In a business climate marked by hiring freezes, reductions in force, budget cutbacks, shotgun mergers, and the most uncertain business outlook of our time, the common wisdom seems to argue that pursuit of alternative service delivery models is better left for another day. However, the current economic environment presents an unusual opportunity for both buyers and providers of outsourced services.

1. No Better Time: For Considering RPO
Presented by
March 25, 2009
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3. Welcome!
Anne Nimke brings almost 30 years of experience in both human
resources and staffing to Pinstripe.
She is a recognized leader in the RPO arena seasoned veteran world of
talent strategy. She has lead strategic client engagements including RPO
Solutions that are the flagship programs in the industry, Anne has also
lead long term outsourced talent acquisition programs for professional,
non exempt and hourly staffing needs and consulting projects including
applicant tracking selection and implementation, employment agency RFP
Anne Nimke and contract negotiation, and HR/Recruitment Department realignment
Co‐founder and and reorganization.
Exec. Consultant
She graduated from Marquette University with honors and is currently a
member of the HR Outsourcing Association (HROA), is Vice Chair of the
RPO Association, is a member of SHRM’s National Staffing Special
Expertise Panel and is former President of the MMSHRM Chapter and co‐
chair of the WI State SHRM Conference.
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4. Pinstripe, Inc. designs, builds and manages high‐performance, large scale
Talent acquisition solutions. For clients in industries that include financial
services, technology, telecommunications, healthcare and others, Pinstripe’s
Innovative approach to Recruitment Process Outsourcing (RPO) integrates
sourcing, recruiting, hiring, on‐boarding, and engagement into a complete,
end‐to‐end outsourced acquisition and retention solution. For healthcare
organizations, Pinstripe’s Healthcare Group offers the provider‐side
experience it takes to help clients reduce their recruitment and labor costs
while continuing to provide the highest quality of patient care. Visit
www.pinstripetalent.com.
Source Acquire Hire Engage ROI
Pinstripe’s end‐to‐end Recruitment Solution
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5. Thank you to our presenters today!
Mr. Haworth is in his fourth year as head of the HRO consulting practice at Pillsbury Winthrop
Shaw Pittman, the largest outsourcing law firm. A true pioneer in the HR outsourcing field, Mr.
Haworth’s career milestones include establishing one of the first truly global internet‐based
human resource delivery systems for the Raytheon Company, the co‐founding of Fidelity’s HRO
business (the first full‐service HR‐Payroll –Benefits outsourcing offering), establishing the first
global BPO licensing program for PeopleSoft, and founding a $400M BPO operation for
KPMG. Mr. Haworth was most recently EVP at BrassRing (now Kenexa), a global leader in
recruitment software and Recruitment Process Outsourcing where he headed strategy,
business development, marketing, and international sales. John holds an M.A. in Technology
John Haworth Strategy from the Institute of Technology Strategy and Policy, a joint institute of Boston
Consulting Principal University and M.I.T. John was recently named 2009 “HRO Superstar Advisor” by HRO Today .
Mr. Steinig is a member of Pillsbury's Global Sourcing practice. Mr. Steinig concentrates on
advising clients in complex and strategic technology and “business process” transactions. He
has assisted several large and medium‐sized corporations with major outsourcing and other
critical technology transactions, including full‐scale outsourcing, system integration, software
licensing, application development and maintenance, hosting and staff augmentation projects.
Recently, his practice has focused on various business process outsourcings, including finance
and accounting, human resources, call centers and investment‐related processes. Prior to
joining the firm in April 2001, Mr. Steinig was general counsel and head of business
development for Bunk1.com, a private company focusing on the summer camp industry, and an
associate at the law firm of Latham & Watkins, where he specialized in mergers and
acquisitions, private equity transactions and general corporate representation. He received his
Michael A. Steinig J.D. from Harvard Law School and B.A. from Duke University.
