alluru madhuri(07 xqcm6001

A Research Project Report

On

RECRUITMENT PROCESS OUTSOURCING

Submitted in partial fulfillment for the requirement of the

MBA Degree awarded by Bangalore University

Submitted by

Madhuri.A 07XQCM6001

Under the guidance of

HEMAHARSHA Professor

M.P.Birla Institute of Management

M.P.Birla Institute of Management Racecourse road

Bangalore-1 INDIA

M.P.Birla Institute of Management 1

DECLARATION

I hereby declare that, this Dissertation entitled “Recruitment process

outsourcing” of project work undertaken by me under the guidance and

supervision of Prof. HemaHarsha, MPBIM, Bangalore, in partial fulfillment

of the requirements for the award of Degree of Master of Business

Administration.

I further declare that this dissertation has not been submitted to any

University/Institute for the award of any degree/diploma or any other similar

title.

Place: Bangalore Madhuri.A Date:


GUIDE’S CERTIFICATE

I hereby certify that the research work embodied in the dissertation entitled

“Recruitment Process Outsourcing” has been undertaken and completed by

Madhuri.A. under my guidance and supervision.

I also certify that she has fulfilled all the requirements under the covenant

governing the submission of dissertation to the Bangalore University for the

award of MBA degree.

Place: Bangalore Prof. HemaHarsha


PRINCIPAL’S CERTIFICATE

I hereby certify that this dissertation is an offshoot of the research work

undertaken and completed by Madhuri.A under the guidance of Professor

HemaHarsha, M.P.B.I.M. Bangalore.

.

Place: Bangalore (Dr. N. S. Malavalli) Date: Principal


Acknowledgement The satisfaction that accompanies the successful completion of any

task would be incomplete without the mention of the people who

made it possible, whose constant guidance and encouragement

made my efforts a success.

My profound thanks to my project guide HEMAHARSHA, Professor,

M.P.Birla Institute of Management, Associate Bharatiya Vidya

Bhavan for helping me throughout the project. I take this opportunity

to thank her for her immense support, guidance, specifications and

ideas without which the project would not have been a success.

I wish to thank our Principal Dr. N. S. Malavalli for his

encouragement and support.

Madhuri.A


CHAPTER TITLE PAGE NO.

Executive summary 07

1. • Introduction

• Best practice Tips

• A Look in RPO

15

2. • Review of literature

• Purpose of the review of literature

• Methodology of the review of literature

• Summary of Review of Literature

58

3. • Problem Statement • Research Objectives

68

4. • Research methodology

69

5. • Limitations of the research

71

6. Data Analysis & Interpretation 72

7. Summary of Research Findings 91

8. • Recommendations • Suggestions & Conclusion

92

9. Annexure 97

10. Bibliography 97

11. Questionnaire 98


Executive Summary

As the organizations mature, HR practices also mature. The HR function is at three

different states in its evolution cycle where it starts as a Business Function, becomes a

Business Partner and then a Strategic Partner. The following figure shows the migration.

In each of these cases the role and impact of the HR department becomes progressively

more strategic in nature. At higher levels of maturity, the HR function can add

tremendous value to the leadership potential, top-line, bottom line and long-term

sustainability of the organization.

At each stage the attributes & value add by the Human Resources function change and

the tools required vary significantly.


HR as a Business Function

At the very least, when an HR function is available in an organization, it is

responsible for managing employee data, takes care of payroll, time and attendance

and the setting of company policies.

The role is largely that of Personnel Administration focused on Compliance both

internal & external, and on Management of employee records.

The tools that the HR requires are related to management of employee data and

include a rudimentary HRIS, Payroll processing software, Time and Attendance

systems (could include time-card readers, swipe systems and associated devices). I

have found that in many cases organizations even use spreadsheets and shared

directories to manage their employee data, policy documents and employee leave

applications, contracts etc. In most cases, paper based employee files are the only

source of employee data which are managed by the Personnel Administration

department of the organization.

HR as a Business Partner

As a Business Partner, the role of HR is to meet the “existing business needs” of the

organization so that the organization could grow at a measurable rate.

At this stage of evolution, the focus of the HR shifts to competency based

Recruitment, Total Compensation, Employee Development, Communication and

Organization Design.

The HR function helps in formalizing the organization structure (who does what and

reports to whom). Once that is complete, the next role is that of identifying the skills

necessary for different job roles. HR further helps in defining appropriate training

programs that are necessary for developing these skills, recruitment techniques to

evaluate the skill levels and benchmarking the skill database against industry

standards and competitors.

Total compensation (payroll and benefits) also becomes a focus area where the HR

helps the organization attract and retain skilled employees by becoming a leader in


compensation management.

Using the skill database and the organization structure, the HR function iteratively

evolves compensation practices, improves the training function and makes the

recruitment function more attuned to the skills needed by the organization.

To facilitate the above functionality, HR uses tools such as Applicant Tracking softwares

for recruitment, Employee Portals for communication, Self Services for employees

empowerment, Learning Management Systems for training & development and an

Employee Database for capturing employee skills & competency profiles. Organizations

even have well defined Job Descriptions with details of qualifications, experience, special

skills required for the job and job roles & deliverables for each job position.

We have found that at this stage most organizations prefer some degree of automation

and are using tools either built internally or procured from vendors. Another

characteristic of organizations at this level of maturity is the break-up of the HR function

into sub-functions such as Training , Personnel Administration, Recruitment and

Compensation & Benefits, each being partly dependent on the other.

HR as a Strategic Partner

Organizations that view their HR as a strategic business partner believe in full maturity of

their HR function. Such organizations are focused on attaining leadership positions rather

than an year-on-year growth. Bottom-line and top-line growth are expected to be

achieved automatically.

At this level, HR becomes responsible for identifying core competencies necessary for

their organization to attain leadership position. Further HR facilitates in

• Aligning employees to a common sets of objectives derived from the mission and

value statements,

• Mitigation of risk by devising appropriate Succession Planning Strategies,

• Identification of top-performers and non-performers,


• Continuous measurement of the effectiveness of leadership and employee

satisfaction,

• Increasing employee engagement through appropriate measures,

• Aligning compensation to performance,

• Adjustment of recruitment and training to competency gaps,

• and specifying well-defined Job Descriptions which map to the organization

structure . These become the basis of Recruitment, Goal Setting, Training,

Performance Evaluation and Career Development.

As a strategic partner HR uses a variety of automation tools for Learning Management,

Performance Management, Compensation Planning, Recruitment and On-boarding,

Succession Planning, Alignment and Employee feedback.

The largest benefits accrue when employees are encouraged to use these tools as a routine

practice at their work place. An integrated view of employee’s life cycle in the

organization is visible through appropriate dashboards which are available to the decision

makers at all levels in the organization.

HUMAN CAPITAL IS EVERY ORGANIZATION’S essential DNA. And the root of all

such DNA is the enterprise’s hiring process, which needs to be nourished rather than

stifled. Why, then, do many organizations delegate the hiring process to an overburdened

and/or understaffed Human Resources Department and to hiring managers who have only

enough time to be concerned with their own immediate needs? When that happens, active

and passive job candidates are treated more like non-entities, or even intruders, than the

customers that they, in fact, are. Inevitably, the enterprise suffers serious leaks throughout

its organizational ship. These losses have both tangible and intangible value that can be

measured in the form of employee attrition, lost productivity, lost opportunity, stunted

growth, possible litigation, and excessive third party costs. Eventually, the inability to

obtain and retain top quality talent threatens the very survival of the enterprise. This

reality became quite evident in the late 1990s, when a War for Talent was fought. This

“war” was the result of a demographic imbalance in which industry was creating too

many jobs for the number of qualified people available in the workforce. Industry


responded to this imbalance in very positive ways by making talent acquisition and the

hiring process performance a priority, and provided the functions with an appropriate

budget to get the job done. This era came to an end in the form of a steep recession that

began in 2001, when management’s primary focus turned to cost cutting. As a result, a

movement stressing layoffs and budget cuts replaced the focus on talent acquisition. But

the War for Talent did not end. The enterprise merely experienced a temporary cease-fire.

Now, however, hostilities are breaking out again, and most companies do not possess the

forces, expertise, positioning, tools, technologies and/or budgets to properly launch an

effective and timely offensive attack.

Recent surveys of Chief Executive Officers confirm the highest level of concern around

recruiting and retaining talent since the year 2000. They also show that CEOs are

embracing the concept of outsourcing. Taking these facts into consideration is what

interested me to do a project in RECRUITMENT PROCESS OUTSOURCING (RPO).

