TARGETING RECRUITMENT PROCESS OUTSOURCING

Transcription

1 TARGETING RECRUITMENT PROCESS OUTSOURCING NelsonHall HR Outsourcing Subscription Service 1

2 Definition of Recruitment Process Outsourcing (RPO) Recruitment Process Outsourcing is the transfer of operational responsibility for one or more recruiting functions, including recruitment administration, from the client to a services provider. RPO does not include standard recruiting services provided by a recruitment agency on a project-by-project basis. The contract needs to be a minimum of one year in length to qualify as an outsourcing service. 35 service providers were interviewed as part of this research 70% of the service providers hired only permanent employees Of the 30% that hired temp/contact staff, overall > 90% of their hires were for permanent employees. A trend noted across providers is that there is growing demand for contingent staffing and hiring for temporary workers 100% of the pureplay RPO Providers and 89% of the Multi-process HRO Providers offer end-to-end RPO services (defined further in the presentation) 2

3 RPO market s current focus on improving external talent acquisition... CURRENT MARKET 1. Recruitment process outsourcing is still relatively in its early stages, in comparison to other HRO services such as Payroll and Benefits Administration. However, it is becoming commonplace and is being outsourced by itself as a standalone RPO service and also as a part of multi-process HRO contracts. Organizations are outsourcing components of their recruitment functions (e.g. Sourcing, Selection, Administration) as well as their entire recruitment functions, including onboarding and internal recruitment, in long term relationships, to providers that have the recruitment expertise to improve the talent of their workforce. RPO arrangements constitute a small proportion (c. 4%) of the overall global HR BPO market; therefore RPO is an emerging outsourcing model within the more mature market for the HR outsourcing industry. Large companies account for over half of the global market 2. RPO is most established within North America 3. End-to-end RPO services are offered by almost all providers, but end-to-end RPO is purchased by 66% 4. Standalone RPO services are emerging more strongly that RPO services within multi-process HR outsourcing services 5. Partnering within RPO is critical with opportunities for: Technology companies to provide best in class technology to RPO providers, particularly with Applicant Tracking Systems (ATS), followed by Assessment partners Delivery of RPO within geographic region (where the provider is not located) to provide access to service providers who are in the same time zone, speak the local language and who can provide services onsite where required Offshore providers with low cost and highly skilled labor, particularly for delivery of non-client facing services such as sourcing of jobs 6. Much service delivery carried out from onshore shared service centers 7. Brand enhancement is emerging within RPO 8. RPO service vendors have limited involvement in their clients talent strategy/workforce planning 9. Pureplay RPO vendors still developing standalone RPO capability 3

4 will expand to incorporate wider talent strategy support services and support for internal staffing FUTURE MARKET 1. RPO to become a more established model, in small, medium and large sized companies, for organizations needing stronger recruitment expertise, to access talent they need, faster and cheaper; allowing clients to focus on their core business 2. RPO will continue its rapid growth, with high growth in support of recruitment in emerging markets 3. On-boarding will become an increasingly important component of RPO services 4. Several of the multi-process HRO providers will begin offering RPO as a standalone service within the next year and will also begin integrated talent management offerings. In addition to talent management, the top evolving services are improvement of employer branding and technology 5. Partnering remains critical to keep up with the demand for global growth and increased market share, with providers expected to: Continue to partner to increase geographical presence and improve recruitment expertise along with service delivery and technology capabilities Increase the number of acquisitions, potentially doubling the number currently done to nearly 3/4 6. Service delivery will polarize with high on-client-site and offshore delivery emphases replacing onshore delivery centers. Due to the war for talent, there is an increased demand for service providers to be more on site with their clients with back-office activities being driven offshore 7. Brand enhancement will become a key element of RPO services 8. RPO service providers will increase their involvement in talent strategy/workforce planning 9. RPO service providers will develop wider integrated talent management services 4

5 Major driver of RPO is the need to become more effective in the war for talent 1. Talent acquisition demand, War for Talent, shortage of skills - Talent Management is the top HR issue faced by organizations today 2. Need to reduce cost 3. Shifting risk/accountability to 3 rd party provider with recruitment expertise - Finding the right talent quickly is best left to those who specialize in it - Pureplay RPO Providers identified this as a driver by a 3 to1 ratio over multi-process HRO providers 4. Reduce time to fill jobs - By far the top named SLA/metric in this research 5. Focus on core business (recruiting not core competency for client company) - Ability to free up hiring manager time 6. Scalability to meet demand for peaks and valleys - Creation of variable cost structure to pay based on usage. This is an effective way to control costs should demand sharply drop 7. Need high quality people & increased diversity - Companies realize they need help in attracting talent that is representative of the clients they support 8. Improved recruiting process - Including a standard & systemic approach and centralizing the recruiting process - Outsourcing provides the means to achieve this more easily than trying to change in-house processes 9. Process improvement, foster innovation, and streamlined approach - Clients realize they have difficulty doing this on their own - Drivers 8 and 9 will help to significantly drive costs out of the business 5

6 Major benefits from RPO include reducing time-to-hire by 43% and cost of recruitment by 24% Lower cost of recruitment - Lowered by an average of 24% (about the same average given by both the pureplay RPO Providers (23%) and the multi-process HRO providers (25%)) 2. Improved quality and higher number of candidates - Consistent with talent acquisition demand 3. Reduced time to hire - Reduced recruitment cycle time by 43% - 49% by the pureplay RPO providers - 35% by the multi-process HRO providers 4. Ability to focus on core competencies - As they have a contractual/accountable relationship 5. Improved customer satisfaction - Pureplay RPO providers shared customer satisfaction ratings of 89% - Specialist expertise of pureplay RPO providers noted as a key benefit more so than for multi-process HRO providers 6