Top Ten Myths Around RPO (Cont.) #7

#7) RPO Doesn’t Work (or so I’ve heard…)

One of the reasons (among several) that I could never be a journalist is that, at heart, I’m a completely optimistic human being. People are generally good, I live in a great country, our economic system is the best in the world, and overall, life moves along in ups and downs, but its movement is always upward and onward. Our rising standards of living, our life expectancies, and just about every aspect of life in general on this planet is better than it was, say, 50 years ago.

Yawn….who wants to read that? Have you watched the Science Channel lately? Have you seen how violently our sun and planets will die, to say nothing of the universe itself in 100 trillion trillion years???!! As if we didn’t have enough to worry about right here and now…

The job of a journalist is, in part, to report the news, and it’s hardly news that everything is going along swimmingly. So by definition, they report on all the things that have gone wrong, whether the subject is the war in Iraq or a highly specialize business function. Which brings me to this latest myth, that the general outsourcing of recruitment services doesn’t work, doesn’t save money, doesn’t produce better candidates, and doesn’t deliver on it’s promise. And should you feel thusly, you’d be forgiven for thinking so, given that what little media you may have read about RPO may not have been entirely positive. Likewise, you may have the same impression based on media reports whether the subject is RPO, EPO, HRO, EBO, or any one of a dozen other “O’s” that comprise the alphabet soup of 21st Century business. Added to the media’s predilection for the depressing, is something more basic to human nature that every customer service department knows well: if you like something, you might tell 1 or 2 other people about it; if you don’t like something, or if something’s gone wrong regarding a purchase, you’ll tell several dozen others about your experience. So word of mouth, the best form of advertising, is a cruel double-edge sword indeed.

So yes, we’re all familiar with the failures, some of them spectacular, around HRO and its variations. No one ever said this was perfect. Far from it.

But what of the successes? The computer manufacturer who by outsourcing and assessing new inside sales reps grew revenue by half a BILLION dollars. The IT firm that shrank time to fill by 50% and will save $800K in recruiting costs this year, or the industrial rental giant that saved over $1M in recruiting costs last year, and looks to save even more this year. Why aren’t these in the news?

Because it’s not news when RPO does what it’s supposed to, and not many people want to read about how well someone else is doing, especially when they’re up to their elbows in alligators trying to get their own work done with ever decreasing resources.

So on the one hand you have folks like me, working with customers to see if RPO is a viable option for them, and talking about all these successes, and on the other you have this ostensibly “independent” fourth estate talking about all the risks, dangers, and failures that some well known companies have had with their own outsourcing experience. And of course, each of us is doing our job. Your job is to sort out the facts.

But to fully explode this myth, we need to understand several component that go into each of these deals, notably the promises made, the customer’s expectations, and the degrees of control over the recruitment process.

Promises Made

For 21 years, I’ve operated by the principle that if you under-promise, and over-deliver, you’ll have a happy customer. Does it work every time? Of course not. But especially in the last few years when RPO became a “mainstream” solution to an organization’s recruiting challenges, we’ve seen the promises around what RPO can do grow into proportions far in excess of its abilities to deliver. And yet those promise keep cropping up on the front end in part because there is an expectation on the part of potential customers that if they’re going to go down this road, they’ll see spectacular results. The reality, though, is that while the results I shared above are real, and quite frankly, not even all that unusual for Aon’s clients, it would be irresponsible of me or any other RPO vendor to suggest that we/they could guarantee the same or better results for your company. Every organization is different, and every process is different, and as the saying goes, “your mileage may differ.”

But do these kinds of promises get made every day? Certainly, and in some cases, the vendors making these promises know they are as hollow as a bottle of Guinness on St. Patrick’s Day. Thankfully, most consultants don’t operate this way, but there are enough who do to make it harder for every one, if for no other reason than they help foster an environment where customer expectations going into an RPO conversation have, at times, reached stratospheric levels.

Customer Expectations

Which brings us to those expectations. The vast majority of clients of RPO vendors initiated those conversations when something or every thing had “hit the fan.” Cost, customer satisfactions rates (or lack thereof), productivity metrics, you name it - they found they needed help. To say they were looking for a silver bullet would be an understatement. Jobs were on the line, and failure wasn’t an option. After all, it is a rare visionary indeed that takes a fully functional and lean recruiting organization that proactively seeks candidates to fill requisitions that don’t exist yet and has full control over its cost structure and then turns around and outsources it.

So part of what we need to manage is expectations - yes, we can save you money in most cases; yes, we can streamline your process; yes we can get you thinking strategically and proactively around future growth and add business value to your function within the organization; yes, we can help you find better candidates and do so faster, candidates who will turn into employees who perform better and who stay longer. Yes, yes, yes…but it doesn’t happen overnight. And when coupled to the fact that many organizations don’t or can’t outsource the entire process, the vendor is left with only partial control, which equates to partial results. So for example, if a company outsources only the sourcing component to a third party, but retains the same process (the one that’s taking 180 days to fill a requisition), it can hardly be expected that “better, faster, cheaper” is the likely outcome.

And yet partial outsourcing is far more common than total outsourcing, and it is in this area that we see customer satisfaction rates at their lowest - they’re expecting outcomes that are more in line with what customers see when they outsource the entire process to their RPO vendor, yet achieving results that are far different. And therein lie many of the failures.

Degrees of control

Does this mean that partial outsourcing is a bad idea? Far from it. But everyone needs to be very clear on what can be achieved and what the likely results will be. It is here that I think the analogy between RPO and marriage is quite appropriate. It is rare indeed that two people meet and get married after one date. Hey, it happens, I know, but it’s hardly the norm. I may have known I wanted to marry my wife after one date, but it took time for both of us to build the trust that comes with any committed relationship to make that a complete and total commitment in holy matrimony. Likewise with RPO, where with each phase, as more parts of the process are outsourced, trust between vendor and client turns into true partnership and truly amazing things can get accomplished.

(And please don’t let my wife know I’ve compared our marriage to a business arrangement. I love her madly, but I get into enough trouble with the laundry, and don’t want to have to explain this…lol)

The point being, of course, don’t expect what’s not achievable. And what is achievable, don’t expect it overnight. The company looking at RPO took months, if not years, to create its current state, and it will likely take more than a couple of months to turn everything around and make it a value added strategic partner to the business using process and cost efficiencies, rather than that “necessary evil” I’ve seen recruiting too often viewed as.

RPO works, and it works very well indeed for those organizations that are committed to squeezing out every competitive advantage they can from the engagement. Our case files are filled with the studies of both success and failure, and the successes are by an order of magnitude far greater than the failures. Will it work for you? That is a question we can’t answer here. As I said, your mileage may differ. But a conversation is what’s needed to determine that, and one you shouldn’t avoid having because you’d read somewhere, some time, that RPO doesn’t work. It works alright. The question is how well will it work for you?

Good recruiting,
Michael