Learn how you could earn up to $500 simply by referring your friend to Baraud. Learn More

The Job Blog

Why would a company consider Recruitment Process Outsourcing?

I was once told that to engage in the outsourcing of any function is like a married couple engaging the services of a surrogate mother. You firstly have to come to terms with the fact that you cannot perform the function effectively. You need to find the right surrogate, build a trusting relationship. Set out the ground rules and expectations. There is an agreed time frame, and compensation package. All parties know this will be journey of discovery and pain. With the end goal of everyone being happy. Sound too good to be true?

Despite the apparent vogue surrounding outsourcing, in the 80’s the US automotive industry was one of the first to go to bed with multiple partners in Asia. Since then Pharmaceutical, Electronics and Engineering have all followed suit and outsourced key elements of their business to the Far East.

But what happens if you need to outsource something a little closer to your heart. Something which is the life blood of your company. What if it’s your recruitment? No matter how you view it, recruitment is fundamental to any business. Whether you are from the school of thought that prescribes to recruitment is finding you the right people to give you that Golden Fleece of ideals, the illusive competitive edge. Or you follow the school of thought whose mantra is that effective recruitment means the office party will have an element of danger to it and that the people you meet in the canteen are less annoying and are less likely to as you “Are you going to eat that?” Regardless of your stance, Picking Professional People, Proves Profitable.

Recruitment Process Outsourcing, or (RPO) to its friends, is when an employer outsources or transfers all or part of its recruitment activities to an external service provider. So why would a company consider this as an option?

HR functions are generalist in their nature, they have a multitude of hats to wear, and recruitment is just one of them. In the changing landscape that is recruitment, and the war for talent which rages on all fronts in all sectors and within all working spheres, HR professionals are faced with the prospect of becoming recruitment experts and strategists.

This near impossible task proves even more allusive once you take into account that although recruitment maybe slowing down, the new market your company is now operating in requires you to hire people of a different ilk, as you seek out new opportunities in new markets, you need a new breed of person to capitalize on it.

All of these factors mean that more and more HR departments look at outsourcing to alleviate their workloads and permit them to compete and win in the war for talent.

In Grand Cayman, outsourcing the Immigration function is commonplace. More recently, the trend has been to outsource the recruitment function whereby an external service provider delivers sourcing and recruitment services and in some cases interview support for clients.

So what are the real benefits of outsourcing recruitment? Does it mean that the modern HR professional has more time to dream up more internal policies, forms and procedures to hinder people in their daily work? Perhaps let’s turn the argument upside down; what do HR professionals need more of in this current climate? More cost savings, more time to focus on HR strategy, and more well equipped people in their organization. Can RPO provide this?

One of the world’s first RPO solutions was provided by Manpower Business Solutions to Visteon Corporation a spin off from former parent Ford Motor Company. A team of 15 people was selected to reside at the Visteon corporate offices. The group included specialty recruiters in finance and engineering to source, identify, and evaluate candidate talent. Initially, the team was charged with managing direct hires for the product development group, which consisted mainly of engineers and staff groups that included HR and finance professionals. Within 18 months, the hiring of manufacturing positions was added to the RPO program. At the three-year mark, growth continued with the addition of hourly and salaried hiring for new plant launches and management of the program that assists current employees seeking other positions within the organization. After four years, the program was extended again, and Manpower Business Solutions started working with Visteon to redeploy talent when program launches came to an end or positions were eliminated.

The tangible benefits and Key Performance Indicators showed the model to be a success. It reduced cycle time-to-hire from 74 days to 27 days, built candidate retention at 90 days to more than 99 percent; hired nearly 5,000 people to date; consistently scored “exceeds expectations” on new-hire and customer satisfaction surveys and not to mention the reduction in hiring costs over 40%.

While today’s weakened economy has increased the number of active jobseekers, recruiting is no less challenging now than in times of full employment. On the contrary, recession places additional demands on the Human Resources Department. The inundation of resumes from unqualified applicants only complicates and lengthens the hiring process, putting you in jeopardy of losing first-rate candidates. More importantly, your department’s expenses may be under the very watchful eye of upper management.

However outsourcing does not absolve human resources leadership from the responsibility for delivery of HR practices and performance in the company, outsourcing does not automatically mean that line managers will stop using local human resources people as the first line of support for queries and emergencies. In any outsourcing arrangement, line managers will need to understand, accept and be trained to use the outsourced services.

RPO will not remove all your HR headaches it could prove to be that allusive competitive advantage.