By
Sushil Ghorpade
All businesses need people, some more than others. And hiring is a challenging yet extremely important activity that every business has to spend a lot of time and effort on. In recent years, technology has exploded, and with it, many industries like RPO have secured permanent leverage.
Many big companies like Coca-Cola, Pfizer, and Mastercard use recruitment process outsourcing to lower the cost to find rare talent across the globe. RPO has proven to work for most companies for a very long time, but there are certainly some anomalies associated with this method of sourcing talent. Let us have a look at how businesses miss detecting key signals that later result in a catastrophe.
If you own, manage, or lead a business, these are the things you must look out for while working with an RPO company.
• UNFORESEEN COSTS
One of the biggest reasons for the failure of this procedure is unforeseen labor costs. In these types of cases, a company may find that the cost to hire is higher than the original proposal. This might very well look like a breach of contract, but it is not.
There could be a myriad of reasons why the amount on the final invoice might look slightly higher than the amount originally calculated. RPO companies have to jump through many hoops to find the right talent, especially for high-demand-low-supply job titles like data scientists or people holding rare certifications, etc.
Finding this talent also depends on a lot of other factors such as job location, candidate’s location, compensation & benefits, commute time, the willingness of the candidate to relocate, and so on. This means RPO companies spend a lot of their time, money, and resources to find such people.
Companies that put too much emphasis on savings are usually unable to see the bigger picture. For example,choosing only the cheapest candidates reduces the quality of the organization, while on the other hand, choosing a top talent guarantees long-term success and profits.
TIP: Whenever negotiating with an RPO company, ask straightforward questions and scenarios to get the picture. Ask about hidden costs, taxes, the time required to hire a certain difficult position, what happens if you require more time to hire, who pays in such cases, etc. This way, you will foresee all costs before they get printed on paper in the form of an invoice.
• LACK OF COMMUNICATION
Communication is key. In many cases, operational goals and job descriptions are not clearly defined. Without having a clear understanding of the client’s expectations, the work cannot be structured according to the RPO company’s intentions. The work is outsourced indeed, but the cooperation cannot end there.
Outsourcing hiring processes requires regular, real-time, back-and-forth communication between both companies, and RPO companies must be seen as an integral part of the team.
TIP: Set a strong foundation of cooperation from day one. Schedule meetups in regular intervals, for example: once a day or once a week. Make sure the RPO company has fully understood the requirements and is working in the right direction. Avoid selected availability; important decision-makers on both sides must try to be available at all times until the objective is complete.
• POOR MANAGEMENT
Lack of communication causes unnecessary problems, which leads to poor management that is difficult to streamline. Employees who work in offices are in close proximity and therefore develop professional relationships. On the contrary, 3rd party service providers like RPO companies do not need to visit the client’s company regularly.
This can have a significant impact on the staff as it affects the existing management style. To address this issue, organizations must establish effective management relationships with RPO service providers.
TIP: Establish strict protocols with the RPO company to encourage and enforce clear communication practices. Once established, poor management can turn into great management in no time.
• LOSS OF PRODUCTIVITY & OVERBURDENING
A client companycan experiencea loss of productivity due to poor service offered by an RPO company. For example, your company requires three managers within the next 14 days, and your RPO partner assures you that those positions will be filled before the deadline.
However, that position could not be filled before the deadline and required around one month to hire three managers. This means your company experienced a loss of productivity for almost two weeks, and in these two weeks, existing employees were considerably overburdened, stressed, and had to work overtime.
Another recurring issue, especially for outsourced IT departments, is the risk of a complete network crash. Employees in such situations experience a considerable loss in productivity mainly due to poor customer service and usage of obsolete technology by the RPO company.
TIP: Ask RPO companies to disclose downtime figures. Negotiate on how to deal with extended deadlines.
• NO PLAN FOR SUDDEN GROWTH
Growth is great, but too much at once can paralyze your company. Take, for example, the mask and PPE shortage at the start of the COVID-19 pandemic in 2020. A huge, sudden spike in demand paralyzed medical equipment manufacturers who had to push the existing workforce into brutal overtime schedules just to try and meet the high demand.
Had they foreseen this demand and spoken to RPO providers beforehand who could supply the additional workforce, they would still be running at peak capacity, but this time, without overburdening and burning out the existing workforce.
TIP: Take into consideration sudden growth scenarios while negotiating with your RPO provider and understand their capacity to supply extra demand.
Also read: How to Spot Great Talent?
• ROADBLOCKS IN PROCESSES
One of the main reasons RPO relationships don’t work is that companies use recruitment and hiring processes that focus too much on the process rather than the actual hiring. Ideally, the recruitment process must focus on the only two players that matter the most – the hiring manager and the candidates themselves.
Instead, companies have complex processes that can often serve as a barrier against focusing on the important parts of the RPO process. This must be avoided at all costs.
TIP: Always remember, there is more than one way to get to the destination. Don’t get too caught up with the semantics of the arrangement, and trust your RPO partner to help you find the right talent.