The study concludes that the companies prefer outsourcing their HR duties to the RPO

which they select depending on certain criteria. And the main reason for selecting RPO

would be to improve the service quality and to have an effective time management

system implemented in the company.

Ten Trends shaping the fast growing RPO market today.

1. The value proposition is expanding. Buyers expect service providers to deliver a robust

value proposition that goes well beyond economic/cost savings benefits. Service

providers are developing solutions that also achieve strategic, operational, technology,

human resources, and risk management benefits.

2. RPO providers are extending the value chain to deliver a robust value proposition and

significantly increase the ROI for buyers. The firms now shaping the RPO market

recognize that you need to win the war for talent on two fronts – acquisition and

retention. This new breed of service provider is moving towards a true “end to end”


definition of talent acquisition: from outsourcing simple recruiting, to the talent

acquisition and management value chain. It starts at the opening of the requisition and

extends through initial on boarding, orientation, and training. This end-to-end process is

designed to deliver maximum value, making a huge difference in lowering costs and

improving business performance.

3. The pricing equation is changing. Sophisticated buyers are moving away from per hire

fees. They have become smart enough NOT to look just for labor arbitrage or cost

savings driven by outsourcing alone. They are moving towards a BPO pricing model with

performance guarantees and performance pricing. They recognize that business

transformation and performance improvements result in competitive advantage and

enduring value.

4. It’s all about the process in this changing market. Buyers are looking for new

methodologies. Buyers are increasingly looking to RPO firms that can bring world-class

processes and change management tools to their organization. The RPO market is being

redefined and extended for the first time with R2R; a well defined structured process that

goes through the value chain from regulation to results covering 1100 steps. The RPO’s

that understand “business” – marketing, branding, process, supply chain, metrics, etc –

will be the ones that thrive.

5. The supply chain is growing in importance. In a world where competitive advantage

doesn’t last long, knowledge and innovation – the purview of our people – make the

difference. Almost no one today is thinking of labor based supply chains…the models


simply do not exist. RPO providers with supply chain management expertise will be the

big winners here as they help organizations plan and deploy their total workforce.

6. Offshore is adding value to RPO. RPO contracts will begin to contain an offshore

component, taking advantage of the time difference and labor arbitrage. RPO’s need to

have refined standardized processes, extraordinary training, quality control mechanisms

and global management and technology capabilities to support client’s global needs and

extended value chains.

7. Corporate culture match is driving solutions. Cost is not the only measurement,

corporate culture match will become a legitimate buying point in outsourcing contracts.

Buyers are looking for true partners. They want outsourcers to act as part of their

organization; understand their culture and develop service level agreements that are

balanced in a way that holds buyers and providers accountable for the robustness of the

partnership and the results. Those relationships with the best culture match will have the

best channels of communication, and those with the best communication will be the best

performing.

8. Solutions must include risk reduction. RPO providers must be true experts at process

excellence and internal controls to help their clients manage and reduce risk today. With

intense industry scrutiny, an unforgiving regulatory environment, Some companies and

individuals worry they will “lose control” if they outsource. However, in a properly

conceived and executed outsourced environment, they will have clearer processes and

better performance metrics than they have ever had.

9. CRM is driving talent acquisition. With CRM (customer relationship management)

systems allowing one-to-one customer interactions, expect these innovations to translate


to “talent” or “candidate” relationship management. Candidates will not “come running

to you” anymore; their resumes will no longer remain static in your database. You will

have to go to them. RPO’s that are “eBusiness” experts will master the most sophisticated

“B to C” technology to win the war for talent. These RPO’s will have significant

competency in branding and consumer marketing and provide effective results that will

help their clients win in the marketplace for talent.

10. The RPO buyer is shifting to the HR Leader who is seeking industry specific

solutions. Involving RPO is central to winning the war for talent. The evaluation and

selection process is so important that the HR Leader has become a key decision maker

and is frequently seeking RPO service providers who have the deep industry domain

expertise to support firm wide transformation initiatives.


INTRODUCTION

Before we try to know the meaning of recruitment process outsourcing, let’s understand

how this recruitment process works.

The Recruitment Process

Everything you need to know about finding the right people.

In the earliest stages of an intervention, recruitment decisions often get made on the basis

of who is standing in the right place at the right time with the right look on his/her face.

As the situation matures, we have to think more carefully about picking the right people

for longer-term roles including middle and senior management. The integrity of the

recruitment and selection process helps to ensure sustainability by building a strong and

balanced team, demonstrating the organization’s neutrality, promoting its good name and

serving as an example for partners. You may find that one of the first roles you need to

fulfill is a HR administrator to help achieve these goals.

Defining the requirement

Requirement is the opening or the vacancy existing in an organization. This need to be

filled in. Organizations may adapt different kinds of recruitment processes depending

upon the requirement. If the requirement is for a position which involves a short term

duration or of certain period, then the company can go for contract based employees

which reduce the cost for the company. Or if the requirement is for any kind of work or

process which involves a regular and same process then the company can think of finding

a substitute which could be of better advantage than having a human being for the

position.


Deciding the existing vacancy .To fill a new role quickly the following would be helpful

to adapt one of the models here:

Task analysis: draw up a detailed list of tasks that the person will have to do. This helps

in determining the qualities and qualifications genuinely required for the job.

Job description: produce an outline of the broad responsibilities (rather than detailed

tasks) involved in the job.

Person specification: decide what skills, experience, qualifications and attributes

someone will need to do the job as defined in the task analysis and job description.

Attracting applications

Your file of previous applicants can be a good place to start.

Advertising: Phrase your announcement in a way that makes clear what the job involves

and the type of person you need. Avoid any stipulations, which could be seen as

discriminatory e.g. applying an age restriction, which is not necessary. You can display a

notice internally and/or at your gate, in the local newspaper or with a message on the

local radio station.

.

Application Form: A well-designed form can elicit information about the person's

ability and willingness to do the job. Do not ask for irrelevant information. Make it clear

on the form that applicants should consider the points in the job description and person

description when applying. Allow enough space on the form for applicants' answers, and

indicate whether continuation sheets can be used. State clearly on the form the closing

date for applications. For senior positions a supporting letter or CV may also be required;

if this is the case indicate the kind of information sought.


Background information: provide applicants with clear, up-to-date and accurate

information about the organization, its work, its priorities and the job. Clearly indicate the

closing date for applications and the short listing and interview dates.

Selection

Select your candidate. Be objective and unbiased. Choose the person who best fits your

person specification.

Short listing: Assess applications on the basis of the person specification (standard forms

can be very helpful at this stage). Guard against bias and discrimination - ensure that you

select for interview those who match the specifications, regardless of age, sex, race etc,

and that the specifications are not themselves discriminatory.

Interviews: Interview your short-listed candidates. Remember that your job is not only to

assess the best candidate for the job, but also to create a great impression of your

organization. Follow the WASP format as an interview structure:

1. Welcome the candidate and make him/her feel at ease.

2. Acquire information about the candidate. Do these before you tell him/her

about the job - you're less likely to get what he/she thinks you want to hear this

way!

3. Supply information about the organization and the job.

4. Part, having agreed what steps are to be followed next.

The amount and quality of the information that you establish will be largely due to


the effectiveness of your questions. Use open questions (e.g. tell me about...how

you...why did you...talk me through...do) and probe from the general to the specific.

Avoid any questions which could be considered discriminatory e.g. asking only female

candidates who look after their young children. If you think such a question is relevant -

ask it of all candidates who have children.

Candidate assessments: The interview will provide you with some information but

check it out before offering a job. Ways in which you could do this include:

1. Ask the candidate to show you examples of previous work, do a presentation, a

case study, some tests or a full assessment. Tests can be done before the interview

(either at home, or immediately beforehand) or after the interview.

2. Some agencies, faced with large numbers of candidates with dubious

qualifications and no prior experience, have run large-scale tests as part of the

short listing process. Inviting 100 candidates to sit a short exam is one way to

publicly demonstrate equal treatment and selection for interview on the basis of

merit alone.

3. Taking up references. You must have the specific permission of the applicant to

do so, particularly if you wish to contact their current employer. If you need them

quickly, try phoning.

4. Get others to see your preferred candidate/s. This could be done informally e.g.

someone could show them around, or talk to them about their job, or more

formally at another interview.


Making a Job Offer

For your successful candidate:

1. Prepare and send the appropriate documentation;

2. Make up the employee's personnel file; and

3. Arrange the induction plan.

Induction

Help your new recruit to settle in quickly and become productive as soon as possible.

Legal Considerations

All documentation should be in an official language of the country in which you are

operating. It is important to consult a local lawyer to ensure that your contracts are

compliant with all applicable laws. Some international NGOs are also introducing

policies to ensure that national staff conditions of employment closely match standards in

the country where the NGO headquarters is based.

