September 13, 2022

The Business Case for Agile RPO: Better Hiring Decisions and Lower Costs

  •  Recruitment process outsourcing (RPO) grew from organizations’ desires to manage costs and maintain the right staffing infrastructure. But RPO extends far beyond agency or project staffing. It offers agile recruiting services for strategic hiring. 
  • The value of RPO lies in the ability to offer organizations insights around the right recruitment infrastructure based on their hiring needs. 
  • Steve O’Brien is an expert on the business case for RPO, pointing to the cost savings on agency and contract recruiter spending — not to mention the strategic value of bringing in an external consultant. 

No company can exist without its people. Recruiters help businesses make some of the most important decisions they will ever make: who to hire. How can organizations help recruiters make better decisions, manage costs and maintain the right infrastructure for their hiring staff? 

Recruitment process outsourcing (RPO) brings a strategic outside perspective to help companies strategically navigate the challenges of hiring with solutions that best meet their needs.  

Steve O’Brien, former president of staffing and talent solutions at job.com and current Senior Vice President of Talent Acquisition (Care and Corporate) at Syneos Health, is an RPO expert and champion who strengthens the hiring process for both candidates and organizations.  

O’Brien sat down with Proactive Talent CEO Will Staney on an episode of the TribePod Podcast. Together, they discuss the history and future of RPO, as well as the value of outsourcing to drive more strategic decisions and better investment of company resources. 

Renaming and Reframing RPO 

 Like many recruiters, O’Brien found his career path by accident, working at an agency. But after placing a candidate for the first time, he learned how the work could change job seekers’ lives.  

And that was the proverbial light-bulb moment. “I was like, ‘I need to be a part of this for the rest of my life,’” he recounts. 

O’Brien spent several years working for recruitment agencies before moving into RPO. By 2010, the RPO space was growing rapidly. The dot-com bubble had practically destroyed corporate budgets in the late 1990s, and the subsequent changes meant that many companies were more open-minded to cost-saving measures.  

Bundling services and considering larger recruitment projects not only helped manage costs but also gave companies access to infrastructure without the hard cost to staff. And the term “recruitment process outsourcing” arose from a desire for new language to express that the full scope of RPO services went far beyond agency or project staffing. 

RPO gives companies access to scalable solutions for industry-focused hiring, but manages the design and structure of the recruiting process itself more fully and strategically than staffing agencies. This focus on process is more customizable for each company’s needs and offers a broader view than hiring role-by-role — leading to greater long-term cost-effectiveness than working with an agency.  

More recently, O’Brien has coined his own nomenclature, calling RPO “agile recruiting services.” This phrase came from his time working to revitalize recruiting for Monster Energy.  

He was clear that his purpose wasn’t to focus on job boards, but to provide solutions through blending technology and human capital. He wanted to “put wind in the sales” of companies committed to their Talent Acquisition (TA) competency. 

“If you’ve decided TA is strategic, I know — because I’ve lived the trenches — that there are landmines waiting for you in places you don’t know,” O’Brien says. “I’m here to help you navigate all of those traps.” 

His approach to agile recruiting services meant helping companies navigate unforeseen hiring obstacles and adjust to the changing variables any organization’s TA function faces. 

Infrastructure Insights: RPO’s Key Contribution 

 O’Brien has a unique — and perhaps controversial — perspective on where RPO is headed. He believes the industry, at its core, is dialing into the essential features that drive value while moving away from some of the most sensational elements. 

While O’Brien certainly isn’t opposed to industry advancements like artificial intelligence, for example, he’s more focused on demonstrating the key contributions that RPO can make to an organization.  

“The value for RPO comes from the architectural insight on how organizational design needs to match the needs of the organization [the RPO provider is] recruiting for,” he explains.  

For instance, organizations that are attractive to and therefore have a huge pool of interested applicants may be a better fit for a flat architecture: individual managers aligned to individual recruiters. This works best because just a small percentage of the open roles actually require sourcing.  

For roles in companies with less of an applicant draw, a flat organizational structure is likely too rigid. As a result, using a cross-functional “tiger team” approach with several recruiters on board better upholds the hiring manager relationship. 