Counsel
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6. • Pillsbury Winthrop Shaw Pittman has advised clients in over 500
sourcing transactions with a cumulative contract value in excess of $450
billion
• We are the only sourcing advisory firm offering integrated professional
services (e.g., legal plus sourcing, domain, financial, and change
management) under one roof
• We guide clients through the full sourcing lifecycle:
• scope modeling, delivery requirements
• business case development, RFP preparation
• service provider analysis and selection
• contract negotiations
• transition, implementation and governance
• We have over 20 years of experience in complex sourcing transactions,
in all domains of IT, F&A, HR, Procurement, and Facilities
• We have worked with and enjoy good relationships with a wide array of
service providers
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7. Polling Question
What is your role?
1. Recruiter or Recruiting Leader – 48%
2. HR Systems / Operations / Shared Services – 19%
3. HR / Advisor to process – 10%
4. Finance / Legal ‐ 0%
5. Other – 24%
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8. Overview
• What’s Going On?
• RPO: Key Contributor to the HRO Business Case
• No Better Time … For RPO
• Key Insights
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9. What’s Going On?
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10. What’s Going On?
• Status of markets : affecting the sense that recruiting is
necessary
• Status of corporate spending : severely curtailed, except for
revenue related
• Status of recruiting : in many cases departments are
decimated
• Yet 93% of work‐eligible Americans have jobs, are progressing
in their careers, and retiring
− There IS demand for recruitment
− The winners when the market returns will not have cut recruitment, but will
have invested in process improvements, technologies, and scalable solutions
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11. Polling Question
How do you approach recruiting now ?
1. End to end outsourcing for all or some jobs – 20%
2. Sourcing and screening by third party – 13%
3. Outsource drug test, background checks – 33%
4. Considerable use of contingent firms – 0%
5. 100% in house – 33%
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12. The Basics of RPO
• All or a significant portion of an organization’s recruiting function ‐ from talent
acquisition, to sourcing and screening, to interviewing, and the hire itself
• Can be end‐to‐end, replacing an organization’s entire recruiting function
− But often focuses on certain employee types, geo’s, etc.
− Usually includes talent management (applicant tracking) technology – either the
client’s or the provider’s own partner
• Often includes rebadging and on‐site presence
• Unlike traditional contingency recruiting, the RPO provider becomes a more
integrated extension of the customer’s organization – with consequences for
failures to make hires
• Rates are pre‐negotiated, and contracts often include minimum commitments
The RPO market is now reaching maturity
• Relatively large volume of in‐force contracts
• At least 15 credible and experienced providers
The complexity of the market and the contracting for these services points to the use of
advisors to speed the process and ensure the equitableness of the contract for both sides
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13. View from the Client / Advisor Side
• What we need : data, determination, and a driver (change
leader)
• Business cases : now more than ever
• What is possible: clients need to be realistic about the hard
dollar savings, but be careful not to omit other key benefits such
as :
− quality of hire
− employment brand building
− employee engagement from the moment of hire
− moving the function to a scalable and variably‐priced “utility”
• Internal dynamics: balance of power has to be with HR /
Recruitment going in, not with the lines of business and hiring
managers – although their buy‐in is essential (“a voice, not a
veto”)
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14. View from the Provider Side
There are CRITICAL SUCCESS FACTORS!
• Burning platform
• Top management and cross functional buy‐in
…AND Voice of the Customer (VOC)
• Standardization of internal processes
• Change management plan
• Communication plan
• Agreement on what success looks like
• Partnership – continued program management
• Ongoing process improvement – relentless adjustment
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15. Drivers of Provider Selection
HROA Talent Acquisition Challenges Report
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16. Total Cost of Ownership
• Cost per hire may not include all your “workforce acquisition costs”
• Review all hiring paths and their costs/quality
– Temporary help
– Temp to hire fees
– Agency costs
– Recruiting from within
– Independent contractors
– Candidate travel and lodging
– Relocation expenses
• Travel and lodging costs should be managed more closely
• Costs may be hidden in cost centers and line items
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17. Polling Question
If you are outsourcing or contemplating
outsourcing, what is your most desired
outcome other than cost savings?
