Defination : Managed Services / Recruitment Process Outsourcing
(RPO) is a form of Business Process Outsourcing (BPO) where an employer
out sources or transfers all or part of its recruitment activities to an external
service provider.
The external service provider may serve as a virtual recruiting department by
providing a complete package of skills, tools, technologies and activities. The
RPO service provider is "the" source for in-scope recruitment activity.
Differentiating between RPO and Other types of staffing :
Other types of occasional recruitment support, for example temporary,
contingency and executive search services is more analogous to out-tasking,
co-sourcing or just sourcing. In this example the service provider is "a"
source for certain types of recruitment activity.
The biggest distinction between RPO and other types of staffing is Process . In
RPO the service provider assumes ownership of the process, while in other
types of staffing the service provider is part of a process controlled by the
organization buying their services.
History of Managed Services / RPO :
While temporary, contingency and executive search firms have provided
staffing services for many decades, the concept of an employer outsourcing
the management and ownership of part or all of their recruiting process
wasn't first realized on a consistent basis until the 1970s in Silicon Valley's
highly competitive high tech labor market. Fast-growing high tech companies
were hard-pressed to locate and hire the technical specialists they required,
and so had little choice but to pay large fees to highly specialized external
recruiters in order to staff their projects. Over time, companies began to
examine how they might reduce the growing expenses of recruitment fees
while still hiring hard-to-find technical specialists. Toward this end,
companies began to examine the various steps in the recruiting process with
an eye toward outsourcing only those portions that they had the greatest
difficulty with and that added the greatest value to them. That’s when the
concept of RPO came into existence in the US and spread to Europe as well.
The initial RPO programs typically consisted of companies purchasing lists of
potential candidates from RPO vendors. This "search/research" function, as it
was called, generated names of competitors' employees for a company and
served to augment the pool of potential candidates from which that company
could hire.
Over time, as business in general embraced the concept of outsourcing more
and more, RPO gained favor among Human Resource management: not only
did RPO reduce overhead costs from their budgets but it also helped improve
the company's competitive advantage in the labor market. The greater use of
RPO was also said to be influenced by the ubiquitous use of technology to
increase productivity. This reliance on technology placed a premium on hiring
people with specific technical skills. This specificity required a targeted
approach to recruiting, and RPO is a strategy that can satisfy this need even
now.
While RPO is new to India, it is already a big industry globally and some
estimates suggest it is worth $30 billion. The RPO wave is catching up fast in
India. As the Indian labor markets become more and more competitive, RPO
is fast becoming more of a common solution. It is claimed that a greater
impetus for RPO is provided by the shortage of skilled labor. Although there
is abundant pool of labor (3 million/year) in India, only 10% immediately
hirable - lack of language skills, lack of practical experience, lack of
cultural/interpersonal fit, mobility are some of the factors because of which
shortage of skilled labor is faced by organizations and RPO is utilized by
some to fill this gap. The Indian labor market too has become increasingly
dynamic: workers today change employers more often than in previous
generations. De-regulated labor markets have also created a shift towards
contract and part-time labor and shorter work tenures. These trends increase
recruitment activity and encourage the use of RPO model.
ADVANTAGES:
# Reduces process variations
# Increases sourcing timeliness and expertise
# Improves quality of resumes
# Decreases time to fill
# Gives better leverage of technology
# Improves candidate nurturance
# Improves applicant tracking
# Enables meaningful reports
CRITICAL REQUIREMENTS :
For any managed services model to work there are some critical requirements or must
haves like
A. Executive sponsorship of the project. Any business model innovation requires
the executive to champion internal resistance into acceptance
B. Clear Partnership Definition - A detailed and clear scope of work to be defined
before agreeing on to the terms. The managed services agreement will have the scope
of work documented & agreed upon.
C. Clarity on the role & the deliverables from the onsite resource & the
same to be documented & mutually agreed upon.
D. Mutually agreed expectations to be jotted in the agreement. Prepare a project
plan with defined recruitment process & get a consensus on the same.
E. Historical data to be made available so as to help prepare a project plan blocking
all possible loop holes and deciding on the key deliverables.
F. Its imperative for the success of this arrangement that we have a buy in from
each person involved in the project from Clients side and everyone understand that
the intention is to meet the numbers and nothing else.