Towards a Blended Workforce - the Evolution of Recruitment Process Outsourcing (RPO) Models The UK s ever-fragmenting workforce and the associated challenges of resourcing With research published in September 2014 suggesting that 34% of the US workforce is working on a freelance basis 1 - and the picture for the UK beginning to emerge to suggest it is on a similar course towards significant levels of contingent working - the days of HR disciplines only applying to the employed workforce are disappearing fast. One key discipline, which is set fair to change as a consequence, is recruitment. For organisations that have historically engaged a Recruitment Process Outsourcer (RPO) to manage their permanent recruitment, the appropriateness of such a siloed approach is increasingly coming under question. Once under review, an interesting question starts to arise around the DNA of the enterprise best suited to deliver a blended solution. de Poel looks at the past, present and future of RPO solutions and the implications, from a contingent labour perspective. Breaking down recruitment silos When the numbers of non-employed workers become so significant over one third of the workforce, in the case of the US the composition of the contingent workforce takes on new dimensions. Far from the historical reliance on temps for ad hoc usage, the new contingent workforce contains a myriad of skills and levels of capability. This increase in both volume and strategic importance increasingly means that decision-making, as it relates to resourcing, can no longer be delivered in silos. If you a need a scarce skill within the organisation, it would be foolhardy for organisations to confine their search according to a preferred means of worker engagement. Equally, as organisations start to rebuild and reinvent themselves post-downturn, they are beginning to question whether, as they seek to bring a capability back into the organisation or acquire new skills, they will truly be needed on a short or long-term basis. For those that sought support from external partners for managing their recruitment function in the form of a Recruitment Process Outsourcing partner (RPO) - this has historically been very much an employee-centric recruitment exercise. Some organisations have extended RPO solutions through to the engagement of directly engaged contract and interim workers (including those delivering Statement of Work assignments), whilst fewer have extended it across the breadth and depth of contingent labour resourcing need. 1
1 odesk 53 Million American now Freelance, study finds: http://www.elance-odesk.com/press/53- million-americans-now-freelance-new-study-finds At the same time as RPO solutions were developing to support permanent resourcing needs, Managed Service Providers (MSPs - including Master and Neutral Vendors) were emerging to help organisations with sourcing and managing agency labour. In light of the above, many organisations are now starting to question the merits of combining aspects of the two solutions, into a blended approach, as opposed to keeping them separate. Considering what could, or should, be blended When considering the resourcing spectrum below, it essentially breaks down into three channels: Direct and third party (agency) sourcing of employed/fixed term resource. This is the legacy domain of RPOs. Direct sourcing of non-employed workers (temporaries, day rate and Statement of Work (SOW) contractors, consultants, etc.). This is a domain that a number of RPOs and MSPs have moved into. Third party (agency/umbrella company) sourcing of temporary and contract labour. This is the legacy domain of MSPs. Fig. 1: Resourcing channels that could be covered by a blended RPO 2
Within each category, there are specialist tasks and associated levels of complexity that need to be understood before decisions can be made around what could, or should, be blended into one solution. Within the route through to employment (open-ended or fixed term), the emphasis is on assessing a person s suitability to join the organisation and, once offered a role, on validating their credentials. This is a one-off process conducted prior to the commencement of employment. Within the direct sourcing of non-employed resource (temporaries, day-rate and SOW contractors, consultants, etc), the short-term nature of the association between the individual and the hiring organisations places more emphasis on the validation of a candidate s credentials than on cultural matching. This process is initially conducted prior to commencement, but requires robust processes and procedures of governance, including real-time visibility on all key aspects of validation, to ensure that the worker eligible to remain on assignment. Within the indirect sourcing of non-employed resource (through agencies, Umbrella companies, online facilitation platforms, etc), an additional significant area of responsibility comes into play beyond validating the worker. The task of validating that the supply chain is working in a compliant fashion with all of the regulations associated with the supply of temporary and contract labour, and that their treatment of supplied workers (accuracy and timeliness of pay, training/skills updating, appropriate communications, etc) meets required standards, is a complex one. Furthermore, the real-time, ongoing assurance of worker and supply chain compliance requires the use of robust systems and processes, expert knowledge and vigilance. As the aforementioned overview suggests, the knowledge, expertise and technological sophistication required to manage engagement, the further removed you are from fixed employment, increases exponentially. As such, when considering and potential blending of the management of resourcing channels under a broader MSP/RPO solutions, the following may be worthy of consideration: Which resourcing channels, currently managed in separate silos, would naturally sit better together? Groupings where there are synergies in processes include: o All direct sourcing activities for employed and contingent requirements. These are both areas where the validation requirements are governed by a contract with the hirer. o All indirect (third party) sourcing activities for employed and contingent needs (temporary, contract, SOW, online worker, consultancy, etc.). These are all areas where complex, multi-layered contractual arrangements are required to be in place 3
