING DEDICATED RPO TEAM
ACHIEVE PEAK PERIOD KPIs: USING RPO SHARED RESOURCES

24. IMPROVED KPI’S
LOWER TOTAL COST
RPO landscape
/24
FIGURE 10
Employees
Requisitions
RPO Flex
RPO Core
QUANTITY
TIME
LOWER FIXED COSTS: CHANGE APPROACH TO STRATEGIC OVERSIGHT
ACHIEVE STEADY-STATE KPIs: USING DEDICATED RPO TEAM
ACHIEVE PEAK PERIOD KPIs: USING RPO SHARED RESOURCES
MODEL LOWERS TOTAL COST OF OWNERSHIP

25. /25
IsRPOforyou?
Fivefactors
toconsider.

26. RPO provides fast-changing organizations with a scalable, more cost-effective way to
manage recruitment resources. The following five steps will help you decide whether
RPO could present a better path for your business:
1. Review current recruitment practices – Be honest: how does your firm respond to
unexpected peaks in recruitment demand? Do you seem them coming? Or are you
one phone call away from another Groundhog Day?
2. Tally the costs – Look at the cost implications we described in Part 2. How long
does it take you to train and make a recruiter productive? How many quit before
succeeding? Do search fees increase? Do you keep the recruiters too long?
What about severance costs?
3. Assess the quality – Try to measure the change in KPIs between steady-state
and peak periods. Do critical projects suffer because resources are diverted to
train new recruiters or staff? How does your recruitment process affect your
employment brand?
/26IS RPO FOR YOU? FIVE FACTORS TO CONSIDER
Do critical projects
suffer because
resources are
diverted to train new
recruiters or staff?

27. 4. Consider testing the waters – Many RPO programs start off focusing on
recruitment for one aspect of a business. Engage the stakeholders where a critical
challenge exists and determine if a pilot program may be beneficial. Keep in
mind that an RPO program requires enough volume in the pilot to warrant the
assignment of dedicated resources over an extended time. Ideally a pilot with
a core team in place would run a minimum of one year. That core team then
becomes the gateway to an extended RPO engagement.
5. Find a catalyst – Deploying an RPO program is not complicated but it does
require adoption and ownership with the hiring managers and end users.
Driving organizational alignment is enhanced when there is a common challenge
motivating the need for change. Using the examples outlined in this paper, identify
a handful of recruitment difficulties within your business and consider how RPO
could make life simpler for your talent acquisition team.
If you are seriously exploring options for outsourcing your recruitment
process, KellyOCG would love to discuss your current state with you and make
recommendations on how to get started. Send a request for consultation to
solutions@kellyocg.com or visit kellyocg.com for more information on our full
suite of Talent Supply Chain Management and RPO solutions.
/27IS RPO FOR YOU? FIVE FACTORS TO CONSIDER
Deploying an RPO
program is not
complicated but it
does require adoption
and ownership with
the hiring managers
and end users.

28. EXIT
ABOUT KELLYOCG
KellyOCG®
is the Outsourcing and Consulting Group of workforce solutions provider Kelly Services, Inc. KellyOCG is a
global leader in innovative talent management solutions in the areas of Recruitment Process Outsourcing (RPO), Business
Process Outsourcing (BPO), Contingent Workforce Outsourcing (CWO), including Independent Contractor Solutions,
Human Resources Consulting, Career Transition and Executive Coaching, and Executive Search.
KellyOCG was named in the International Association of Outsourcing Professionals®
2014 Global
Outsourcing 100®
list, an annual ranking of the world’s best outsourcing service providers and advisors.
Further information about KellyOCG may be found at kellyocg.com.
ABOUT THE AUTHOR
TIM MEEHAN is vice president, Recruitment Process Outsourcing, at KellyOCG and currently manages
several large RPO programs for the practice. Prior to his role in RPO, he worked in the Kelly Global
Solutions organization, managing teams in the Americas and Asia.