1. Access to advanced technology – 11%
2. Improved process and cycle times – 44%
3. Improved candidate quality and reduced turnover – 28%
4. Make recruiting expense flexible & variable – 17%
5. Improve compliance, share risks with provider – 0%
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18. RPO: Key Contributor to HRO Business Case
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19. HRO Business Case
• Relentless pressure on overhead functions to cut costs
• HR is often prime target – a visible back‐office expense
• Primary HR spend
− Workforce Administration, Benefits Administration, and Payroll
− HR COEs, business partners
− But in many cases, efficiencies already have been achieved
• HR Systems
− Systems refresh (especially employee self service)
− SaaS solutions
− Again, in many cases, efficiencies have already been achieved
• Value‐add HR spend
− Learning and Development
− Recruitment
− In many cases often ignored in robust markets (“not broken,” “good
enough,” “the business pays for it,” etc.)
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20. The HR Savings Landscape:
Areas of Potential Benefit
• End‐to‐end HRO is in less demand in the current market
• Interest in outsourcing of some major HRO processes
remains strong
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21. The HR Savings Landscape: Areas of Potential Benefit
• Recruiting, even in today’s market, remains an expensive line item,
… and is often inefficient
• Level of savings depends upon:
• Current level of automation
• Current productivity ratios (e.g. HR to ee, Recruiter to req) and
appropriateness of those ratios to industry and geography
• Current level of support for an altered service delivery model
(e.g. self‐service)
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22. Sources of RPO Savings
• RPO providers can apply scale economies, geographic reach,
proprietary networks/databases and methodologies to reduce
costs
• Providers supply customers with opportunity to benefit from
powerful talent management tools and technology, while
amortizing the costs
• RPOs can greatly reduce (if not eliminate ) the use of third
party contingency firms with higher price points
• Improved time‐to‐hire cycles and reduced employee turnover
can produce large savings on top of reduced operations costs
• Quality of hire, a metric of great long‐term value, can be made
an explicit target for the RPO
Savings for RPO compared to in house operations can range between 20% and 30%.
Related improvements often occur as well, for example in the volume of applicants,
quality of hire, time to fill and other process cycle times, as well as employee turnover
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23. No Better Time: To Consider RPO
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24. No Better Time
• Counter‐intuitively, the current economic climate may
be an opportune time to consider further sourcing
initiatives
• The three main drivers of opportunity are:
1. Leverage a stronger business case
2. Favorable market engagement dynamics
3. Lowered execution risk
Pillsbury Global Sourcing believes in, but is not a booster of, the outsourcing industry.
If our clients’ needs cannot be met by the outsourcing model, we will tell them so.
However, we are of the opinion that the current economic environment could
represent an unusual opportunity for buyers and providers of outsourced services.
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25. 1. Leverage a Stronger Business Case
In the current economic environment the business
case for RPO is likely to benefit from these trends:
• More high‐level business support and advocacy
• Renewed focus on the business’s core competency
• Focus on cost, but with an eye to long term scalability
• RPO positioning the company to win when market recovers
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26. 1. Leverage a Stronger Business Case
In the current economic environment the business case for RPO is
likely to benefit from these trends:
• More high‐level business support and advocacy
Get in front of management with your plan for the recruitment function.
You have their attention as never before.
• Renewed focus on the business’s core competency
Unless your organization is a staffing company it is unlikely that recruiting is a
core competency. Take a leadership role in examining the alternatives.
• Focus on cost, but with an eye to long term scalability
Show that cost can be reduced, but that making the function more scalable
(up and down) will provide even greater savings in the years to come.
• RPO positioning the company to win when market recovers
Show that investing in RPO can help to identify and select quality candidates
now, and build deeper pools for the future. RPO can scale up quickly to win
the war for talent in recovering markets.
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27. 2. Favorable market engagement dynamics
In the current economic environment market
Engagement is likely to produce:
• More leverage for existing customers, especially if
they are willing to add scope and term
• More leverage for new customers to attract more
provider interest than usual
• More flexibility in financial terms, including potential
for provider‐supplied financing
• More willingness on part of providers to “think
outside the box”
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28. 2. Favorable market engagement dynamics
In the current economic environment market engagement is more
likely to result in:
• More leverage for existing customers, especially if they are willing to add
scope and term
Particularly in more uncertain environments, providers value additional scope or
longer committed terms. Good time to trade this for other concessions (e.g., pricing).