Best Practice Tips

If any employee quits from a company the next step of the organization to think about the

replacement of the position. But the best option could be to restructure, redistribute or

automate tasks instead of replacing the position. Should consider giving opportunities to

the current team members of the organization for the vacancy. The existing team may just

require training, but this could be a better option all round than bringing in someone new

to do the job.


The applicants should be given with a balanced and accurate picture. Should point out the

terrific things about the job and its less attractive features. Creating a realistic expectation

will help organizations to retain their employees.

At interview, candidate should be made comfortable and relaxed then the candidate at

ease will tell the interviewer more. Should make notes during or immediately after an

interview - to help and ensure that the decision is unbiased. “Halo” effect should be

avoided - creating an impression by the look of the candidate and find reasons why they

are suitable - or the 'horns' effect, which is the opposite. It can help to compare and

contrast candidates when asked with a lot of the same questions at interview.Consider

paying travel expenses. Ask some practical questions towards the end of the 'Acquire'

stage of the interview:

Some methods of recruitment are:

Internal Recruitment: existing employees and volunteers are given an opportunity to

apply for a new job opening

Considerations:

• Rewards the employee/volunteer for past performance

• Gives the employee/volunteer an opportunity for career development

• Retains the organization's investment in the employee/volunteer

• Reduces the amount of time necessary to orient the person to the new position

• Reduces the costs of recruitment

• Provides a limited number of people to select from

• Reduces the opportunity for increasing diversity within your organization

Employee Referrals: Employees are asked to recommend a person for the job opening


Considerations:

• The quality of employee referrals is usually high. Employees usually only refer

people that they are confident would be a good match for the position and

organization.

• People tend to recommend others with similar backgrounds. Therefore it is

important to ensure that the practice of employee referrals does not lead to a

decrease in diversity within your organization.

• People recruited by your staff usually have some understanding of the work of

the organization.

• There can be a tendency to feel that you must hire someone who is referred by

an employee even if your assessment is that the person is not the best match.

Print Advertisements: the job is posted in a newspaper or professional journal

Considerations:

• You can reach a large audience in a specific area

• The content of the advertisement will impact on the number of applicants; if the

ad is general you will most likely receive more applications.

• If the ad is general, you may receive a significant number of applications from

unqualified candidates.


Internet Recruiting: the job is posted on an Internet job site such as charityvillage.com

or workopolis.com.

Considerations:

• Internet recruiting is cost effective

• One study has shown that 96% of people looking for jobs use the internet

• Internet job postings as available to potential candidates 24 hours a day

• You can minimize the number of unqualified candidates by directing people to

more information on your organization's website

• The number of applications may be overwhelming

Internships/Field Placements: students who come to your organization as part of their

education are recruited after graduation

Considerations:

• You will have a good understanding of the fit between the person and the

organization, as well as their abilities

• The former student will have good knowledge of your organization and require

less time to become productive

• Often first jobs are seen as stepping stone and people move on to new challenges

after a relatively short period of time


Executive Search Firms: A private company that specialized in recruitment is hired to

find suitable candidates.

Considerations:

• This is a very expensive method of recruitment

• Hiring professional recruiter does not guarantee a positive result

• The firm will do most of the preparation for the posting and the preliminary

screening

• May be an appropriate recruitment method for the most senior positions.

Unsolicited Resumes: individual’s interest in working for your organization send in

resumes

Considerations:

• The percentage of resumes with skills appropriate for your organization may be

small.

• How you treat unsolicited resumes may have an impact on the image of your

organization. It is best to respond with courteous and frank information about

whether or not the application will be kept for future reference.


Initiate the Recruitment Process

Your job announcement should include:

• A brief description of your organization, its mission or purpose

• The title and a description of the position

• Duties and responsibilities

• Qualifications

• The supervising authority

• Mention the salary and benefits attached to the position. Specify the starting

salary or salary range, or say the salary depends on experience.

• The application deadline

• Start date

• Request for references

• Indicate the format in which you would like to receive the information

Give a contact name and address

A look into RPO

Defining an RPO:

RPO is the complete ‘process’ outsourcing of recruitment. The RPO vendor is

accountable for transforming the client’s processes and is responsible for all areas —

tactical and strategic.

High attrition rates may be a blot on the great Indian BPO success story, but this problem

has helped spin off a niche industry Recruitment Process Outsourcing RPO which is

expected to grow by a billion dollar this fiscal to about US Dollar3.5 billion. The industry

is set for rapid growth with a large number of companies in India and from abroad

seeking to outsource their hiring related jobs to third party vendors here in order to save


costs as well as time India has been a hub of global outsourcing activities and RPO is the

sunrise segment in this sector, hiring industry umbrella body Executive Recruiters

Associations Executive Director B R Muralidharan said. In India, RPO is already a US

Dollar 2.5 billion market and is expected to grow at a rate of 30 to 40 per cent during this

financial year, he said.

This new buzzword is already enjoying taste of success with a number of corporate giants

adopting the RPO model for their hiring needs inside and outside India. The hiring needs

of British mobile major Vodafone is taken care of by RPO provider Alexander Mann

Solutions, which also handled accounts of clients like Credit Suisse, HP, Prudential and

Cap Gemini.

Closer home in India, the BPO arm of the country’s third largest IT firm Wipro has

outsourced its recruitment process to MeritTrac and aims to reduce its hiring costs by 15

to 20 per cent by this move. “Right hiring is the first and most important step toward

reducing attrition, with our objective being for a handsfree recruiting process”, Wipro

BPO CEO T K Kurien said.

Kanika Vaswani, Associate Partner at citybased RPO service provider Elixir Web

Solutions said, RPOs have been accepted in the mature markets. This allows an HR

manager to focus on other core functions. Elixir started its RPO business about six years

back, catering mostly to the IT clients. However, the market has expanded considerably

and now its clients come from across the sectors, Ms Vaswani said.

We are now hiring in hundreds for many Fortune 1000 companies across sectors and 80

per cent of all the hirings we are doing are for US based companies and the remaining 20

per cent are for companies from Europe, Australia and Canada, she added.

Another Indian RPO service provider Blue Square Consultancy Services CEO Madhu

Khanna said “India has managed to get leverage in the business with its rich outsourcing

experience. The future of RPO sector is bright with a chunk of the US workforce retiring

in the next 5 to 10 years.”


Hiring process

At present, the US based recruiting and staffing agencies outsource their backend

operations to India on a revenue sharing basis and will continue to do so, but the

difference would be seen with a large number of vacancies coming on board.

Besides saving costs and reducing cycle time, RPOs also help companies improve quality

of hiring, industry players believe. While companies had reservations initially about

outsourcing their recruitment process, rising attrition rates and expanding sphere of

overall HR functions have made them accept and welcome borrowed hands to handle the

hiring process.

All that a firm seeking to outsource its hiring functions needs to do is to provide an RPO

with the details of job openings and the salary range in the offering.

From here the RPO takes over, advertising for the position, screening resumes, short

listing candidates and finally going to the employers with the right professionals. The

openings can range from a fresher to a very senior employee of a company.

Outsourcing service providers are now increasing in number to become niche firms

focused on HR outsourcing business. Recruitment process outsourcing has also come as a

new lease of life for smaller companies with a workforce of around 100 to 150 people,

who may not have a HR department.

How an RPO vendor is different from other recruitment partners (non-RPO vendor

model)?

The difference is actually that between the sky and earth. A recruitment partner is usually

one of many resume sourcers (contingency hiring organisations) and in some cases may

also supply contract recruiters to the client. The recruitment partner usually works in

conjunction with the client’s existing recruitment teams and other sourcing vendors. Most

often, the planning, processing and almost all the strategic areas of recruitment are


retained by the client-side recruiter team. In this model, accountability is not passed on

fully to the recruitment partner and the commercial model followed will at best be a fixed

retainer fee that may or may not have a variable bonus component.

RPO is the complete ‘process’ outsourcing of recruitment. This means that the RPO

vendor holds complete accountability for transforming the client’s processes and is

ultimately responsible for all areas — tactical and strategic. The commercial model is a

full-risk switchover to outcomes/value-based pricing, a clear departure from the

traditional no-risk retainer fee model.

Measuring the effectiveness of the RPO vendor

As defined ,RPO would be relevant to an organisation only if it links its payments to

value created and/or outcomes achieved. The challenge was to quantify the

value/outcomes in detail so both parties were satisfied that they were getting a fair deal.

