As your talent needs grow, the age-old dilemma of “buy or build?” is no longer a binary choice. Instead, those options have expanded to include leveraging contingent labor or relying on AI to complete simple, repetitive tasks. Knowing when to leverage each approach is essential to achieving true workforce agility, but determining that isn’t always easy. You should begin by asking some difficult questions and undertaking a comprehensive self-examination.
Only after you’ve completed this stage can you make an informed decision on the best approach and win stakeholder support with a compelling business case. Consider the following necessary steps:
- Define business goals and objectives that align with talent strategy
- Determine the current state of recruitment
- Determine the desired future state
- Map all possible routes to achieve your goals
- Perform a SWOT analysis for each option
- Prioritize approaches and the investments needed to achieve each scenario
- Assess internal and external capabilities to reach the desired future state
This first step is absolutely necessary, whether you are considering outsourcing or not. If your desire is to transform your current talent acquisition strategies and recruitment processes, you should measure how well your internal function performs on fundamental metrics, such as cycle time, monthly requisitions filled, on-time delivery, open requisitions, headcount and others. Without this clarity, there can be no road map and no determination of success.
Both internal investment and external solutions require the participation of all stakeholders involved in the talent acquisition process. These include HR leaders and business partners, members of the C-suite, line leaders, hiring managers, procurement, marketing and legal. The objective is to clearly define the goals of each party and determine which solution best meets everyone’s needs today and in the future.
where will RPO or internal teams add the most value?
Once all potential solutions have been identified, it’s time to determine strengths, weaknesses, opportunities and threats through a SWOT analysis. For instance, do current processes require too much effort on the part of hiring managers to develop the requisition? Would an outsourced solution alleviate many tactical activities? Click on the arrows to consider your options:
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internal investment
Organizations often assume that an in-house recruiting function delivers higher-touch service than outsourcing would, especially for higher-level talent. This may be true in some instances, but as volumes grow, many internal recruitment functions find themselves overwhelmed. This could result in increased agency usage, which may eliminate that in-house level of service and significantly raise the cost per hire.
Additionally, internal functions require a constant stream of investments in best practices, sourcing methodologies and technology to remain competitive. For example, understanding the use of AI, mobile technology, social media and data is key to identifying the right talent. Companies that fail to keep up with the changing methods of sourcing and engaging talent will find themselves unable to keep up with competitors.
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end-to-end RPO
Implementing an end-to-end RPO program can take months and require significant change management, but once operational, the return on investment comes quickly. There are many ways to demonstrate the business case for an end-to-end engagement, including cost savings, enhanced time to hire, hiring manager satisfaction and other metrics — all of which can be correlated to revenue and profit impact.
One of the most compelling reasons for an RPO is significant reduction in agency fees. For example, a global environmental technology client’s program, managed by Randstad Sourceright, produced $3 million in savings in the first year, spurred on by a significant reduction in agency spend of 17% globally. Across the world, its direct-sourced hires rose markedly, with non-agency hires in Europe well ahead of SLAs, and nearly 100% in Asia.
Access to talent is certainly another driver. Through increasingly sophisticated services, such as employer branding, talent marketing, talent intelligence and sourcing methodologies, RPOs are delivering high-quality talent quickly.
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project RPO
The business case for employing project RPO rests mainly on speed. Because it can be deployed almost immediately, this model provides the power of end-to-end RPO with the expediency of an ROD solution. It offers highly efficient processes, dedicated recruiters and a full suite of technological tools. Furthermore, because it has a finite end goal, buyers are not locked into a long-term commitment.
However, project RPO doesn’t address the structural issues many employers have with their recruitment functions. This solution should be viewed as a supplement to internal resources when a business initiative requires an increase in recruiting capabilities. Also, the value it delivers is applicable only to the roles contracted.
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talent BPO or selective RPO
For certain roles, business units or locations, talent BPO can produce tremendous results. It offers high-impact resources, such as dedicated recruiters and scalable tools, compliant managed processes, and strategic reporting and analysis. A selective RPO is typically contracted on an ongoing basis, so it can have a greater transformative effect on an organization’s recruitment function, even though it’s limited to the selected workforce or recruitment task component. For employers who struggle with challenges in a particular area of their recruitment, this may be the best choice.
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recruiter on demand (ROD)
An ROD solution is the most immediate way to bring recruitment resources into the organization. Trained resources are brought in to assist in managing short- or long-term recruitment needs. Highly scalable and flexible, the client determines exactly how much support they contract for and the length of service. Typically, commitments are brief, and disruption to existing processes is nearly nonexistent.