• More leverage for new customers to attract more provider interest than usual
Providers are hungry for new sources of revenue. Deals that were too small for some
providers previously may now be interesting.
• More flexibility in financial terms, including potential for provider‐supplied
financing
Important because often “good” deals with strong ROIs are forgone because the client
cannot afford the upfront investment. Providers can make this more manageable.
• More willingness on part of providers to “think outside the box”
This is critical because there are many different impacts on the financials, not just the
per‐hire‐price (minimums, etc.). May have more opportunities to create a good deal
for both parties.
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29. 3. Lowered execution risk
In this market, some of the ordinary implementation
risks of outsourcing transactions may be mitigated
through:
• Less questioning of the model; less rear‐guard
undermining of change
• Greater sense of purpose and commitment on both
sides of the deal
• Customer and partner focus on meeting the business
case
• More time to focus on future workforce planning
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30. 3. Lowered execution risk
In this market, some of the ordinary implementation
risks of outsourcing transactions may be mitigated
through:
• Less questioning of the model; less rear‐guard undermining of change
These massive projects are often controversial, and politics/self interest often create
obstacles. There may be more solidarity in this environment.
• Greater sense of purpose and commitment on both sides of the deal
These deals have greater importance to both parties now and are more critical to
achieving their goals.
• Customer and partner focus on meeting the business case
Providers know that at the end of the day, if the project doesn’t save the customer
money, it will be viewed as a failure, no excuses. They are incented to help you
make and preserve a business case. May require looking extra‐hard to find costs
that are buried in others’ budgets. Advisors and providers can help you.
• More time to focus on future workforce planning
True if things are slower than normal. Although, in some organizations that have
become too lean, you may have even less time to devote to new initiatives.
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31. Polling Question
What do you find most compelling about the
current market conditions and the opportunities
it presents? (Identify all that apply)
1. It is a good time to improve processes – 79%
2. It is a good time to engage service providers – 21%
3. I have senior management’s attention – 0%
4. Naysayers are fewer at this time – 14%
5. We can make the function scalable – 21%
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32. Final Key Insights and Q&A
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33. Key Insights and Observations
• Pillsbury Insight – John Haworth
“Don’t mistake lowered recruiting volumes for a time to “turn off”
recruiting. The companies that will recover the fastest are those which
keep the best talent engaged, acquire new talent and position themselves
to compete fiercely in the new economy that will emerge.”
• Pinstripe observation – Anne Nimke
“You can’t become who you want to be by remaining who you are!”
Max Depree, Author, CEO
• Pillsbury Insight – Mike Steinig “This environment demands creativity
and collaboration – it doesn’t have to be a zero‐sum game.”
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34. Questions and Answers
John Haworth Michael Steinig
Consulting Principal Counsel
2300 N Street, N.W. 2300 N Street, N.W.
Washington, DC 20037 Washington, DC 20037
tel: 617.559.9898 tel: 202.663.8062
john.haworth@pillsburylaw.com michael.steinig@pillsburylaw.com
Thank you to our speakers!
Pillsbury Global Sourcing, part of the full‐service law firm of Pillsbury Winthrop Shaw
Pittman LLP, is a team of both lawyers and consultants who have been at the forefront of
global sourcing since 1988. We advise clients on all aspects of outsourcing, including ITO,
BPO, technology transformation, and strategic services. Pillsbury has advised in over $500B
in outsourced contract value.. To learn more please register for our “No Better Time”
outsourcing webinar series at:
http://www.pillsburylaw.com/no_better_time_outsourcing_09
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35. Join Pinstripe for Future Webinars!
Sourcing Talent in Today’s Economy 04/22/09
TCO and ROI in RPO 06/24/09
Top Recruitment Strategies for Uncertain Times 08/13/09
Take‐Aways!
For more information –
animke@pinstripetalent.com
877.797.3379
www.pinstripetalent.com
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