July 27, 2016

3 Key Business Outcomes to Expect From Recruitment Process Outsourcing


Recruitment process outsourcing (RPO) sounds like the promised land of talent acquisition, with its ability to improve efficiency, streamline recruitment, and enable you to hire higher-quality talent. But like all business investments, it needs to be directly tied to measurable outcomes for it to be right for your organization. It’s not enough to go RPO just for the sake of creating a better hiring experience for candidates and hiring managers. In addition to improving constituent experience, you have to predict and deliver substantive gains that will directly impact the business financially as a result of the improved experience.

Look Further Than Cost Savings

Until fairly recently, RPO was primarily a strategy to realize cost savings in recruiting through decreased agency job promotions spend and an overall reduction in cost per hire (CPH). While decreased cost can be a key business outcome of a good RPO engagement, what you really want to focus on is value creation. Reducing cost is definitely something to strive for, but in some cases it may not actually be possible given the increasingly complex work associated with driving a high-quality recruiting organization.

In addition to decreasing overall CPH, seek to turn recruiting from a cost to a revenue center. With an increasingly level playing field across industries, the ability to differentiate now comes down to people. The only way to deliver game-changing products, strategies, and customer experiences is by having the best people on board to do the work. By strategically investing in recruiting (versus primarily seeking to drive cost down), you can use RPO to create true business value.

Three Ways RPO Can Create Business Value

A good RPO will create value through improved efficiencies, better quality candidates, analytics, improved employment brand reputation, and overall better hiring experiences for candidates and hiring managers. These, in turn, drive three predictable business outcomes:

1. Revenue Generation

Your ability to transact in business – including mergers and acquisitions, global expansion, and developing new products – is directly enhanced or hindered by the quality of the people you attract and hire. When you hire better people, the doors of possibility swing farther open for your company and for what you can do for your customers.

LemonIn addition, the cost of an inefficient hiring process has direct negative impact on revenue generation. By quickening your average time to hire for revenue-generating positions by even 10 percent, you can significantly increase “revenue-generating days” and customer retention. As you consider going the RPO route, zoom out and look beyond the hiring process experience to the broader business – all the way to the impact on the customer. By tracking the actual revenue-generating impact of hiring better people faster, you can prove value.

2. Employee Engagement

Another aspect of revenue generation is the positive intrinsic and financial impact associated with improved hiring processes, introducing better-quality candidates to hiring managers, gaining efficiency in the process, and higher hiring manager satisfaction scores. When internal leaders can hire great people easily and quickly, they create stronger teams and productivity improves. When over-investment in recruiting is cut out, team members and leaders can more energetically focus on core competencies and prime deliverables. Recruiting goes from being a chore to a fun task associated with high ROI.

A consistently well-executed hiring process saves time and yields great people who uplift the entire organization, boost morale, and are capable of carrying more load. You can do more with better people, and when the entire process is smooth and reliable, your people will never limit your capacity to reach for those big, visionary strategic objectives that companies with lesser quality people and cumbersome hiring processes simply cannot hope to attain. Predicting and managing to a direct connection between good hiring and employee engagement, productivity, and job satisfaction is another way to prove value.

3. Enhanced Customer Experience

Many clients are a bit surprised by this one, because they are focused on what they will save, rather than what they will generate. When you map the correlation between an optimized hiring process and a more engaged workforce to revenue per employee and customer satisfaction, you quickly see that better talent leads to happier customers who spend more on your products and services.

FlowersThere is measurable sales impact when you have the right people you need when and where you need them. And there is obviously direct financial value to winning more customers, growing customer loyalty, and improving your overall reputation in the market. I recommend tying statistics like revenue per employee, net promoter scores, customer response times, customer retention and satisfaction, and corporate reputation and approval scores into your talent acquisition (TA) governance methodology. TA alone is not responsible for boosting these numbers, but it should be part of the conversation and companies should expect a successful RPO engagement to impact macro financial and reputation levers.

If you are vetting RPO providers, be sure to have them walk you through the details on how to analyze the various ways RPO will impact your business. Ask them to demonstrate how the value they create will lead to far-reaching business outcomes. Talent acquisition today is about creating and driving sustainable value across the entire organization. A good RPO firm can take you there, both as a trusted partner and a guide – but only to the degree that your company is open to transparency, honest feedback, and the willingness to do things differently than you’ve been done before. If you are, then you have the opportunity to truly raise your company to an entirely new level of competitive advantage.

Greg Karr is the executive vice president of Seven Step RPO.

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Greg Karr is executive vice president of Seven Step RPO. He has more than 20 years of experience within the recruitment industry and currently leads the company's client acquisition and business development strategies. His areas of expertise include: sales, business development, recruitment process outsourcing, recruitment process consultation, and client relationship management. Prior to joining Seven Step, he served in various leadership roles with Motion Recruitment Partners, a leading North American IT staffing services firm. He is an active advocate for the needs of individuals with autism and their families (please visit: usautism.org and littlefriendsinc.com). Greg was named an RPO Superstar by HRO Today in 2013. He is a graduate of Gordon College and lives in Chicago, IL.