At MindTree, it was relatively easy to get here as we had begun measuring the

recruitment effectiveness internally before we implemented the RPO model. We have

identified eight critical-to-quality (CTQ) items that we will monitor in the RPO

engagement, namely, the fulfillment index, source mix, no-shows, offer to joining

conversion rate, turnaround time, screening to interview selects, cost per hire and effort

per hire.

RPO helps in reducing the cost per hire, effort per hire and the overall candidate-job fit

Since the RPO vendor takes responsibility for the entire recruitment team and its

activities, the recruitment team’s direct (salary) costs are first transferred to them. Apart

from this, there are at least six different cost items such as sign-on bonus, employee

referral payouts, walk-in events, travel and logistics costs, etc, that are transferred to the

RPO vendor.

Besides the cost-transfers, the RPO team structure ensures optimal usage of resources and

there are incentives to increase productivity and minimize effort-loss. Since the RPO is


accountable for the entire process, there is an incentive to continually innovate and

realize process improvements rather than being content playing the paper-pushers.

The RPO vendor handles all hiring requisitions and passes them on to a preferred

sourcing vendor. This ensures that there is a deep discount on the industry average of

8.33 per cent consultant payout on each joinee, ensuring that the cost per hire is

significantly lower than before.

Candidate-job fit which is the ultimate deliverable is the most difficult to achieve as

requisitions from our internal customers are not as clear and unambiguous as we want

them to be.

RPO - JIT (just-in-time) hiring system

RPO enables JIT hiring. The average processing time from receiving a resume to rolling

out an offer is 5.6 days. This period includes tasks such as screening, arranging the

interview logistics, taking the candidate through three levels of interviews and rolling out

the offer letter. So, technically, clients have their candidate ready to join us in a week’s

time. But the JIT does not work this way as the candidates have to serve their notice

periods with their previous employers; this is usually 45-60 days.

Drawbacks/risks associated with the RPO model

While there are many upsides to RPO, like everything else, it also has its share of risks.

Some indicative risks are: If the RPO vendor is a wrong choice it translates into a serious

single point of failure; the RPO vendor in theory should have high process awareness and

maturity to enter the corporate as a change agent. As it stands, there is a lack of this key

ability. Like in the IT offshoring business, many first-time outsourcing organisations

think that they don’t need to stay engaged once the process is outsourced. The client must

watch for complacency, especially when the RPO vendor gets into the annuity business

frame-of-mind. Then, getting profiles of passive job-seekers is an issue. Besides, there’s


the issue of inadequate training: Since the team is predominantly on-site, RPO vendors

might not invest in their team’s training.

Expanded Services

Undoubtedly, customization will be the key to a successful RPO relationship.

Considering each client’s needs, core competencies, infrastructure, and IT platform, the

provider must tailor its services even as it standardizes practices and processes.

In addition to expanded offerings, buyers also want flexibility such as being able to buy

services as a package or a la carte. Some vendors report that a growing number of clients

want the flexibility to change their RPO deals if their market has changed. For instance,

having an international reach is especially important to buyers today.

Ladd Richland, the CEO of Torrance, CA-based CRI, said overseas hires are on the rise

because many corporations are shifting production to lower-cost locations, forcing them

to seek recruitment help in markets such as China, India, and elsewhere in Asia. “Right

now we’re seeing a large trend toward international help,” he pointed out, adding that

demand has spilled over from technical positions to non-technical jobs such as data entry,

copy writing, and research.

With demand for international hires on the rise, the RPO market is evolving to meet

shifting needs. Sourcing has emerged as the most important function for overseas markets

because clients simply lack the network that some outsourcers have built.

“Most RPOs today have to have the ability to globally source,” said Ranjan Sinha,

chairman of Summit HR Worldwide, an international RPO based in San Jose, CA with

offices in India. “More and more companies are looking at recruiting across a global

footprint.”

Sinha noted that global RPOs have become particularly attractive to buyers who need to

fill positions in numerous markets. Because most international companies have staffing


needs distributed across a number of countries, they require the provider to source and

recruit in just about every corner of the globe.

Of course this can be particularly thorny because these needs are never uniform from

market to market; instead, the provider must be capable of recruiting, for example, 200

positions in the U.S., 20 in France, and two in Poland. This is the exact reason why many

buyers are turning to external providers instead of tackling the problem on their own.

As more HR professionals consider the outsourcing question, they will undoubtedly have

to make a case for or against it. There are many benefits to be gained, but at the same

time, numerous pitfalls exist if they fail to clearly think through about which functions

are needed internally and which are best left to third parties. There will always be “sacred

cow” senior positions filled only by internal hiring managers, but recruiting for the

highest-volume jobs can be made more efficiently through an outsourcer—freeing up

more resources in HR for strategic functions.

So by shifting non-core recruitment functions to those who can leverage better processes

in a wider-reaching network manned by seasoned recruiters, the HR department may

indeed achieve its strategy goal. And along the way, it may also save a wad of cash at the

same time.

1. Build a Solid Case for Change.

Adopting RPO in any organization is not a small task, should convince the senior

management of the value of outsourcing. To build a case for it, know the costs and cycle

times are under the existing internal infrastructure in the company and compare this with

expected performance and costs when employing a third party. Many HR departments

usually either underestimate or have no good data of their internal performance so this


nee to be understood well which gives the scope of a third party requirement for the

company.

“It’s important to go through to gather some information, such as a survey of

constituency groups. It doesn’t have to take a long time or be a bureaucratic process,”

said Marks. “You should ask ‘where are we today, and where do we need to be in our

business plan?’”

By checking with all stakeholders, gathering data, and setting sights on goals, HR

professionals can make a compelling case of RPO.

In some cases, the support of the chief operating officer or the CEO may be needed to

ensure executive buy-in. Also, internal champions of outsourcing must take a long-term

view of the strategy.

2. Ensure a Culture Match.

Perhaps the most difficult to achieve, finding a provider with similar philosophies and

practices can help avoid many unpleasant conflicts later on. Without that match, the

parties have to resort to numerous rules to define their relationship.

Some indicators buyers should look for are if both sides agree on similar approaches for

achieving common goals, whether they share similar priorities, and if management from

both sides is on the same page on how best to implement the outsourcing strategy. Often

times, clarity of missions exists.

Flexibility also plays a role in culture match. “When the client needs change and the

requirements are not addressed, you need to make change for it,”

Also, RPOs should be technology “agnostic,” he pointed out. Being able to work with a

number of platforms brings flexibility to the process as well.

3. Build Strong Governance.

One of the biggest problems with HRO today is the disparity between client expectations

and provider delivery. RPO’S are important tools for ensuring satisfactory delivery of


services, but the parties must have strong governance mechanisms in place to oversee that

delivery.

Dedicated teams from both the buyer and the provider companies are needed to oversee

that the contract is carried out to the better. These teams can comprise of as few as four

members and as many as 15, said Terry Terhark, president of the The Right Thing, an

RPO provider. The larger the teams, he said, the less risk is involved.

Buyers need to recognize that good governance also provides flexibility in the on-

boarding period. A rigid approach that discounts the expertise of the provider could

curtail continuous improvement efforts,. “Buyers have to be open to the knowledge,

expertise, and experience of who they use as a provider,” adding that in the first 90 to 180

days, there will be challenges to the relationship. “When you hit rough spots, you are

going to listen more and work your way through.”

4. Establish Regular and Solid Communication Channels.

The analogy of outsourcing relationships are like marriages may be overused, but it still

has merit. The client and provider must remain in constant contact to keep both sides

apprised of changes in needs and capabilities, More importantly, ongoing dialog helps the

parties avoid an expectation gap.

“It is not unusual to set up an SLA [service-level agreement], and six months into it the

provider hits every metric, but the client may still not be happy,” “The way to avoid this

is by having very strong communication on both levels. It’s a marriage, and you have to

make it work.”

Ensuring robust communications between the two sides is especially important in the

early stages of the relationship, Clark added. “During the program design, you can’t over-

analyze, you can’t over-plan and you can’t over-communicate,”

5. Don’t Underestimate Change Management.

Once the negotiations are completed and the ink on contract has dried, the hard work

begins. Outsourcing can be culturally jolting to any organization, so it’s important for

buyers to take extra care in the change-management process. Don’t underestimate how


much hand-holding both sides will need. “I think it’s impossible to over-communicate

and impossible to over-estimate the attention needed to communications and change

management. Without that [attention], customers can tend to do things the old way,” said

Marks.

Part of that effort includes customizing RPO programs so employees will be more

accepting of the outsourcing program, said Steve Lindner, CEO of The Workplace

Group. “One of the things we think is really important is to have a change-management

strategy in place. Things are going to change. People need to adapt,” he said, pointing out

that the company evaluates the client’s structure knowledge and conducts skills

assessments as part of that process.

