IS RPO the same as Contract Recruiting?

I love this topic.  Let’s start with the formal definition.

Definition Recruitment Process Outsourcing

The RPO Alliance, a group of the Human Resources Outsourcing Association (HROA), approved this definition in February 2009: “Recruitment Process Outsourcing (RPO) is a form of business process outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external service provider. An RPO provider can provide its own or may assume the company’s staff, technology, methodologies and reporting. In all cases, RPO differs greatly from providers such as staffing companies and contingent/retained search providers in that it assumes ownership of the design and management of the recruitment process and the responsibility of results.”^[2]

Definition Contract Recruiting

An internal recruiter (alternatively in-house recruiter or corporate recruiter) is member of a company or organization and typically works in human resources (HR), which in the past was known as the Personnel Office, or just Personnel. Internal recruiters may be multi-functional, serving in an HR generalist role (negotiating, hiring, firing, exit interviews, employee disputes, contracts, benefits,recruitment, etc.) or in a specific role focusing all their time on the activity of recruiting.They can be permanent employees or hired as contractors for this purpose. Contract recruiters tend to move around between multiple companies working at each one for a short stint as needed for specific hiring purposes. The responsibility to filter the candidate as per the requirement of the client. (source wikipedia)

Now that we have moved past the formal definition, do you still think RPO is the same as Contract Recruiting? At the highest levels these two are very different.

RPO is about the outsourcing of a piece or the entire part of a process.  The RPO has responsibility to measure their effectiveness against this process they manage. They also have responsibility as a business process outsourcer to provide flexibility and consistency to their clients. Because the RPO’s are managing the process, many of them also divide up the roles and responsibilities to maximize effectiveness based upon the solution designed.  RPO’s will focus on the scope of the services required and may charge a management fee, a requisition release fee and a success fee or fee’s for qualified and interested candidates.  Again this depends upon the scope of work being outsourced, what portion of that work has variability and what part remains consistent.

Contract Recruiting is about having a person or a set of people perform a specific function. Their effectiveness is measured by the recruiting leadership, based upon the individual work performed.  The key word is “individual” work performed.  Contract recruiters charge hourly.  In fact, it is very likely to have a range of experience and deliverables within the contract ranks, due to the variation of work that may need to be performed by an individual at that moment in time.

Where CONTRACT RECRUITING AND RPO BLUR…

It starts at the RFP.  Since the late 90’s I have seen RFP’s that seek and desire  the “lack of commitment or flexibility of turning on and off”  a contract recruiter, i.e. have them on board for 2 months than let them go and apply that same principal to a RPO engagement.  This requirement extends itself into recruiter availability, location, the interaction with third parties, and measurements / SLA’s that do not fit to the work desired.  The final area impacted is the on-boarding / implementation of an RPO’s services.  An RPO brings to an organization, people, process and technology.  Depending upon the size and scope, there is an associated timeline to deploy this solution effectively.  On the flipside, a contract recruiter has to ramp up in the function for which they are performing.  Here is where it blurs:  Most organizations are used to having a contract recruiter come in and immediately begin to fill positions – or at least that is the assumption.  Remember a contract recruiter is one person and one function assimilating into an organization.  Whereas, an RPO is deploying a process, maybe technology and a set of people into an organization. Therefore an organization will experience a stabilization period of at least 90 days, before requisitions fulfillment and performance begins to normalize.  Again, an individual can typically hit the ground running much more quickly than a function that is performing a process. Therefore the expectations of performance outcomes in the first 90 days will be different.

When perspectives are blurred, this becomes very dangerous territory for the RPO provider and the Client, because expectations of performance and delivery are already starting in a misaligned state.

Yes an RPO does provide flexibility and scalability of resources, however to engage an RPO the decision must be made whether the Recruiting organization wishes to outsource a process, a part of a process or an individual function.  Depending upon the business requirements and the associated dependencies of success, this will determine whether contract recruiting, RPO or another solution is the most viable.

Recommendations

There is a place for both Contract recruiting and RPO. However the work performed is different.

Start with a complete understanding of your metrics, trends and organizational requirements.  Leverage an internal SME or external Consultant to design the best vendor enabled solution.

Build a RPF template that outlines your requirements and the true work to be performed.

When measuring success ask yourself whether you need to measure an individual or the success of the entire process outsourced?

Most providers have solutions architects to assist with the development of the solution. Provide a good level of detail under a formal NDA, to learn more about what each supplier will recommend as a workable solution.

For more information, feel free to contact:

Tracey Friend, Consultant
Tfriend@brightfieldstrategies.com