Guide download: Creating the business case for RPO

Aligning trends & opportunities

Business leaders the world over acknowledge the value of talent as their most critical differentiator. Attracting and retaining the talent needed to excel is a top priority for every CEO. This is especially true as organizations look for ways to create competitive advantage by leveraging global talent trends.

Trends

Opportunities

Adoption of remote work, digitization and automation is accelerating.

Integrate remote work, digitization and automation into standard operating models to establish first mover advantage, creating market leadership agility.

Economic uncertainty is tightening budgets and restricting or focusing investment activity.

Reduce fixed costs and free up resources to invest in growth.

The workforce is evolving from a traditional “employed” model to a blended model, with categories of contingent workers.

Deploy a more agile workforce as a strategic resource to better anticipate and quickly respond to shifts in market demand.

Organizations are prioritizing the creation of a diverse and inclusive workforce.

Use training, technology, and tailored value propositions to attract a diverse candidate pool and remove biases from the screening processes. Invest in partnerships and programs focused on inclusion to engage and retain talent.

Both candidates and hiring managers expect more personalized experiences.

Blend high-touch tactics with high-tech tools to enhance experiences in ways that boost your employer brand.

Organizations are increasingly feeling the effects of globalization.

Expand sourcing pools and hire the right employees with the right skills, regardless of geographic location.

Competition for specialized talent continues to be fierce.

Build and promote a high-value employer brand and implement innovative attraction strategies to ensure your organization stands out.

Generational and skills gaps are widening as expectations of work-life balance evolve.

Create a flexible process to accommodate changing requirements and expectations.

Rapid innovation and new technologies spur immediate adaptation.

Incorporate emerging technologies, like AI, in talent acquisition processes to increase efficiency, reduce costs and provide a superior candidate experience.

How can you leverage global trends?

Global trends accelerate change. The speed of change and number of trends impacting talent acquisition make it very challenging to keep up. There are opportunities to lead and grow if your workforce is aligned with strategic imperatives and appropriately resourced to meet business performance expectations. This requires the kind of agility and responsiveness you can achieve with recruitment process outsourcing (RPO). Great leaders leverage RPO partners to innovate and deliver results.

RPO offers the flexibility and scalability to create competitive advantage through talent acquisition. With compelling global trends poised to redefine market leadership, there has never been a better time to build the business case for RPO partnership.

Why RPO?

When you partner with an expert to design and execute a customized recruitment strategy, you can transform your approach to talent acquisition to better meet organizational objectives and elevate your role as a strategic talent acquisition leader.

RPO solutions are designed to streamline, standardize and accelerate hiring at a reduced cost. They encompass the people, processes and technology that organizations need to source and secure the best available talent. When you partner with an RPO provider, you can expect outstanding recruitment expertise as well as innovative recruitment technologies – from powerful applicant tracking systems and candidate relationship management software to talent analytics and reporting applications to the latest in AI and machine learning capabilities.

Where do I start?

When thinking about how to leverage an RPO solution for your organization, the first step is to evaluate your current state:

ASK about current recruiting capabilities, costs and results.
ANALYZE the answers you uncover.
ACT on the insights to create a talent acquisition advantage.

Start by considering how you would answer the following questions.

How predictable are your organization’s talent needs?
Is your organization effective at workforce planning?
Do your hiring managers and candidates have a consistent, positive experience?
How do you define a “quality hire” for your organization?
Are your recruiting practices aligned to your organization’s goals?
How do your recruiters hone their expertise?
Can you point to a compelling event that calls for a change in your approach to talent acquisition?
Does your organization participate in successful service-provider partnerships?
Is your current talent acquisition technology adequately supporting your recruiting efforts?
How much does your organization spend on talent acquisition?

If you aren’t satisfied with your responses to any (or all) of these questions, you’re not alone. Most organizations view recruiting through a fairly narrow lens. Few undertake a formal or even an informal exercise to determine where their opportunities for talent acquisition improvement may lie.

Missed opportunities can be costly on multiple levels. Not only can they create gaps in capabilities and stifle operating effectiveness, they have the potential to damage corporate reputation and negatively impact productivity and profitability, among other effects.