An effective change management strategy will also help bolster internal support for the

outsourcing deal. Educating employees about what to expect minimizes surprises and,

hopefully, discontent.

6. RPOs Come in Different Flavors.

Choose wisely. Outsourcing is certainly a way to save money and reduce cycle times, but

this is only possible when choosing the right partner. Unfortunately for buyers these days,

the RPO space is chock full of wannabes who might be good recruiters but lousy process

outsourcers. As a result, it can be difficult to separate the wheat from the chaff.

Also, some providers are very competent in their core competencies but miserable when

asked to move beyond their comfort zone. For instance, if the RPO provider can only

recruit in the U.S. or North America, it might not make much sense to engage it in filling

positions in South America or Europe.

Ranjan Sinha, chairman of Summit HR Worldwide, said a defining characteristic of an

RPO company is that it “takes a strategic plan and translates it into a meaningful plan for

governance. That’s what I see as the fundamental difference between an RPO approach

and a non-RPO approach. Without this, you have an unstructured group that does

recruiting.”

Often, true RPO providers have their employees working from the client’s site. “Our

hiring managers don’t even know they are [from] an RPO,” Tom Valerius, VP of


recruitment services at UnitedHealthcare, said of vendors based at his company’s

facilities.

7. Get Comfortable with Metrics.

How do you realize the true benefits of outsourcing? The only way HR departments can

reap them is to measure before and after results, and there are many metrics to consider.

What’s the time to fill for exempt and non-exempt positions? How many resumes must

be processed before a hiring manager is involved in the final interview? What is the cost

per hire? These might seem simple metrics to measure, but often the true costs are hidden

because not all components are identified. Moreover, the HR department may be so

short-handed that there just isn’t time to compile the data.

Even more challenging are soft metrics—indicators of not only how quickly or how

costly it is to hire, but also the quality of the employees. According to Jill Zoromski of

the Capital H Group, both the provider and buyer communities have failed to

comprehensively measure and analyze important metrics. “It’s easy to measure cost-per-

hire and time to fill. That can be really misleading,” she said. “

Framework of RPO

Agility, scalability and adding real value are critical for successful organizations in

today’s fiercely competitive environment. For thriving businesses, outsourcing has

become one of the essential ingredients in their strategy, allowing them to maximize their

return on investments, while setting the pace in their market sectors. ‘Recruitment

process outsourcing’ (RPO) has become an integral part of the outsourcing mix. But


having made the most of the innovations and cost cutting opportunities this offered,

companies need a fresh approach to meeting their future recruitment challenges.

‘Resource Transformation Outsourcing’ (RPO) offers companies the strategic vision to

create agile organizations with both regional and global scalability, and an effective RPO

solution will offer a clear and focused strategy, as well as maximising returns on labour

investments across the organization.

As the Western economies slow and organisations increasingly focus on their global

operations, the relationship between supplier and customer will need to be more intimate,

with closely coupled alliances operating as a basis for innovative commercial success.

This will be especially true in ensuring that organisations capture and retain the skills to

compete effectively in their global markets.

In terms of recruitment, RPO business partnerships will work like joint ventures, and be

truly strategic alliances. They will have to deliver dynamic resource management

solutions through highly integrated systems and processes, balance internal and external

resources for cost and skill optimization, and build co-dependant business relationships

for joint commercial ventures, sharing both the risks and rewards.

The evolution of Recruitment Process Outsourcing

The origins of RPO were in the ‘preferred supplier list’ (PSL) that companies created in

the 1970s. These required suppliers to provide margin reductions in return for a larger

slice of the organization’s business, and worked well in the economic context of the day.

For many HR departments the PSL was their first foray into outsourcing. However at the

time most recruitment companies were unable to cover multiple professional and non-

professional skills and geographic locations, so HR departments still had to maintain

large supplier databases and continue to recruit themselves.

Then the boom times of the 1980s and early 1990s saw a more flexible labour market and

deregulated business environment, which encouraged a mix of permanent and contract

employment. The use of relational databases and the Internet enabled recruitment


companies to expand the scope of skills they covered, and grow their services to other

regions within the UK.

Tactical outsourcing Organisations embraced outsourcing as a tactical tool to reduce costs and fix internal

service delivery problems. HR became one of the early outsourcing success stories,

particularly in payroll and pension processing, and was considered both innovative and

hugely effective at fulfilling its original function, whilst ensuring operating costs were

reduced.

Many companies consolidated their recruitment suppliers and developed managed service

contracts for permanent and contract staff. Generally these contracts tended to be vendor

neutral, whereby two suppliers - one each for permanent and contract - would manage

multiple other suppliers under a master contract with agreed service levels and margins.

However back then, the contracts were often transactional in nature, very commodity

orientated and re-negotiated annually. The relationships between client and supplier

tended to mirror the contract, with little value being added beyond the filtering and

supplying of candidate CVs.

Strategic outsourcing

The late 1990s threw a few shocks into labour markets worldwide, from which many

businesses never recovered. The IT downturn forced many companies and individuals

into bankruptcy and markets saw the emergence of the global labour movement with off

shoring of services to Asia, South America and Eastern Europe. To survive the economic

downturn organizational strategy became increasingly obsessed with cost-reduction.

Within lean service markets, companies found desperate suppliers prepared to offer

previously unheard of margins and prices in order to remain in business. Many


unfortunately did not sustain these margins and quickly closed down leaving clients and

contractors financially exposed, and at best, at a major competitive disadvantage.

Costs and the security of long-term strategic partnerships became paramount in this

difficult economic environment. It saw the influential expansion of the procurement

function within companies leading to larger and more complex service contracts. These

aimed to drive down costs through economies of scale, and offset or shared commercial

risks, and cut the number of suppliers an organization needed to manage.

Value added RPO

As a result, RPO agreements emerged focusing on a supplier’s cross-border management

and delivery capabilities, and value-added services such as consolidated reporting,

continuous improvement and transition management.

As the complexity of the deals increased so also did the level of capital investment

required to develop and provide services. Contracts were often for three years to enable

organizations to achieve the planned business benefits and for suppliers to recover their

investment. Although not as punitive as earlier ones, these contracts were still structured

on the premise of a client/vendor relationship offering little strategic value. The principal

of strategic RPO in a cost effective, long-term alliance or partnership was still some way

off.


Overview: A total RPO process with its four pillars

RTO – the next generation RPO In today’s highly competitive and price sensitive times the goals for RTO are clear. More

than ever before, the objective has to be to offer organizations the ability to stay

structurally agile to meet the uncertainties of the business environment, while continuing

to make cost savings. Most organizations have had to apply vicious cost cutting strategies

in order to stay in business and compete in an economy that is slowing down. Wringing

the next round of cost savings from their strategic approach to resourcing is the major

challenge for many organizations. Of course at the same time they have to ensure they

can remain responsive to market needs and flexible enough to cope with peaks and

troughs.


Significance and need of RPO

Recruitment Process Outsourcing (RPO) is a form of business process outsourcing

(BPO) when an employer out sources or transfers all or part of the staffing process to an

external service provider.

A true or total RPO solution involves the outsourcing of the entire recruiting function or

process to an external service provider. This provider serves to provide the necessary

skills, tools, technologies, and activities to serve as their client's virtual "recruiting

department".

History

While many temporary, contingency, and executive search firms have provided a form of

RPO for many decades, the concept of an employer outsourcing the entire recruiting

process wasn't truly realized until the mid-to-late 1990's when the dot-com boom resulted

in significant talent shortages. Many companies lacked the internal expertise and

resources to acquire the talent needed to remain competitive.

In addition, the generation arriving to the labor force in the 1990's began bringing a shift

in career pathing. Rapidly changing markets and industries now forced people to consider

shifting employers when beneficial to them as opposed to staying with the same company

over the course of their career. This combined with the arrival of Internet technologies

and job boards such as Monster.com, Career builder, and HotJobs resulted in greater

attrition and heightened competition for talent.

The concept of an employer outsourcing the management and ownership of part,

or all of their recruiting process, wasn't first realized during the late 1990s. However,

it is literally permeating through Corporate America like the smell of freshly baked

apple pie. It is claimed that the cause for RPO was a shortage of skilled labor

created by the late 90’s dotcom boom coupled with the Y2K crisis. RPO was

created to fill the gap.


from a larger staff of recruiters focusing on individual clients rather than jumping

from one assignment to the next; a continuous population of a customized databases of

candidate resumes, investment in peer to peer networks, associations and educational

affiliations, capital investments in sourcing tools, as well as high volume buying power of

hiring and selection tools.

