The recruitment process outsourcing (RPO) is usually motivated by the need of the focus on the strategic agenda of Human Resources. It can be motivated by the headcount reduction in Human Resources. The HR team passes the operational recruitment processes to the specialized outsourcing vendor, which manages, drives and executes job openings, job interviews and offering jobs. Most companies do not outsource the strategic processes, as they need to manage and lead their presence on the job market. Many outsourcing providers do specialize on the RPO, as it offers stability and builds the long-term business relationship.
The outsourcing of the recruitment and staffing is quite a common business relationship, and HR has to secure the smooth cooperation with the service provider. HR has to adopt processes, because the external vendor will participate on the internal HR processes. HR has to follow and watch the main RPO fundamentals.
Each efficient RPO has to focus on:
- Clear Outsourcing Terms and Conditions
- Stabilized and defined recruitment process
- Defined KPIs and regular measurement and reporting
- Clear payment conditions
- Clear terms for the usage of other vendors
The outsourcing is the sensitive process. HR manages the external vendor, which runs all procedures and processes. However, HR stays internally responsible and accountable for the results of the recruitment processes. The top management does not blame the external vendor; the executive managers blame Human Resources. It is the responsibility of HR to make the outsourcing contract clear, working and efficient. HR has to keep in mind its final responsibility and accountability.
The clear outsourcing terms and conditions make the relationship with the provider of services easy to manage. The terms and conditions describe and define roles of partners, what are the main deliverables of the relationship, the way of the communication, development of services. Additionally, they define the exact scope of services. The terms and conditions define, what services are included in the cost calculation.
HR should outsource clearly defined recruitment process and the outsourcing contract has to defined the boundaries between HR and the service provider. The unstable recruitment process is not suitable for the outsourcing, as the vendor has to make many adjustments, which are not agreed and approved by Human Resources. The unstable process makes the definition of boundaries between the vendor and Human Resources impossible. HR cannot define key performance indicators and the responsible vendor cannot meet them.
HR would lose the direct influence on the recruitment process, if it outsourced it. HR has to define clear key recruitment performance indicators, which have to be met. They need to be included in the contract, and the regular monthly meetings have to be held. The vendor has to propose changes and actions to improve KPIs as they are within defined boundaries. HR cannot implement changes; it can just propose changes to the outsourced process. Each change or proposal can have a significant impact on the cost of service.
HR has to manage costs of the recruitment outsourcing. The clear payment conditions have to be defined in the contract. HR should not pay the flat fee whatever happens. The vendor should deduct amounts from payment for all misses and KPIs not within boundaries. HR should pay the full amount for the service at 100% service level. Managers will ask many questions about the outsourced service and HR has to be able to defend the relationship with the vendor. HR should pay a small fixed fee for the service, and it can pay the success fee for each placement. HR should not pay for the regular operational stuff like number of job vacancies, number of resumes processed as it has no control over it.
HR has to agree and approve the utilization of other external vendors. Many times these additional services are not included in the contract with the outsourcing provider, and they increase the cost of the outsourcing services significantly. The exact conditions for the utilization of other vendors have to be defined, and the split of the additional costs needs to be agreed.
The recruitment process outsourcing is a standardized process today. However, organizations forget to make the contract clear. They believe that they will manage the recruitment process on a daily basis, but it is not possible. The contract has to define the clear framework for the outsourcing.