RPO, Study, Recruitment, Process, Outsourcing

RPO study reveals recruitment process outsourcing trends

The Recruiting Roundtable, a leading provider of recruiting research and decision support tools for executives and their staff, announced the addition of Recruitment Process Outsourcing to its host of decision support resource centers and its publication Recruitment Process Outsourcing: A Handbook for Scoping, Selection, and Management, which includes the results of a landmark study on Recruitment Process Outsourcing.

In 2006, the Recruiting Roundtable polled 163 recruiting executives from large organizations to determine how many recruitment processes were outsourced to a third-party. Although just 4.3 percent of responding organizations reported that the vast majority of their recruitment processes were outsourced and roughly 20 percent reported that they do not outsource at all, nearly three-quarters of organizations reported a portion of their processes were outsourced. To best determine how large-scale RPO engagements impacted cost and quality results, the Roundtable further analyzed the results of 43 large organizations completing its 2006 Recruitment Process Outsourcing Survey, of which 16 organizations were outsourcing a critical mass of their recruiting processes.

Recruiting Roundtable Managing Director Russ Selinger stated, “Most recruiting organizations today are outsourcing non-core recruiting activities such as background checks and drug screening. While many large organizations have considered outsourcing key recruiting activities such as candidate attraction, screening, selection and onboarding for all or part of their hiring needs—the actual incidence of this in practice is relatively small.”

Recruitment Process Outsourcing Survey Results

Respondents were asked how they expected key cost and quality metrics would change by incorporating RPO into their recruitment strategies and how metrics were actually impacted. Overall, results often fell short of expectations. Prior to outsourcing, one-half of these organizations expected service to hiring managers to increase. However, less than one-third of organizations achieved the manager service improvements as expected, nearly 20 percentage points below expectations. Furthermore, while more than half of organizations expected sourcing costs (excluding agencies) to decline, only one-quarter reported that these costs were reduced, more than 30 percentage points below expectations. Similarly, although roughly one-half of organizations expected agency costs to decline, less than one-third of organizations reported an actual reduction in agency costs, more than 20 percentage points below expectations.

Recruiting Roundtable Practice Manager David Williams noted, “While the overall feedback on large-scale RPO engagements generally fell short of expectations, our research reveals that some organizations are successful with this structure. Most often, they are using RPO either as a means achieve scale in their recruiting operations or as a way to meet a specific gap such as the lack of resources or expertise within a certain area. Many large organizations can generate this scale on their own while others have the opportunity to obtain benefits by outsourcing specific functions, business units or candidate populations to complement their insourced recruitment operation. We are very pleased to introduce new resources to help executives not only identify potential RPO opportunities but also provide best practices for managing those engagements successfully on an ongoing basis.”