While RPO was first coined as a term in the late 1990's, several companies now claim to

provide RPO services. HRO Today, a trade magazine specializing in human resources

outsourcing, credited Recruitment Enhancement Services (RES) as the inventor of

recruitment process outsourcing. More recently, in 2004, HRO Today credited RPO

provider Hyrian with "Bringing a new acronym (RPO) to the HRO dictionary" and

"Reinforcing that RPO is a rising trend".

Recruitment process Outsourcing Reasons and benefits sought:

RPO's promoters claim that the solution offers improvement in quality, cost, service and

speed.

RPO providers claim that leveraging economies of scale enables them to offer

recruitment processes at lower cost while economies of scope allow them to operate as

high-quality specialists. Those economies of scale and scope arise from a larger staff of

recruiters, databases of candidate resumes, and investment in recruitment tools and

networks.

RPO solutions are also claimed to change fixed investment costs into variable costs that

vary with fluctuation in recruitment activity. Companies may pay by transaction rather

than by staff member, thus avoiding under-utilization or forcing costly layoffs of

recruitment staff when activity is low.


Advantage RPO:

1. Top notch Talent Pool

Competition for the most talented individuals is increasing. Organizations need to secure

the best people quickly and efficiently to help them build competitive capability.

2. Cost reduction and removal of workload from the HR Administration

RPO providers take on the burden of operational recruitment activities, allowing

organizations to focus on core value-creating and strategic activities. By transforming

processes, utilizing best practice, and replacing a fixed cost base with a variable charging

structure, RPO can significantly reduce the cost of recruitment. In regular staffing, you

invest in salary, incentives, overheads, infrastructure cost and more. By outsourcing

recruiting functions to Recruiting Junction, all you need to pay is a fixed monthly retainer

fees (which is lesser than the salary of one in-house recruiter) along with a negligible

commission. You can reduce up to 50% of your cost by offshore outsourcing.

3. Better Productivity and Quality

There are many stakeholders in a recruitment process; through improving processes and

evaluating the right metrics and KPIs, RPO providers can provide highest quality

services. By outsourcing your recruitment process to Recruiting Junction you get

dedicated recruiters for each client, while in regular staffing, one recruiter handles many

clients. In regular staffing the focus is lost, as recruiters serve bigger clients better. Our

recruiter can provide undivided attention to your all your clients – big or small.


4.Reduce operational risks

Risks come in many forms, and the expert knowledge of an RPO specialist can help

organizations reduce the risks associated with an inability to scale their business

operationally to meet changing demand, and the risks of non-compliance to legislative

and regulatory change .

And the other four benefits which are considered from an RPO are:

Streamlining of the Recruitment Process,

Offering Best Practices recommendations,

Developing an Employment Brand, and

Using Recruitment Marketing

Potential Concerns with RPO Outsourcing of company recruitment processes may fail if not implemented

correctly and with the right mindset. An improperly implemented RPO could

reduce the effectiveness of recruitment. Additionally, the costs charged for

recruitment transactions may total more than the cost of the internal recruitment

staff, if the internal staff is now using agencies and tools that increase their

overhead. Additionally, an RPO solution may not work if the service provider has

inadequate recruitment processes or procedures to work with the client.

RPO may not resolve difficulties that organizations have hiring staff when they are

perceived negatively by potential employees. This instead requires improved

branding and an adjustment of image.

Organizations with efficient hiring processes that are viewed as employers-of choice

by potential staff may stand to gain negligible benefits from RPO.


Getting partnerships right

However, like in any other area of business, outsourcing the recruitment function is

unlikely to be a 'magic bullet', and indeed there are several pitfalls that can be

encountered along the way. And given the importance of recruitment to most businesses,

this is not an area that you want to get wrong.

The first issue is of course the quality of your RPO partner. Since this sector started

gaining traction in the late nineties, the industry has mushroomed, with more and more

vendors competing in the space. But this is still a relatively new industry, and obviously

not all vendors are created equal. Many observers are expecting to see the industry

continue, with merger and consolidation activity among vendors, with weaker vendors

falling by the way side.

This risk is compounded by the fact that RPO partnerships by their nature suit long-term

relationships. Ideally you want your recruitment partner to get to know your business

culture and style, in order to best match candidates to your needs. A poor organizational

fit between you and your vendor is likely to produce poor results, and chopping and

changing vendors is clearly not the path to enlightenment and better cost-per-hire ratios.


The process of an RPO includes the following aspects:

PEOPLE

• Implementation Team

• Relationship Management

• Recruiting Teams

• Sourcing Teams

• Project Management

• Administrative support

PROCESS

• Implementation and Launch Consulting

• Hiring Process Design or Reengineering

• Development of selection criteria

• Development of screening questions

• Candidate Response Management

• Online ERP Functionality

• Online IMS Functionality

TOOLS

• Internet Mining and Research

• Strategic Sourcing

• Recruitment Marketing

• Career website development & hosting

• Interactive sourcing tools including:

o Email Blasts

o Alumni Cards

o Relationship Marketing

o Recruiting Event Management

o College campus strategies


o Diversity Media/Internet Strategy Planning

o Reporting

TECHNOLOGY

• Hodes iQ

• HRIS Integration

• Third Party Integration (Drug, Background, Skills Testing Vendors, etc.)

• Automated Online Scheduling

• Temporary ATS for transition to full ATS, or short term projects

POSITIONING

• Branding Strategies Internal and External

• Careers Website Redesign

• Media / Employment Marketing design and deployment

• Employee/Candidate Survey & Results/Solution Consulting

Problems in RPO

If a company failed to define its overall recruitment strategy and hiring objectives, then

any recruiting program may fail to meet the company's needs. This is especially true for

outsourced programs like RPO: RPO can only succeed in the context of a well-defined

corporate and staffing strategy.

As with any program, a company must manage its RPO activities. A company must

provide initial direction and continued monitoring to assure the desired results. Overall,

providing guidance to external activities can present a significant management challenge.

Outsourcing of company processes may fail or prove a poor organizational fit.

Improperly implemented RPO could reduce the effectiveness of recruitment.

The costs charged for outsourced recruitment transactions may total more than the cost of

the internal recruitment department.


RPO service providers may fail to provide the quality or volume of staff required by their

customers.

Placing all recruitment in the hands of a single outside provider may discourage the

competition that would arise if multiple recruitment agencies were used.

An RPO solution may not work if the company's existing recruitment processes are

performing poorly. An RPO solution may not work if the service provider has inadequate

recruitment processes or procedures to work with the client.

RPO may not resolve difficulties that organizations have hiring staff when the

organization is perceived negatively by potential employees. This will instead require

improved branding and an adjustment of image. The perception is that very few RPOs

can successfully integrate their client's brand and therefore do not represent their client's

brand as well as a retained search or internal recruiting resource may drive brand

representation and or marketing.

Further, most RPOs perform their staffing functions and service offsite, further

disconnecting the client's growth & recruiting strategy from the actual workforce within

the client company. This is important because during a period of rapid recruitment

growth, one of the many positive effects that a company typically enjoys is an increase in

the workforce wellness or an overall workforce positivity of sentiment of optimism that

comes with personnel additions... this may be lessened with an offsite recruiting function.

Organizations with efficient hiring process that are viewed as employers of choice by

potential staff may stand to gain negligible benefits from RPO.


THE BAKERS DOZEN - TOP 13 RPO PROVIDERS 1. KENEXA

Employees Placed Through RPO: 28,000

Kenexa is a global provider of employment process outsourcing (EPO) offering

outsourcing, employee research, and software to help companies hire and retain a

productive workforce. Kenexa manages staffing operations and recruiting campaigns

for Fortune 500 and mid-sized companies, managing some of the employment process

or the entire staffing processes. Kenexa provides single-source accountability rather

than partnering with external sub-contractors, avoiding potential issues that can arise

from the use of multiple providers. Kenexas EPO strategy reduces operating costs,

focuses on the core of the business, creates a variable cost structure, improves quality,

expedites speed to market, fosters innovation, and accesses best in class expertise and

technology.

RPO Client(s): Schering Plough, StorageTek, Corning, Microsoft, Teva

Pharmaceuticals USA

Services: Requisition Development, Sourcing, Screening, Process Management,

Administration, Skills Testing, Behavioral Assessment, Applicant Tracking, Employee

Referral Program Administration, Employment Advertising Strategy, EEO Program

Development and Reporting, On-Boarding and Ongoing Retention Programs.

Most Common Metrics: Time to fill, cost per hire, diversity indices, source

effectiveness, employee referral, funnel ratios, compensation metrics, and workforce

planning metrics.


