John Maxted, Digby Morgan’s managing director, looks at the issue of recruitment process outsourcing

We’ve all seen the steady procession of
blue chips signing up to the concept of recruitment process outsourcing (RPO) and there’s no doubt that the theory is brilliant. Appoint an external specialist to act not
just as your recruitment consultancy but,
to all intents and purposes, as your internal recruitment department. They know what they’re doing and they understand the market. Let them deal with all the hassles and headaches and even reduce your overall headcount while significantly reducing the cost per hire.

The facts are indisputable: where there is a large market such as I.T., secretarial or administration it provides companies with a great opportunity to take control of costs as well as regulating quality.

So, from an external perspective it can seem as if RPO is not merely a market trend but an area in which companies really can add value whilst saving money. However, is this always the case? Are there any areas in which outsourcing is not an instant panacea, but a recruitment method which can harm as much as it can heal a company?

When it comes to specialist recruitment such as in the field of PR or Human Resources, the market is considerably smaller. In these specialist sectors businesses may find themselves compromising on the quality of candidates as the incessant supply and demand wheel continues to turn but, due to greatly reduced rates that RPOs are prepared to negotiate, the best candidates may not be filtering through the outsourcing net. Many recruitment consultancies will only provide their best candidates - especially in a market when exceptional talent is in great demand and the consultancy has possibly had to pro-actively search out the candidate - when they can charge the full rate or, sometimes, only when a client is actually retaining them.

In these smaller, more specialist fields a solid relationship between a recruitment consultancy and the end business user is essential. Without a direct channel of communication, key candidate requirements can be lost or unknowingly misrepresented when passing through a third party. A frustrating “game” of Chinese Whispers can often ensue causing factors such as time scales and finances to escalate. This can impact unnecessarily on a company when ironically the introduction of an outsourced recruitment function was intended to reduce such issues.

Fundamentally, we have increasingly found that the best talent now will rarely actively seek a job move. Through advances in talent management and OD, companies have become much better at identifying HIPOs and putting in place strategies for retaining them. The RPO model assumes to a degree that there is an ample flow of talent in the external market and success in hiring this commodity is just a matter of process engineering. The fact is that in these instances success can only be assured through building and maintaining relationships with the best candidates in these fields and using specialist knowledge to pro-actively seek such individuals out.

Outsourcing companies work to the highest standards of integrity and confidentiality between their clients is always assured. However, in a market as tight and as candidate-driven as that which we are currently experiencing, there is a perception by some recruitment consultancies that in submitting a candidate through an RPO operator could mean that this candidate’s CV may be forwarded to a different client of the same recruitment company and disappear into the RPO engine without a trace. This clearly impacts on the relationship between recruitment consultancies and the clients they interact with, and it has been recently noticeable that some recruitment companies will not work with outsourcing businesses for this reason.

In conclusion, the recruitment process outsourcing model is clearly extremely successful and an excellent option for volume recruitment or in areas such as support functions in a business unit. However, to maximise on the undeniable advantages of this trend, businesses need to be adaptable in their approaches to their recruitment process. They need to recognise when to delegate sourcing to third parties and when the best talent can only be accessed through building close relationships with niche players who have exclusive insight within a sector.

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