By Paula Santonocito
Outsourcing is often viewed as an opportunity to “get rid” of a function. While this approach may work for less complicated HR processes, a relationship with a recruitment process outsourcing (RPO) provider is just that—a relationship. As such, it requires a partnership approach with a willingness on the part of both parties to work through differences.
When Outsourcing
Companies decide to outsource employee recruitment for numerous reasons. For some organizations, the decision is driven by a desire to streamline processes and improve efficiency; for others, outsourcing offers greater flexibility, which can lead to cost savings. At still other organizations, outsourcing employee recruitment provides an opportunity for internal staff to focus on objectives that are more strategic in nature.
But motivation alone doesn’t ensure a successful outsourcing experience. Employee recruitment is a complex process. Add to this the fact that a recruitment process outsourcing arrangement is not an all-or-nothing proposition; RPO solutions come in various shapes and sizes. As a result, getting the right fit may require a few alterations.
Indeed, the experiences of best practice companies show that working with an RPO requires commitment, communication, and a readiness to make adjustments.
At Owens Corning
Take the experience of Owens Corning, a leader in glass fiber technology, as an example.
The company first piloted recruitment process outsourcing in 2004. At that time, the business model was attractive largely because of the one fee per hire, says James Connolly, talent acquisition leader for Owens Corning. Also attractive was the idea of working with experts in the recruiting space, people who knew about compliance regulations and the law. Through its request for proposal process, Owens Corning selected The RightThing, a leader in recruitment process outsourcing, as its vendor.
By 2006-2007, the RPO pilot program had grown to a source-to-slate solution, where The RightThing handled recruiting for nearly all exempt U.S.-based hiring, including jobs in corporate, administration, marketing, sales, information technology, customer service, production, operations manufacturing, environmental health and safety, science and technology, and research and development. The exceptions were and continue to be plant hiring and executive positions; plant hiring is done at the plant level and Owens Corning relies on retained search for executive positions.
One of the primary reasons for moving toward a full-scale program, says Connolly, is that human resources is dispersed throughout the company and working with an RPO allows for consistency of processes.
Be that as it may, oversight is required. “You want to make sure you provide the best service for your company,” Connolly says.
With this in mind, the focus on quality of hire is huge, he says. Meanwhile, the initial attraction of the RPO business model, fixed cost, remains an advantage. So, too, is the RPO’s ability to keep up with compliance and EEOC issues. Candidate care has likewise been a plus.
Another advantage Owens Corning has seen relates to the issue of flexing. The RPO can flex up much better than the company can internally and pull back more easily, Connolly says.
Nevertheless, there are downsides that have to be mitigated.
“Every account is a little different,” Connolly says, explaining that The RightThing was initially brought in to hire administrative employees. When the company decided to include higher level employees, a shift in recruiters was necessary.
In the day in and day out, there are also one-off situations that are not part of the norm. For example, at one point Owens Corning needed a college recruiter in a week. This is where a good partner makes a difference, according to Connolly, as well as where the RPO’s response builds client trust.
At the same time, an RPO must be flexible enough to adjust its approach to better serve the client. The RightThing, for example, takes a three-prong team approach: The RPO has a recruiting team, a phone interview team, and a team that handles back office functions and paperwork.
“The handoffs were a weak point,” says Connolly. As a result, Owens Corning indicated that it wanted the recruiters to do the phone interviews and The RightThing made the change.
Today, Owens Corning’s relationship with The RightThing is a key component of the company’s recruitment effort. The RPO oversees approximately 80 percent of the company’s recruiting.
Owens Corning recently added college recruiting to the outsourcing mix in order to expand its reach. The company is also piloting international recruiting, initially concentrating on positions in Brazil and Shanghai.
Yet, each new component requires attention to detail. Every time there are significant changes it requires change management and communication. “I need to make sure that I’m aligned with my customers,” Connolly says.
It also helps to be prepared. “In the beginning, there are always missteps, bumps in the road,” Connolly says.
But these get weighed in the context of results. “The RightThing has been very proactive in helping us build better phone screens,” Connolly says, indicating that the interview to hire ratio is approximately 3-to-1.
The RPO has also been instrumental in providing metrics. “It’s almost like one-stop shopping,” Connolly says. “The key is you still have to manage it, while just being a good steward of the company’s assets.”