2. KELLY HRFIRST


HRfirst, a Kelly Services company, is a recruitment process outsourcing and

consulting company that provides flexible, innovative recruitment strategies and

technologies that improve and accelerate the hiring process, saving clients time and

money.

RPO Client(s): Large companies in a number of different industries including an

international beverage distribution company, a Fortune 100 financial services

company, and a pharmaceutical giant

Services: End to End Hiring Programs--appointment of a dedicated program team;

design and install a customized candidate sourcing strategy; hiring process re-

engineering; recruitment technology assessment and recommendations; integrated

applicant tracking and requisition approval processes; management of all candidate and

hiring community communications; candidate offer management; conduct all post-

offer screening activity; establishment and management of hiring program partners;

and complete ongoing management of client hiring program. Customized Mission

Critical Hiring Projects--augmenting the clients internal recruitment function;

outsourcing of hiring for specific skill sets or geographic regions for clients (usually

for a specified time period involving volume hiring conditions); consulting and

program management services; technology consulting; workforce planning consulting;

assessment consulting; management of client employee referral programs;

management of campus recruitment programs; management of leadership development

programs; and design and management of employee retention programs.

Most Common Metrics: Cycle time to hire, requisition span, aging, diversity of

applicant flow, cost per hire, effectiveness of hiring source, and client and new hire

satisfaction.


3. SPHERION


Spherion is a publicly traded corporation with more than 2,150 recruiters operating

throughout 700 locations in the United States and Canada. Their broad-based

experience in staffing, recruiting, and workforce management is founded on an in-

depth understanding of the workforce and the issues that drive performance. It is these

core competencies that Spherion offers to clients who want to more effectively plan,

acquire, and optimize talent to improve their bottom line. Spherion has the ability to

deploy various RPO delivery models, ranging from low-touch engagements based on

standardized sourcing and recruiting workflows, to co-sourced and high-touch models

consisting of customized hiring processes, Spherion or client-specific technology, and

potential full ownership of an end-to-end hiring process. Their flexibility is further

enhanced by the ability to work within multiple technology environments, including

Brass Ring, Peoplesoft, eRecruit, Taleo, Recruitmax, and others. Spherion has been

delivering clients BPO since 1990 and RPO solutions since 2001.

RPO Client(s): Eastman Kodak, Agilent, Citrix, 180 Connect, W. W. Grainger,

Capital One, Cisco

Services: Solution Consulting Methodology and Business Case Development, Due

Diligence and Implementation, Sourcing and Pre-recruitment Pipeline Services,

Screening, Assessment Testing, Behavioral Interviews, Scheduling and Interview

Administration, Background Investigation and Compliance Management, Offer and

On-boarding Management and Orientation Training, 24/7 Report and Analysis

Platform, Process and Performance Management, Applicant Tracking System (ATS)

Technology Integration Policy, Total Workforce Acquisition, Account Governance.

Most Common Metrics: Source effectiveness; time to fill; interview to hire ratio;

offer acceptance rate; time to start; diversity; pay rate analysis; user

satisfactionresponsiveness, addressing problems, documentation, slate quality,

candidate experience; business relationsease of doing business, account management,

account support; and cost containment and cost reduction goals.


4. HYRIAN


Hyrian provides nationwide, end-to-end, long-term RPO programs exclusively to

Fortune 500 and Global 1000 companies. Hyrian covers the entire recruitment process

from job design, requisition management, sourcing, applicant screening, background

checking, and on-boarding, and even post-hire employee retention. Their programs are

transformational rather than transactional in nature, allowing companies to improve the

quality of hires as well as service levels to hiring managers and candidates, while

reducing cost. Hyrians Distributed Recruiting model combines supply chain, capacity

planning, assembly line, and quality-control practices adapted from the manufacturing

industry for a scientific and proactive approach to large-scale, complex recruitment.

Because Hyrians programs are all large and long-term, they are all custom-built,

seamless, and branded for the client.

RPO Client(s): UnitedHealth Group, American Express Financial Advisors

Services: Strategy, Sourcing, Screening, Selection, and Start. Represent approximately

30 discreet steps in the hiring process.

Most Common Metrics: Overall cost (staffing efficiency ratio), cycle time

(requisition approval to offer acceptance), offer-toacceptance ratio, source

effectiveness, hires per month, and requisition agings. Additionally, Hyrian maintains

an internal quality assurance department to measure the quality of processes. Quality

assurance staff gather satisfaction data from the end-user (hiring managers) for

reporting on recruiter responsiveness, professionalism, speed, flexibility, and overall

service level.


5. YOH HR SOLUTIONS


Yoh HR Solutions is a unit of Yoh, a leading provider of high-impact talent and

outsourcing services in the United States with more than $415 million in total sales.

Operating from more than 80 locations in North America and Europe, Yoh delivers

long- and shortterm temporary and direct placement of technology and professional

personnel, as well as managed staffing services, for the telecommunications, scientific,

information technology, and engineering communities.

RPO Client(s): General Electric (Yoh currently supports five business clusters

representing nine major business units in more than 200 domestic locations), Andrew

Jergens Company

Services: Recruitment Strategy Design, Job Posting, Sourcing/Mining/Networking,

Advertising, Recruiting, Slate Development, Interview and Travel Logistics, Candidate

Data (EEO-1) and ATS Administration, Visa Processing, Job Folder/Candidate

Disposition, On-boarding/Orientation, HRIS On-boarding, HRIS Administration, and

Co-op and Intern Program Management.

Most Common Metrics: Cost per hire, cycle time to fill, and percentage of candidate

diversity per slate.

6. STRAIGHTSOURCE


Entrenched in recruitment process outsourcing for more than 10 years, StraightSource

brings a tradition of success to the recruitment processfrom pre-hire to post-hire. The

company fortifies the HR function with increased value, reduced costs, improved hires,

and more control. Their flexible service delivery model is designed to consistently

execute a high-quality recruitment process so that client organizations are

synchronized to meet ever-changing recruitment and hiring needs.

RPO Client(s): UnitedHealth Group, Express Scripts Inc., Allstate Insurance

Company S


ervices: Recruitment Strategy, Job Analysis, Selection Process Design, Selection

Process Validation, Candidate Generation, Applicant Processing/Selection, Search,

Recruitment Management System (RMS), Recruitment Administration,

Background/Drug Screening, EEOC/DOL/OFCCP Compliance and Reporting, WOTC

Tax Credit Reporting, Contingent/Temporary Labor Consulting, Metrics/Analysis.

Most Common Metrics: Financial, retention, hire quality, fill rates, cycle time, hiring

ratios, and channel effectiveness.

7. THE RIGHTTHING, INC.


The RightThing, Inc. has provided end-to-end recruitment, staffing, and employment

process solutions and recruitment process outsourcing services in the HR marketplace

for more than 15 years. The RightThing was founded in 2003 by the original Selective

Staffing team, which was acquired by Aon Consulting in 1988. The RightThing is

focused on assisting organizations in accomplishing their hiring goals and objectives

through streamlining the administration of the front end of the hiring process through

outsourcing or providing staffing process re-design work. They work as an extension

of the clients HR team to meet hiring demands. The RightThing provides exclusive

hiring services to Fortune 2000 companies for a wide-range of hiring needs. They have

worked within more than 10 industries for 200 client companies to process more than

12 million candidates in North America.

RPO Client(s): Cyberonics, Merck & Co., Abbott Labs, Waste Management, GE,

TAP Pharmaceuticals, U.S. Steel, Sky Financial, Cardinal Health, Pfizer

Pharmaceuticals, Velcro

Services: Staffing, Process Consulting, Candidate Recruitment/Sourcing, Applicant

Intake, Screening, Testing, Interviewing, Candidate Correspondence, Data

Management/Reporting.

Most Common Metrics: Candidate satisfaction, overall cycle time, hiring manager

satisfaction, and interview-to-hire-ratio.


8. RECRUITMENT ENHANCEMENT SERVICES (RES)


Headquartered in Houston, Texas, RES is the recruitment outsourcing division of

Bernard HODES Group. RES was an early adopter of RPO and entered the fields of

recruitment outsourcing and applicant management in 1983. With outstanding talent,

innovative processes, powerful creativity, and state-of-the-art technology, RES

produces exceptional results for a wide variety of clients. Whether utilizing RES as a

complete recruitment services outsourcing provider, or choosing from an array of

project options, buyers are assured of customized, quality service based on best

practices.

RPO Client(s): The Hershey Company, Comerica, Hexion Specialty Chemicals

(formerly Borden Chemicals)

Services: Hiring Process Re-Engineering, Staffing Technology, Recruitment

Marketing/Branding.

Most Common Metrics: Quality, speed, efficiency, cost per hire, time to submit, time

to fill, fill ratio, and customer satisfaction.

