It pays to look at your own blog every once in a while. It is apparent that I set expectations with my "RPO War" post and then never did anything with it. My delusions of adequacy were well ahead of my time availability. But with Kevin Wheeler's post today about "RPO being in, contingency being out" I did want to get some of my ideas out about this.
RPO in itself is not bad (although I think the only people who will make money in RPO over the long term are the consultants who recommend outsourcing, as they will be the same consultants who recommend bringing recruiting back inside in five years). The problem with RPO is that it is seen as a panacea for a deeper problem: a lack of understanding of the value of recruiting. If recruiting is just a way to get butts into seats (which it is at many companies), then reducing the cost and risk exposure of that function is a logical objective. RPO makes sense in this case. But if your business really does rise and fall with the quality of the talent in the organization (most high tech, entertainment and creative firms for instance), then total RPO is absolutely the wrong way to go. RPO firms are not accountable to the shareholders of the organization: they are accountable to the Service Level Agreement (SLA). And since you can't quantify (or even qualify) "quality of talent" effectively the SLA can't cover holding the RPO vendor accountable for the ability of the client to compete in the marketplace. Corporate recruiting departments must be accountable for shareholder value, and RPO firms simply never will be.
The easy-to-understand benefit of RPO is the "one throat to choke" theory of staff function management. HRIT is fighting with staffing, who is fighting with HR, and so you have "three throats to choke" if you have a staffing problem (the geeks, the recruiters and the hiring management interface). If the “C” level can make it so that there is only one group to blame when the jobs website goes down, or when time-to-fill is out of hand, or when hiring managers are disgruntled, then the belief is that they will get rid of a lot of headaches. This is the real RPO pitch. Firing employees is harder than beating up vendors.
All of this is baloney of course. US employment contracts are at will and therefore have far fewer protections under corporate law than an RPO vendor does. The switching cost from one internal recruitment leader to another is a fraction of the switching cost of one RPO vendor to another. Given the size of most RPO contracts, the RPO vendors understand that they have a built-in annuity that is almost impervious to client satisfaction.
RPOs can gain process efficiencies and cut costs, usually through call center sourcing methods and reducing the cost overhead of recruitment professionals. Again, if recruiting is a purely administrative function in your organization, complete RPO makes sense. But since RPO is being pitched as the cure-all that will solve world hunger and air pollution, it, like every other business fad before it (vertical integration and reengineering are two that immediately come to mind), will rise meteorically, fall just as fast, and then stabilize somewhere around "We have someone else hire for non-critical / high-volume positions, but the core recruiting organization, process and ownership is strategic and therefore kept inside."
Finally, the "one throat to choke" theory of management can be inspiring to the "C" level manager who feels overwhelmed by the thought of being accountable for a staff function that they don't understand and which feels like a non-stop liability. But if your staffing organization is failing because the geeks, recruiters and hiring manager interface are all fighting, then you have a lack of leadership that an RPO contract won't solve. You can band aid that problem by giving it to someone else, but the issue will raise its head in other areas. Better to solve the real problem rather than play corporate "whack-a-mole" as each successive leadership-inspired problem raises its head.
Its not as thorough as I would have liked, but there it is. RPO can solve some problems, but should be viewed as one of many tools available to the corporate recruiting problem, not as a cure for the common cold.
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