At RSC Equipment Rental
The impetus for moving to a recruitment process outsourcing model was slightly different for RSC Equipment Rental, a leading provider of equipment rental services for the construction, industrial/petrochemical, manufacturing, and governmental sectors in the United States and Canada.
The company has 475 branches scattered throughout the U.S. and Western Canada, which are divided among 72 districts that report into 10 regions, which in turn report to headquarters in Scottsdale, Ariz. Each branch has counter people, who handle inside sales, mechanics, and drivers.
To maintain employment levels, the company requires approximately 700 sales people, 800 to 900 mechanics, and 1,000 drivers per year. Depending on growth, turnover, and new markets, this requires recruiting between 500 and 1,000 employees over the course of a year. Prior to partnering with an RPO in July of 2010, each region, through its human resources function, tried to manage the process.
The result, says Mark Krivoruchka, senior vice president of human resources for RSC Equipment Rental, was “a very inconsistent program to recruit, assess, and get people through the interview process.” In addition to creating consistency and reducing time to hire, an objective of working with an RPO was to change the role of HR managers. By moving them away from recruiting, HR managers could focus on better meeting the company’s strategic needs.
Working with an RPO was new for RSC, but not for Krivoruchka, who led the effort and has previous experience with the process and with the company selected, The RightThing.
However, because working with an RPO was new for RSC, it required ensuring that staff members understood the impact on their jobs. “This is a change management process,” Krivoruchka says, indicating as such it was necessary to explain to hiring managers that they would receive a slate of candidates.
At the same time, there were technology considerations, including that RSC wanted to automate the onboarding process as part of the transition in order to free HR leaders to focus on the backend of talent management.
Added to these challenges was a very quick ramp-up time of approximately two weeks. As might be expected, a few adjustments had to be made.
An RPO tends to hire 1,000 of one type of job, Krivoruchka says. The RSC arrangement with The RightThing called for what he refers to as a jobs mixed bag. The difference in approach required some fine-tuning.
One of the goals in working with an RPO was to reduce the time to hire, and here too adjustment was necessary. In order to get on the same page, Krivoruchka says RSC had to teach The RightThing that it operates in a service industry. The basis of the business is customer service and if a job is unfilled there is no service, Krivoruchka explains. “To create a sense of urgency has been a challenge,” he says.
To address the issue, RSC relies on metrics. The company has also brought in a director of talent, a full-time manager who is responsible for managing the relationship with the RPO.
In addition, when structuring the agreement, Krivoruchka was careful to put in an escalation clause to make sure each job is being addressed at various steps. The intent is to try to create a positive tension and an operating flow.
The company also set up a 90-day alert in order to track jobs in the 90-day cycle. This system, combined with communicating a sense of urgency, and efforts on the part of the RPO to expedite the process have made a difference. The number of jobs in the 90-day cycle has gone from 20 percent to 10 percent.
Krivoruchka finds that RSC has to stay on top of the RPO, and some of this work falls to regional RSC staff members. “Our people aren’t doing the work, but I expect the HR leaders in the field to have ongoing contact with CRMs in the field,” he says. “I hold the group accountable.”
He acknowledges that the arrangement is a true partnership and, as with other partnerships, there remain obstacles to overcome. “Flexibility and adaptability are not an issue. Speed is a huge challenge,” Krivoruchka says.
Some of it comes down to the nature of business itself, such as a case manager at the RPO getting promoted or the capabilities of individual recruiters. The approach to recruiting sales people, for example, is different from recruiting drivers and mechanics. It has therefore been necessary for RSC to let the RPO know where recruiter specialization is required. Krivoruchka says The RightThing has been responsive in making adjustments.
He advises companies entering into arrangements with an RPO to set their service level agreement expectations early, and to set realistic expectations. RSC ultimately seeks a 30-day fill and is currently averaging 40 days. Accordingly, Krivoruchka continues to push for a sense of urgency at all levels.
At the same time, he continues to remind staff members that they must continue to own outcomes. “You haven’t lost accountability and responsibility for the hiring process,” Krivoruchka says.
Paula Santonocito, a business journalist specializing in employment issues and author of more than 1,000 articles, has covered online recruiting since the early days of Web-based employment advertising and candidate sourcing. She is AIRS News editor and managing editor of Recruiting Trends.