• LACK OF EXECUTIVE SUPPORT
All types of RPO engagements need executive support, be it complete or on-demand contract-based. Analytics data from various sources indicate clients that had an executive assigned to them always had someone who knew the company’s goals and objectives in great detail. In addition, clients who adopted their executives’ methodologies, goals, and objectives resulted in very successful and profitable RPO relationships.
TIP: Check with your RPO partner if they could assign a dedicated executive to help your business oversee, manage, and reach the goals and objectives of your business. More often than not, you will be welcomed with an affirmative signal.
• LEVELS OF ENGAGEMENT
Determining the involvement of internal hiring managers and interview teams is crucial. The biggest problem businesses have with RPO is not enough engagement from internal hiring managers and teams.
This non-cooperation often leads to communication gaps which eventually leads to the failure of the RPO relationship.
TIP: Make sure all your employees, especially managers who have hiring responsibilities, are aware that an external RPO partner is helping with hiring and that full cooperation is expected out of them.
• CHOOSING THE CHEAPEST OPTION & TREATING RPO AS A COMMODITY
RPO is not a commodity, and any attempts to save RPO costs beforehand may have long-term adverse effects. Providers with the lowest cost have the highest probability of doing a mediocre job, and when the results are not what you need, the money you save on the initial RPO investment will be lost in either maintaining the mediocre resource or in hiring a new one.
The people you hire are directly related to your success or failure as a company. RPO is not an area where you want to be stingy.
TIP: Don’t be afraid to spend money. It often pays off in the long run.
• FORCING INAPPROPRIATE OR INEFFICIENT TECHNOLOGIES
Forcing your RPO provider to adopt technologies that it does not need or will not help the process will only cause confusion and inefficiency and hinder effective and timely results. Allow your RPO partner to do their job. Forcing something will force an unnecessary learning opportunity on your RPO provider.
They will take time to learn it, they will take time to integrate it with their systems, and they will take time to get used to it. This will affect the time-to-hire and not in a good way.
TIP: Allow your RPO partner autonomy. This boosts their confidence which results in you finding great talent on time.
• FINDING RIGHT CANDIDATES
This is the most common problem faced by recruiters. Not finding enough candidates for a job is not the problem. The real problem is getting qualified candidates to hit the Apply button. Skilled and experienced candidates are rarely desperate.
They are often confident in their skills and are sure in their ability to land a job whenever they like. However, this creates a problem for recruitment as it becomes very difficult to spot such talent before they apply anywhere else.
TIP: Ask your RPO how they source their talent and if they have a tried and tested methodology/process to find and reserve top talent.
• CANDIDATES GETTING OFFERS FROM OTHER COMPANIES
It is very common for applicants, especially those with skills that are difficult to find, to receive offers from multiple companies simultaneously. As a result, it is difficult for recruitment companies to attract them to accept their job opportunities. This problem can be solved by studying what the candidates hope to get from the job and what makes them happy about the job.
RPO partners can motivate candidates by clearly telling them what their clients offer. This may include wages, bonuses, employee benefits, etc.
TIP: Sit down with your finance or budgeting team and work out a plan to attract potential top talent. Research your competition, find out what they offer, and accordingly make your offer lucrative. Then let your RPO partner know about your plans so that they have all the necessary arsenal at their disposal to persuade and lock in top talent who have multiple options to choose from. This way, they come to you instead of going to your competitor.
• EXTENDED TIME-TO-HIRE
If the vacancy is left unfilled for a long time, it will hurt the company’s operations. In addition, recruitment delays put tremendous pressure on recruiters as suitable candidates often join competitors in the meantime.
RPO partners, along with the help of internal hiring managers, can attempt to solve this problem by reviewing the current recruitment process. Some unnecessary recruitment phases may be involved, which can be eliminated, thereby decreasing the time-to-hire.
In addition to this, after finding a suitable candidate, there should be rapid communication between hiring managers and candidates. The next phase of the recruitment process must begin soon. This helps to ensure that candidates do not have enough time to consider other vacancies.
TIP: Never keep the candidate confused and move with the speed of light.
Conclusion: If done well, RPO can become a huge asset for your recruitment and human resources functions and the entire enterprise. However, this happens only when the relationship is a true partnership. When all elements are in place and people are determined and motivated, the outsourced recruitment process can be used as an extension of the client’s own team to produce results in the form of cost savings and new hires.
By using recruitment services, companies can leverage the expertise of experienced recruitment professionals who have extensive experience in providing solutions to all types of recruitment problems. This helps to recruit the right employees who are most suitable for the organization.
RPO is the most effective technique used by successful companies to make profits and reduce costs. Therefore, for a business to prosper, the plan must be detailed and concise, and holding back on quality directly affects productivity and a good corporate culture.
Exela HR Solutions is an industry leader in recruitment process outsourcing. We understand these pitfalls, which is why we work very closely with our clients to understand all their needs and exceed all their expectations. Speak with us today to learn more about our offerings.
Sources: blog.rpoassociation.org | theplanetgroup.com | deloitte.com
DISCLAIMER: The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing the subject matter may change quickly, and Exela cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a licensed attorney in your area.