o and ongoing compliance relates to both the worker and intermediary suppliers alike. Management of these resourcing channels will increasingly need to be governed with strong procurement and contract management expertise, and with sophisticated technology solutions that assure real-time visibility and control. Employed versus non-employed activities. Employment requires a one-time validation process whereas all forms of non-employment require measures, of varying degrees of complexity, to assure the ongoing compliance of the worker and (where supplied through an intermediary) the supply chain. Exploring new Hybrid RPO models Even in the area of initial involvement of RPOs - the management of the sourcing of employed resource many still just capture the traditional forms of full, part-time and fixed term contracts. Notably, zero hours contract workers are often sourced by operations and the identification and onboarding of developmental talent (interns, graduates and apprentices) is often managed by a separate team (in-house or outsourced). As all appointment result in employment status, however, the one-time assessment of suitability and validation follows a consistent process which could be easily managed under one entity. Fig 2. The employed-resource RPO spectrum Following the logic through to those areas where, in addition to initial assessment and validation, there is an ongoing requirement to ensure that the worker (and any supplying intermediary) remains 4
compliant throughout their assignment, another grouping could be categorised as the management of the sourcing of all non-employed talent: Fig 3. The non-employed resource RPO spectrum As can be seen, this model has the potential to cover both direct and third party sourcing. A further alternative to consider is the management of all third party involvement in the sourcing of both employed and non-employed resource. This enables one entity to manage the onboarding process and ongoing compliance with providers who have capability across both areas. Additionally, the RPO ensures that the talent pools from direct sourcing and those of third party suppliers are maintained at sufficient levels to meet planned and reactive needs. Fig 4. The indirect (third party) RPO spectrum (for employed and non-employed resource) 5
Lastly, there is logic in grouping the activities associated with all direct sourcing activities, spanning employed and non-employed resource. As talent shortages become more acute and candidates continue to specify how they wish (rather than hirers stipulate) the means of engagement, there could be value in employers creating non-siloed talent pools rather than build them by engagement preference. The solution would be required to manage initial assessment and worker validation, and maintain ongoing compliance of non-employed workers which, whilst a specialist task, is not as complex as managing supply chain compliance associated with indirect sourcing. Fig 5. The direct RPO spectrum (for employed and non-employed resource) The essential attributes of any RPO model 6
Once the spectrum of recruitment channels (indirect and, potentially, direct) have been scoped, it is the role of the blended RPO to optimise their efficiency and utilisation. Key to the success of this orchestrated approach is the RPO s ability to ensure the robustness of the communities from which the co-ordinated solution is delivered. For solutions that involve the sourcing of non-employed labour within the scope, this will include: Appointing a panel of external suppliers (including neutral vendors and lead suppliers, where required) based, beyond quality and cost parameters, on their ability to demonstrate they have an established community of workers who will be committed to deliver on their behalf. Establishing an array of communities for an organisation through which direct sourcing activities can be as effective as required. Continually assessing the volume and quality of workers in the collective contingent community - across the spectrum of channels and providers - to ensure the aggregate pool is able to deliver on organisational needs. Monitoring the work-readiness and availability of the collective community Evidencing real-time compliance with all stipulations that govern contingent labour engagement within the organisation (including all legislative and commercial considerations). Providing a real-time dashboard on the non-employed resource deployment and availability, to enable informed decision making. Nurturing relationships with all stakeholders across the coordinated solution to ensure a constant stream of market intelligence into the hiring organisation. Assessing the impacts of legislative and organisational change (flux) on the engaged and work-ready collective contingent community. Once this coordinated approach to contingent resourcing has been established, the potential for organisations to realise the potential of a blended RPO solution increases exponentially. Outcome benefits include: The ability to make informed non-siloed demand management decisions The potential to realise additional savings The ability to leverage the true potential of essential third party suppliers (full range of capability, market insights, pool management, training, etc) Enhanced risk mitigation Workforce agility. 7
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