It is important to take an inventory of the current state of talent acquisition at your organization before beginning a journey of transformation. This stage is where in-depth analysis really pays off.

Uncovering the true cost of talent acquisition

It is a common mistake when calculating the cost of talent acquisition to review only those costs related specifically to a single department’s budget, even if that department is HR. In reality, there is an entire universe of hard and soft costs to consider, including expenses often hidden in multiple cost centers and obscure line items. Identifying your total cost of ownership (TCO) for talent acquisition provides a more accurate accounting of current costs and establishes a firm baseline for comparing alternative courses of action.

Costs directly related to sourcing

Agency fees
Job boards and other sourcing platforms and licenses
Hiring manager time/salary spent on requisition and candidate work
Recruitment team overhead
Social sourcing and advertising campaigns

Costs related to process effectiveness

Technology costs
Subscription fees for data collection and talent analytics
Training and upskilling for recruitment team
Market intelligence data
Process improvements

Costs related to your ability to attract quality talent

Candidate engagement initiatives
Employer brand building and marketing
Reputation management
Skills tests and screening tools
Talent attraction strategy and recruitment marketing
Talent community maintenance

Soft costs related to talent gaps

Impact on team performance
Time to productivity
Turnover/poor quality
Vacancy

Costs related to the hiring process

Candidate travel and lodging
Compensation trend reports
Relocation expenses
Onboarding

Not sure how to find these line items, let alone quantify them? You are not alone. RPO providers have experience working with organizations to identify costs and assess financial impact. Look to an RPO partner to help you establish your baseline costing framework.

What financial impact can you expect?

Every organization is different, but following implementation of an RPO solution, it is not unusual to see operational savings of 20-30%.

High-visibility targets for savings include:

More effective sourcing channels
Reduced agency usage
Faster time to fill
Condensed hiring cycle
Lower turnover

Other key impacts

One of the most surprising results of a TCO exercise is the lack of visibility into enterprise talent costs. A first pass can shine a light on the most obvious cost components. A deeper dive can bring unprecedented transparency to the process. It can uncover a host of opportunities to not only drive bottom-line savings but to deliver transformative impacts in three key areas:

Workforce impact: When you source higher-quality, better-fit talent, you set the stage for greater engagement, higher productivity and stronger performance. With enhanced collaboration and innovation across your teams, your workforce can deliver better results.
Strategic impact: When your workforce is more closely aligned with your enterprise mission, vision and values, it can better support your strategic imperatives and accelerate achievement of your goals.
HR impact: When you take steps to elevate your talent acquisition capabilities from transactional to transformational, you enhance the value of HR as a strategic business partner and raise your own profile as a business leader.

A qualitative viewpoint

Beyond traditional HR metrics, such as lower recruiting costs and accelerated cycle times, transforming your approach to talent acquisition can have a deeper impact on performance. In addition to both direct and indirect savings, it is important to weigh the qualitative benefits that RPO is particularly effective at delivering. In addition to crediting RPO solutions with finding higher-quality talent in less time, RPO clients point to a number of other benefits:

Allowed us to hire the best people, which in turn allows us to meet our business objectives.
Director of Global HR Service Delivery Fortune 500 Manufacturer

“… finding innovative ways to solve our business issues and to create a distinct competitive advantage in the pharmaceutical marketplace.” – Executive Director of Talent Management and Talent Acquisition, Pharmaceutical Manufacturer

“… enables us to quickly and seamlessly scale up or down to meet our hiring needs and frees up our team to focus on other strategic initiatives driving business growth.” – Global Leader of Talent Acquisition, Air Transport Services

…took HR from the function that held us back to a true organizational asset and competitive advantage.
Chief Executive Officer Health System

“… combines scale and execution with agility and innovation ... to secure the talent required to rise above the competition.” – Director of Talent Acquisition, Life Insurance

Key considerations before partnering with an RPO

An external talent acquisition expert can deliver significant value, but like any transformational effort, it is not without challenges. Before moving forward, consider these recommendations for successfully building an RPO partnership:

Clearly define strategic objectives

Be clear about what you want to achieve and why. Simply wanting things to be better is not specific enough. Work with your RPO partner to choose a few key metrics as the initial focus for the partnership and ensure they align with the overarching goals of your organization.

