Great post today by Dub-Dubs. I think we are in violent agreement for the most part. My post was attempting to explain why corporate recruiting professionals are so often surprised and confused when they are told that their group is going to be outsourced. Mr. Dubs has taken that a step further to say that regardless of whether a corporate recruiting department understands its risks or not, RPO is going to be around for a long time. I agree.
Specifically, Dub-Dubs points out that the major advantages of RPO are in scale: RPOs not only perform their tasks cheaper than can be provided by the internal corporate department, they will also have access to a wider talent pool since they are attracting for many employers at once. Cheaper services and better talent equals a market lock.
That depends. A couple of points:
- I have written that the major advantage of RPO to an executive contemplating moving in that direction is the “one throat to choke” theory of risk management. This, more than the cost savings or the scale of the sourcing operating will be the major reason RPO continues to grow (and I agree with Senor Dubs on that point – RPO is here to stay).
- As long as the hiring requirements of the client operation are efficiency-focused the RPO model will be a reasonable method of reducing cost. I agree with Dub-Dubs on this – its all about scale. But by virtue of their business models, mindsets and cultures, RPOs will never be able to build a credible employment talent brand presence for their client organization. “High-touch, personalized service” and “reduce cost through massive sourcing operations” are incompatible at this point in time. Technology may in fact solve this problem eventually, but history has not shown that outsourcing operations that commoditize value through reducing operating expenses adopt technology early. So we won’t see this incompatibility resolved any time soon.
By virtue of this structural weakness RPOs will not be able to create a credible network with Brand Talent. Therefore, the structural advantage of an RPO is at odds with the movement of employers towards valuing talent more than capital. This is the major limitation of the RPO model: it doesn’t work well when talent is more valuable than capital.
Anybody who has read this blog knows where I stand on that issue. But in the meantime, RPO will progress full steam ahead. It is something that corporate recruiting departments are going to have to deal with. Hiding your head in the “my hiring managers like me!” sand isn’t going to be an effective counter-strategy.
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