What’s next: evolving the business case for Recruitment Process Outsourcing (RPO)
28 July 2020 — Whilst the COVID-19 crisis is far from over, many of us are starting to see restrictions ease and many businesses are starting to think about the future, if not the long-term future then at least the medium-term future and the potential of returning to growth. As companies look to some form of recovery they will naturally begin to consider whether their Talent Acquisition strategies are fit for the future and many will consider the potential benefits of outsourcing some, or all, of their resourcing needs.
As companies look beyond COVID-19 many will seek to move from a current position in which they have fixed talent acquisition costs driven by in-house teams of recruiters, to a position where their Talent Acquisition costs are variable and the risk of fluctuating demand (and the need to scale resources) is borne by an outsourced partner.
Having worked in Talent Acquisition for all of my career and having been with Alexander Mann Solutions for 16 years, it’s fascinating to see the extent to which outsourcing has matured and evolved. In my role as the leader of our Pharmaceutical and Life Sciences sector in Alexander Mann Solutions I have led many client engagements from initial discussions about the benefits of outsourcing all the way through to the establishment of a new outsourcing partnership.
Long gone are the days in which a business case for recruitment process outsourcing was founded primarily on reducing recruitment agency spend. My first client in the pharmaceutical sector was a highly respected organisation hiring roughly 900 new hires a year in Europe. Recruitment was typically managed by HR business partners who would utilise their preferred local recruitment agencies for most positions, resulting unsurprisingly in a huge level of agency spend. The business case for RPO was simple – we could deploy a specialist team of recruiters, sourcers and administrators and if agency usage was reduced from the historical run-rate of 50% to 25% it would pay for the solution.
In our first year of partnership we reduced agency usage to less than 15%, yet the real value we delivered was far broader. Having an expert and dedicated Talent Acquisition team in place across Europe enabled us to dramatically reduce time to hire by more than 30%, increase diverse hiring of external candidates by more than 40% and improve candidate satisfaction by more than 10%. I’m proud to say that eight years later we are now in the third generation of our partnership and continuing to demonstrate strategic value.
Very few organisations today, regardless of maturity, will have agency usage anywhere near 50% yet spend obviously remains a key driver for outsourcing. As companies look beyond COVID-19 many will seek to move from a current position in which they have fixed talent acquisition costs driven by in-house teams of recruiters, to a position where their Talent Acquisition costs are variable and the risk of fluctuating demand (and the need to scale resources) is borne by an outsourced partner. Cost reduction and cost mitigation can come in a myriad of ways, I have yet to come across an organisation for which there wasn’t a strong commercial business case for outsourcing some part of talent acquisition.
In the next few weeks, some of my colleagues and I have committed to sharing insights and examples of how outsourcing talent acquisition can provide flexibility and scalability, reduce costs and mitigate risks, enhance candidate and manager experience, and support critical initiatives, such as diversity and inclusion, and enhanced internal mobility.
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