There are two main challenges with such a model, however: governance and account management. An ROD model doesn’t contain any governance in terms of escalations and management of under-performing, on-site consultants; clients are responsible for day-to-day management of resources. Also, KPIs, process optimization and management, reporting and analytics, a dedicated team to manage fluctuations of volumes, stakeholder engagement, supplier management, and training and onboarding of consultants are typically not part of an ROD. It is a “no frills” approach to recruitment and should be considered only if an experienced talent acquisition function with solid recruitment processes already exists in the organization.
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total talent acquisition
A total talent acquisition, or integrated talent, solution offers the most potential value over the long term. Buyers often operate in a siloed approach when managing permanent and contingent labor, with HR responsible for the former and procurement responsible for the latter. An integrated approach requires the cooperation of both parties, and brings operations and governance of all talent processes under a single strategy. The results include greater business agility, improved visibility into talent needs, better access to the full supply, and improved quality and speed in achieving results.
To create the business case for an integrated solution, an employer will need to bring all parties together and help them understand the value this approach offers and whether it is worth the potential complexities.
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getting external expertise
A common myth about outsourcing is that it leads to replacement of internal resources. This is only one arrangement, but in many RPO engagements, the employer is simply leveraging the provider’s expertise and delivery capabilities to augment its existing resources. Whether it’s to address a project, business spike, product launch or particular skill set, RPOs provide a range of customized solutions that enable employers to preserve their recruitment teams while acquiring the scalable help they need when they need it.
selecting your provider
Once the decision to outsource has been made and the right model for your business has been selected, you face the perplexing question, “Which partner is the best choice to meet my needs?” While pricing plays a big part in the decision-making, it is by no means the only consideration.
It’s important to also consider providers with a complementary culture that have the appropriate infrastructure and footprint, and can deliver a customized solution. These elements are all present in successful programs.
Also critical is the RPO provider’s ability to grow with the organization, as programs often span many years and lead to scope expansion in geography, business units and roles filled. Begin with a deep examination of the provider’s capabilities and demonstrated track record. Some key factors to consider include:
- Does the RPO provider fully understand your business?
- Is the provider familiar with your specific industry?
- Can the provider offer a robust and referenceable portfolio of clients?
- Does the provider offer access to the best people, practices and technologies for the job?
- Can the RPO support your global talent strategy or growth into new markets, offering global governance combined with local support and market knowledge?
- Does the RPO possess a deep understanding of regulatory requirements in the relevant markets?
- Does the RPO provider have the financial backing to continually invest in technology, people and processes to enhance recruitment outcomes?
Addressing these questions at the start will avoid painful discoveries after a program has gone live. Vetting a provider is no easy task, but ensuring organizations are aligned from the beginning will help avoid larger problems later.
technology considerations
World-class RPO providers will always have in-depth knowledge and experience with any of the major ATS platforms, recruitment CRMs, talent marketplaces, AI integrations and other technologies. First-time RPO implementations may also be accompanied by a new ATS investment, so the RPO should have a deep understanding of all the major platforms on the market, as well as demonstrated experience in technology and program integration and implementation.
A strong RPO partner will also understand where AI can make the greatest impact on your recruitment processes and outcomes. They will have experience implementing these innovations — from sourcing and matching innovations to chatbots to agentic assistants and more. This becomes increasingly critical as employers continue considering the wide applications possible and where they can benefit most from AI collaboration.
5 questions: which RPO model is right for you?
- Do you need a long-term solution that will help you transform your talent acquisition model, or are you seeking urgent recruitment support?
- What are your priorities for outsourcing recruitment — cost savings, faster time to fill, greater talent access or enhancing quality of talent?
- Are you comfortable with an external partner performing all tasks around talent acquisition, or are you only seeking help with certain functions?
- Do you have a competent technology strategy, or do you need tools that can transform your talent acquisition function?
- Are you also seeking expertise on how to integrate and optimize your contingent workforce management strategy?
3 tips: drive business impact through recruitment
- Identify the skills that your organization needs today and tomorrow and map how you will acquire them through recruitment, internal mobility or reskilling.
- Collaborate with business leaders to redefine work. Doing this asks them to think about alternative, more cost-effective and impactful resources that can deliver better results.
- Focus internal resources on core competencies to achieve better outcomes. Consider involving external partners that can deliver on services outside of those competencies.