Detail the financial business case

A good RPO provider will be a consultative partner who will take the time to help you develop a detailed cost-benefit analysis for your organization. Be prepared to be as transparent as possible and share all relevant data with your RPO partner. With this data-driven business case in hand, you can gain a much better sense of how RPO can benefit your organization and how you can measure the impact.

Understand stakeholder priorities

It’s important to recognize that ultimate success is contingent upon buy-in and support from multiple stakeholders within your organization, from the C-suite to HR to procurement to the business end user. Some colleagues will be immediately supportive; others must be convinced. Talent acquisition is not something they think about every day. Do your research: find out what each stakeholder cares about and then determine how a strategic RPO partnership can provide a clear solution. For example:

C-Suite - Do I have the talent needed to achieve my strategic objectives today and in the future?
Business Managers - How do we get and keep the best talent when we need it?
Human Resources - Do we have the right talent at the right cost? Are we meeting the needs of the business?
Procurement - How do we get the greatest value at the lowest cost?

You need to tell a compelling story and present a strong business case that demonstrates how RPO can impact the economics and the quality of talent, both in the near term and in the future.

Be ready for change

Find one or more internal champions who are passionate about talent acquisition and in a position to not only secure buy-in from top management but also rally hiring managers across all functions. Align your stakeholders across the business and involve them in key decisions as you move forward. It is also important for your champions to recognize that change efforts may be significant. They must be willing to work within the organization to support and enable the RPO provider’s successful implementation and ongoing process improvement.

Commit to the partnership

Enterprise and hybrid RPO solutions work best when the provider becomes fully immersed within your organization and culture. You must be prepared to entrust them with your workforce and your company’s future. If you are hesitant to go all in on a seamless partnership, then you may not be ready for RPO.

Ensure a cultural fit

Your RPO partner should become an enthusiastic champion of your employer brand. Both organizations must work as one talent acquisition function to enhance hiring manager and candidate experiences. Consider communications styles and whether the RPO team supporting your company can seamlessly fit into your company culture.

One size rarely fits all

Just as talent is a unique differentiator for every organization, there is no single, cookie-cutter approach to talent acquisition. RPO solutions are highly scalable and can be tailored to align with a range of employer requirements. To deliver the best fit, the best performers and the best ROI, there are several different talent acquisition models.

Enterprise RPO - Full cycle outsourced talent acquisition for permanent employees
Hybrid RPO - Talent acquisition partnership between RPO provider(s) and in-house recruitment team, with each partner responsible for different aspects of talent acquisition functions, geographic regions, business units, etc.
High-Volume RPO - End-to-end talent acquisition focused on hourly jobs
Total Talent Acquisition - End-to-end talent acquisition for all traditional, full-time hires as well as all contingent hiring (e.g., temporary, freelance, contractor)

Making the business case

When your organization is ready to embrace a strategic partnership that can ensure better alignment between talent acquisition and enterprise goals, RPO can deliver a host of exceptional results.

Quality

RPO positions the company for today and tomorrow by helping identify and select quality candidates now and build deeper talent pools for the future.
RPO promotes better experiences through robust communications, strong promotion of your employee value proposition, rigorous brand standards, candidate-centric training for recruiters and dedication to service excellence.
RPO improves talent quality and cultural fit, reducing employee turnover, which can produce large savings on top of reduced operational costs.

Efficiency

RPO standardizes processes, streamlines the hiring cycle and increases the speed of hire.
RPO can apply scale, geographic reach and proven methodologies to reduce costs.
RPO can greatly reduce (if not eliminate) the use of more expensive, third-party contingency firms.

Flexibility

RPO is designed to scale up and down quickly, providing even greater savings whenever hiring activity fluctuates, whether due to an economic slowdown or during times of recovery and accelerated growth.
RPO represents a strategic commitment to continuous improvement and innovation, in which your RPO partner works with you on your transformation journey to increase your competitive advantage.
RPO frees up you and your team to focus on other strategic initiatives, with the full confidence that your talent acquisition needs remain a top priority for your RPO partner.