Time for a rethink on RPO

By Mike Trevor CEO of Comensura

Large private and public sector organisations have become too dependent on their relationships with recruitment consultancies, says Mike Trevor, CEO of Comensura. Tougher economic conditions merit a rethink on the growth of Recruitment Process Outsourcing (RPO) where there are much smarter options available.

Letís face it, recruitment consultants are not the most popular breed. In many peopleís scheme of things, they are on par with estate agents and City traders and few tears are being shed as executives in all three sectors see their earnings shrivel in the chill winds of the gathering economic downturn.

Recruitment consultants have always suffered from bad PR, but in fact they perform an important role in keeping the wheels of business turning and do a job that many organisations in both the public and private sector still struggle to address properly.

There seems to be something about the management of the recruitment process that people find difficult, partly perhaps because itís so specialised and partly because it is not running 24/7 and is therefore hard to maintain.

And this is where recruitment professionals come into their own. They work round the process problems of their clients and deliver a short list of good candidates. Well, thatís the theory.

But there is another way of looking at this situation. Clients are so bad at recruitment process management that they feel they have no option but to hand the whole problem over to consultants and pay huge fees. Itís almost a panic reaction. Whatever the case, the cost of recruiting management grade and specialist people is very high in many sectors. At Comensura we have seen this first hand in local government where we have been working with many authorities to reorganise the way they recruit temporary staff and bringing down costs.

Of course there has been a growing resentment of the fees paid to recruitment consultants who commonly demand and get around 20 per cent of their successful candidatesí first year salaries. For senior posts it may be considerably more.
One response to this concern and the demand for lower fees was the development of Recruitment Process Outsourcing (RPO). In a nutshell, RPO involves the consultants taking on the whole end-to-end recruitment process for their clients. They make full use of specialist technology and guarantee reduced fee rates whether they supply the appointee or not.

On the face of it RPO looks very attractive. The problematic recruitment process is outsourced; the RPO provider makes service level guarantees; and can claim to deliver impressive long-term savings to the client. Everyoneís a winner.

Well, not quite. The problem with most RPO contracts is that what looks like an open multi-vendor arrangement ends up being a single vendor one, with the vast majority of recruits being hired through the RPOís own consultancy. Almost inevitably, the overall quality of candidates suffers, savings start to evaporate and the whole raison díetre of RPO goes out the window.

However, the change in the economic climate gives clients the opportunity to look again at RPO as a solution and see what alternatives there may be. The consultancies are becoming increasingly desperate for business and many of them will not survive. Those that do will be the ones who are prepared to cut their rates to the bone and provide a first class service at the same time.

Any organisation still recruiting – and local government will be among them over the next few years – will be besieged by recruitment consultancies promising the earth for next to nothing.

But perhaps this is the moment for some serious rethinking about recruitment. Just because you find the process difficult to manage why throw yourselves into the arms of consultants? Why go for the most expensive option before you have explored all the others?

Let me explain. Most organisations have prospective employees writing to them on spec all the time. They also see dozens, sometimes hundreds, of CVs from people applying for specific jobs who are unsuccessful at the time, but might be appropriate for future vacancies when they occur.

Imagine if you could capture data from the most promising of all these potential employees and retain it in a Talent Database. Wouldnít it make sense to go through this database first every time a vacancy comes up just to check for possible interviewees?

Employers are often put off by advertising jobs directly because of the cost of doing so but also the hassle of being inundated with calls from recruitment agencies looking for business. However, another good source of candidates is the hundreds of job boards all over the internet. If you had a mechanism for posting your vacancies across all of these sites and picking out the best potential matches to your job specification without having to manage the calls from agencies and time wasters then you would use it every time.

Surely it would make sense to exhaust both these extremely cost effective options – in the case of Talent Databases it would actually be free - before turning to recruitment consultants as a last resort.

This tiered approach could save millions of pounds in recruitment fees, and it would change the status of agencies turning them back into proper consultants: people brought in to do a difficult job when all other methods of solving the problem have failed. That is a much healthier state of affairs than the current situation in which recruitment consultancies are the default option, and often resented for being so even by their own clients.

Obviously, technology and process are crucial to the delivery of this solution which would not only save considerable amounts of money but also achieve much higher levels of service and better quality of results on a long-term, sustainable basis.
Economic downturns bring all sorts of challenges but they often present opportunities for fresh thinking. How can we do things more efficiently? How can we save money? How can we solve long-standing operational problems?

There is no better time for taking another look at permanent recruitment, questioning the benefits of RPO and dependencies on expensive consultancies. The technology and the tried and tested management processes for a much more commonsense approach are available now.