“These insights into the way infrastructure and architecture of [the hiring companies’] teams affect recruitment outcomes are some of the things that the RPO industry is going to give back,” O’Brien says. 

ODR

 

The Power and Value of Outsourcing 

O’Brien explains that an agile service provider is a particularly important asset on teams in companies where recruiter motivation may be lacking.  

In many cases, he says, experienced recruiters who have been reviewing high volumes of applications for years likely want to move into an advisory or expertise-driven role. But low motivation can negatively impact the recruitment process, reflecting poorly on the recruiter’s abilities (from candidates’ point of view).

“Your greatest source of value is the applicant that wants to join your company and who also has the skills,” says O’Brien. “If you have a conflict between the motivations of your staff and your source of value, it's predictably going to be destructive.” 

In these cases, an external advisor can come into your organization, speak to the strategic strengths of your TA team and identify lost value due to low motivation. These observations might not mean outsourcing all recruitment efforts to an RPO firm, but it’s important to prevent that loss in value to avoid sky-high recruiting costs. 

How external guidance can bolster recruitment efforts, and more 

Organizations need to avoid the temptation to simply keep their heads above water by focusing only on immediate hiring needs. Instead, they need to think long term, which often involves bringing in external help not only for filling roles, but also for other vital efforts like building an employer brand for the first time.  

Establishing an employer brand requires an enormous amount of work. Bringing in an outside perspective allows the process to take place much more quickly than when companies try to build their brand from the ground up on their own. 

Another reason to pull in an outside consultant? Politics. Because their perceived value is higher, a consultant tends to have an easier time achieving leadership buy-in of their input because they don’t need to participate in the internal office politics. 

O’Brien compares this effect to the court jesters who performed for kings. The jester’s role, in part, was to say things to the sovereign that other people couldn’t say because they were considered comedic or foolish. 

Because consultants don’t belong to the inner tribe of an organization, they can be blunt or controversial about needed changes without causing the kind of political damage that others might. 

The Business Case(s) for RPO 

For many organizations, talent acquisition is in charge of the most significant annual company investment. Even so, many TA leaders are strapped for resources. For RPO providers, helping their clients find the right recruiting solution often means assisting them with building a business case for RPO. 

O’Brien points to a few hard costs that an agile service provider can help with. 

  1. Agency spend

“The amount of money that’s spent on agencies is often [poorly] governed,” O’Brien explains. 

His argument is not to take money away from agencies. But he does want to help organizations lower hiring expenditures by increasing the number of roles they can fill for themselves. With clients, O’Brien makes the business case that preventing just one agency hire lets companies break even if they use his services for six months. (And of course, his goal is to achieve more than that!)

He aims to improve both the candidate’s and the hiring manager’s experiences, as well as to maximize their return on investment in comparison to agency spending. 

  1. Contract recruiter spend

Working with contract recruiters comes with a unique set of challenges and urgency.  

“You usually need contract recruiters when your workload is spiking,” O’Brien points out. “When your workload is spiking, you’re often firefighting and stakeholder managing. You’re not [focused on] onboarding and setting up your new contract recruiter to succeed.” 

These conditions can massively spike your expenditure, especially since contract recruiters cost much more hourly than your staff employees. Plus, your most expensive asset is least set up for success — not to mention complications due to contract management and business insurance.

O’Brien makes the business case that his services go beyond saving organizations money: “I can help avoid the oddity of, when your workload spikes, starving your staff.” 

Recruitment and TA as Strategic Initiatives 

O’Brien advocates for decision support for recruiters through data visualization (such as demographic analytics and performance data) and other innovations. As recruiters continue to move into a talent advisor position, their role will offer even more strategic guidance to organizations, which calls for providing them with elevated tools and resources, whether in-house or outsourced to an RPO firm. 

Through utilizing RPO and holistic talent solutions, organizations can gain the architecture insights, consultant guidance and expenditure savings they need to grow their business and strengthen their teams through better hiring.  
 


This article is based on an episode of TribePod, a HR community podcast by Proactive Talent, a recruiting, employer brand and retention consulting firm. Subscribe via Apple, Spotify or wherever you listen to podcasts for more insight into best practices in human resources.  

 

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