When it comes to the future of recruitment process outsourcing (RPO) and RPO companies, none of us have a crystal ball. Nate Silver, who wrote a bestseller and predicted the outcome of presidential election better than any other pollster, said that his goal is to get 80-85% of his predictions right, not 100%. To get the correct predictions, he says, test your hypothesis in the real world. I’m aiming for that here.
I have had the pleasure of putting into practice, testing and refining variants of what we call recruitment process outsourcing in a global setting since 2005. I’ve built business cases that supported or negated moving forward with RPO companies and I’ve implemented them at some large Fortune 100 firms. In addition, having worked as a talent acquisition leader for a leading RPO provider responsible for more than 1100 hires in a year, I’ve seen the internal challenges faced by recruitment process outsourcing firms and been able to stay current on challenges for the RPO industry today.
For years, RPO was viewed as an efficiency play with huge firms tapping outside vendors to hire a lot of low-level peoples as quickly and cheaply as possible. But times, they are a-changing Today’s RPOs are being brought in specifically to unearth the hard-to-find talent that companies need to fill highly specialized and critically important roles.
“RPOs used to be all about the time and cost of filling positions, but they are moving up the value chain,” said Stacey Cadigan, principal consultant for Information Services Group, a market intelligence firm based in Stamford, Connecticut. “Now it’s all about how to attract the right candidates to the organization.
“Efficiency will always be important, But companies today care more about the quality gains they can achieve from a business perspective.”
This shift is coming principally as the result of internal business pressures. On the heels of the slump, global hiring is rebounding and shortages of key talent are forcing firms to seek help filling strategic roles as they build up for a new growth phase.
According to the “Global Trends in RPO & Talent recruitment 2014” report from KellyOCG, nearly 3 out of 4 companies — 73 percent — plan to increase full-time hires this year, but sixty-one % say they face difficulties recruiting employees. Ironically, one of the positions they struggle most to fill is a recruiter. Shortages of the skilled recruiting staff were cited as the top impediment to hiring in the report.
At the same time many industries, including oil and gas extraction and construction, are bracing for the mass exodus of aging baby boomers. Those workers will inevitably need to leave the highly technical senior-level positions they may have held for decades, which will create a substantial talent gap.
This is driving large and midmarket firms to use RPOs a lot of strategically — streamlining their own recruiting method whereas reducing the burden on HR — and to use vendors’ experience to build their social media awareness and presence to attach with a broader candidate pool.