November 20, 2011

Selecting a Recruitment Process Vendor

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Recruitment ProcessYou’ve made the tough decision to outsource your recruitment process, now what should you look for in potential vendors?

Selecting the right recruitment outsourcing vendor is almost as nerve wracking as choosing your spouse.  Okay, that might be far-fetched, but a survey conducted in 2008 by The Aberdeen Group, cites that 39% of companies switched RPO vendors. The primary reasons were poor results, poor support, and lower than expected Return on Investment (ROI).

Recruitment Process Outsourcing (RPO) is here to stay.  While it could present some problems just like outsourcing any business process, it holds the promise of reduced hiring costs, reduction in time-to-hire, and reduced technology costs associated with applicant tracking services, and other search tools and recruiting software used by internal recruiters.

So how do you go about selecting the right RPO vendor?  Here are some tips on making sure that you don’t “get hitched” to the wrong partner:

  • Metrics and Goals-Before you define your requirements, define your main goals and exactly how you will measure those goals.  I.e., if you are looking for a reduced time-to-hire, how exactly do you measure that today and what would you consider a reasonable goal?
  • Identify Must Haves-List your requirements in three columns, Must Have, Nice to Have, Not a factor.  The requirements should be based on current services that RPO vendors have TODAY, you don’t want to waste time with a vendor who doesn’t have experience with one of your requirements but is willing to add that service just to get your business, that methodology will drastically reduce your implementation time, and could damage your results.
  • Experience Matters-When you’re looking for an RPO vendor the number one factor that will determine the success is the experience of the vendor that you are working with.  Look for vendors that have worked in your industry and have overcome the same recruitment challenges that you have—which may have led you to outsource in the first place.  Don’t waste time with vendors who can’t prove their experience.  Scrutinize case studies, and get unbiased references.
  • Use your Networks-As an HR professional you should be networking with others in your industry or at least have access to your peers.  Reach out to companies that have successfully onboarded an RPO vendor and ask them to help you with your requirements list and to give you feedback on the vendors they are familiar with.  Do this BEFORE you reach out to any vendors.  This will help you formulate the questions you should be asking.
  • Short list method-This is such an important selection process you really need a 3-step process in determining your short list:
    • Step 1- Identify the Universe of potential recruitment process vendors.  This is something a consultant can do for you.  This would be listing all of the potential vendors that meet a very simple criteria (xx size, based in the USA, etc.).  Have the consultant  create a master list with pros and cons of each vendor.
    • Step 2- Break that list down to a manageable medium list of 8-10 vendors that meet a slightly stricter criteria than the first list.  Divide and conquer your research on this list, and don’t outsource this part solely to a consultant.  Your company needs to hold ownership of evaluating this medium list.  It would be okay to have the consultant work in parallel with you, but your management team, who holds a vested interest, should vet this list.  The goal for this step is to keep or discard candidates from this list based on more stringent criteria.  The goal here is not to get the list down to a specific size, you may keep all of the companies or very few of the companies, the size of this list doesn’t matter, what matters is that the companies on the list meet your criteria.
    • Step 3- You’ve got your short list now which hopefully isn’t more than 3-5 companies.  Decide on your evaluation process.  Will you do an RFP? An auction? Will you start with in person interviews? Can you leverage technology for the bidding process?
  • Be careful with an RFP- They can easily be impersonal and contrived.  Some companies have expert RFP writing teams which can sway you to think they are the best whereas another vendor might not be as interested in responding to RFP’s and therefore will supply a less “fancy” response but they may be a better fit.  If you have to do an RFP for formality reasons, keep it simple and focused on the vendor defining their experience and how that experience will directly impact your goals.  Don’t add a bunch of unnecessary pieces to the RFP, “just to see” what’s out there.  By the time you issue and RFP you should know exactly what you want (and maybe even who you want).
  • At the end of the day- If you get down to the last couple of companies and you still have 2-3 that are the front runners, make sure your final selection comes down which vendor you can see yourself working successfully with.  It may be outsourcing, but it’s still a people business and relationship matters.
  • The worst thing companies do at this stage is make a decision on price! Price should have been back at step 1 or 2. Think about it like this, would you hire a candidate based on salary requirements?  No, you would only have candidates at the final step whose salary requirements were already acceptable! If you are still using price to decide upon the front runners, you know that your selection process was flawed to start.

Lastly, when you award the contract, never give RPO vendors the impression that the contract will be bigger than it is.  If the vendor isn’t getting rewarded the way they were led to believe during the evaluation process, the results they produce for you will be lower. Setting incorrect expectations for both sides cause most of the problems associated with recruitment process outsourcing.

Your talent is the most vitally important aspect of your company – outsourcing the procurement of that talent is not a step to be taken lightly. Ensure that you follow a rigorous procurement method and that you intend to develop a highly personal, strategic relationship with the vendor that you pick.

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Marie is a writer for covering career advice, recruitment topics, and HR issues. She has an educational background in languages and literature as well as corporate experience in Human Resources.