9. ADECCO


This global HR Services company is active in temporary and permanent staffing,

outplacement, career services, and HR outsourcing. The Adecco Group operates from

more than 6,000 offices in 70 countries and territories, servicing hundreds of thousands

of clients and around 4 million temporary associates each year. In 2004, Adecco

generated revenues of 17.2 billion euros. The Adecco group is comprised of three

staffing and career management services divisions: Adecco, Ajilon, and Lee Hecht

Harrison.


RPO Client(s): General Electric, Renault, Robert Bosch, Citicorp

Services: Screening, Testing, Candidate Administration, Requisitions, Hiring, Datab

Database Management, Sourcing, Training, Supplier Management.

Most Common Metric: Success rates, attrition rates, process efficiency, user

satisfaction, and candidate satisfaction.

10. FUTURESTEP, A KORN/FERRY INTERNATIONAL COMPANY


Futurestep provides specialized services to clients looking to outsource some or all of

their HR recruitment functions worldwide. With fully integrated, single-source

solutions, Futurestep leverages its proprietary Enterprise Recruitment Methodology,

world-class technology, and international brand to transform the clients current

processes. Operating as the clients internal recruitment function, Futurestep will work

closely with the client to improve the recruiting efficiencies of quality of hire, speed of

delivery, and cost containment. Improvements are measured and monitored through

real time metrics then tied to strict service level agreements. On an ongoing basis,

Futurestep will act as a strategic partner in continuously recognizing best practices to

tactically elevate the client internal processes and to promote the company as an

employer of choice.

RPO Client(s): Confidential

Services: Consulting, Project Recruitment, Professional Staffing, Mid-Level Search.

Most Common Metrics: Time to fill with four distinct cycles, candidate ratios

throughout hiring process, and hiring manager feedback.


11. CRI, INC.


CRI is a nationwide recruitment process outsourcing service provider dedicated to

helping Fortune 1000 companies build talent-driven organizations through identifying,

hiring, and retaining exemplary staff. Founded in 1997, CRI is a rapidly growing

company that is new to the list. CRI integrates best-practice processes and flexibly

scalable resources into the HR function of clients. This newcomer has an approach that

supports the efforts of clients looking to transform their human resources activities into

value-added channels, branding their companies as employer-of-choice in their

respective industries. CRIs consultative approach is aimed at designing, implementing,

and operating proven hiring processes; and seamlessly integrating people, systems,

experience, and technology with each clients existing recruiting function. As an RPO,

CRI delivers a comprehensive and customized suite of recruiting and staffing

solutions, which can dramatically increase the quality of hires.

RPO Client(s): GE Capital, Genworth Financial, Edward Jones, KB Home, Deloitte,

Disney, General Dynamics, H.J. Heinz

Services: Workforce Planning, Workforce Attraction, Workforce Selection, Workforce

Hiring, On-Boarding.

Most Common Metrics: Days to fill, costs per hire, offer to hire, recruiting efficiency

index, candidate aging, client scorecard, and candidate scorecard.

12. TALENTTRACK


Headquartered in Toledo, Ohio, TalentTrack is a national provider of comprehensive,

end-to-end talent management solutions. They provide a unique blend of high-touch

and high-tech talent applications that deliver RPO in three ways: HR back office (staff

augmentation); event based outsourcing (projects); and long-term/ongoing outsourcing.

Their distinctive strategiesa combination of world class intellectual capital, high-tech,

cutting edge Web technology platforms, and other related toolsdeliver best-in-class


results. Pieces and parts of the talent management process are outsourced to

TalentTrack either short term, as needed, or on an on-going basis.

RPO Client(s): HCR Manor Care, Owens Corning, First Data Corp, TNS NFO, Fifth

Third Bancorp, Federal Reserve Bank Zurich, Faurecia, Ohio Savings

Services: HR Back Officeoffer an effective staff augmentation strategy, placing highly

skilled,

certified talent management personnel at client site, vendor site, or virtually; Event-

Based Outsourcingdesigned to work with the clients talent management team to

develop and implement a solution that will meet the needs of the organization, a short-

term solution to an ongoing long-term engagement that is a method of tasting before

committing to a long-term solution; Ongoing Outsourcingoperate a total talent solution

meeting the short- and long-term goals of the organizations including transition and

transformation as well as access to best-in-class technology; E-cruiting solutionInternet

recruiting product that utilizes a job board aggregator and Web spider technology to

drive the appropriate candidate flow for each skillset, offer a level-one screening

(entirely automated), and human intervention (certified recruiters) to conduct phone

interviews.

Most Common Metrics: Cost per hire, time to fill hit rates (fill rates), applicant

source metrics/reports, customer satisfaction metrics, and new hire/exit survey metrics

and reports.

13. SUMMIT HR WORLDWIDE


Summit owns and operates companies globally that provide HR services including

contingent staffing and recruitment process outsourcing to the worlds leading firms.

Summit offers a new approach to the way in which human capital is identified,

sourced, acquired, and managed. Summits vision is to create high-quality, low-cost

service delivery platform for HR services using process excellence and high-quality

global talent pool.


RPO Client(s): CISCO, Stanford Linear Accelerator Center, Sun, KLA Tencor, LSI

Logic

Services: Source; Interview; Test; Background Check; Talent Community Building;

Headhunting; Resume Database Building; RPO IT systems; Designing, Building, and

Running Recruiting Shared Service Centers; International Recruiting; India-based

Recruiting.

Most Common Metrics: Time to fill, fill ratio, cost per hire, time to submission,

submission per job order, time to first interview, number of candidate reschedules, and

number of manager reschedules.


REVIEW OF LITERATURE

Purpose of Literature Review The purpose of the literature review is to identify the problem statement, understand the

secondary data that has been gathered in the field of study and to make new finding on

the problem statement.

RPO Is the Next Generation Of HR Services Ramandeep Nehra, EFY News Network (Wednesday, April 11, 2007 8:22:55 PM) With more companies looking to streamline their internal HR functions, offering end-to-end recruitment services is an alternative that the RPO service providers can tap into

Wednesday, April 11, 2007: With the costs of payrolls and payroll taxes, health-care and

other expenses associated with full-time workers shooting up day by day, outsourcing has

now become an essential solution for businesses of all sorts. Moreover, access to superior

competency typically emerges as a motivator for outsourcing; the external service

provider offers a degree of sophistication that in-house specialists cannot match. In a

nutshell, outsourcing is resorted to with a view to reducing firm costs and achieving

improvement in four key areas – quality, cost, speed and service. How does a company

enhance these core areas during the recruitment process? The answer is outsourcing and

transferring all or parts of the staffing processes to an external service provider through

Recruitment Process Outsourcing (RPO) or Employee Process Outsourcing (EPO). It is a

more specific department for HR personnel and a new subset of Business Process

Outsourcing (BPO) and emerging as a key outsourcing demand from the clients.

As Pam Berklich, Global SME and thought leader for RPO Kelly Services Inc defines

RPO, “In my experience, and in the world of true pure play RPO providers, this practice

involves end to end responsibility for the recruitment/hiring process. There are really


only two forms of RPO, namely the Enterprise RPO and Project Based RPO.” In the

Enterprise RPO, a client organization decides to outsource their entire recruitment/hiring

function for all hiring needs including all skill sets and all job families within the

organization. Here the RPO partner becomes the seamless extension of the HR function

and serves as the recruitment/hiring department. In the second type of RPO, a client

organization decides to outsource certain job families and skills to the RPO partner, or it

outsource the expansion of a client’s operations into defined geographies.

True RPO is not about outsourcing a piece or pieces of the recruitment process - it is

taking full responsibility for the entire function. Therefore, it also becomes significant for

an organization to know when and what parts of the recruitment process need to be

outsourced. The organization needs to be aware of its requirement vis a vis business

growth and expansion plans. As Shailja Puranik, COO, Xansa BPO points out," It is most

appropriate to outsource when an organization has achieved stability and maturity of

processes and looks to outsource those components that are well-defined, repeatable and

reproducible."

Being a viable, strategic and cost effective solution, RPO has turned out to be a growing

global trend. “RPO should along with its cost effective feature also be given its due

importance for hiring the " right candidate from a wider pool of talent available," adds

Rahul Goyal, CEO, Ma Foi, UK. The emergence of RPO solutions is growing at a very

steady pace. No matter how you slice the share from the HRO market worldwide, it still

remains substantial. The trends in growth vary on the basis of geographical location and

the acceptance of outsourcing solutions within country cultures. Era, a recruitment

industry body, estimated the size of the RPO industry to be around 6000cr for 2006-2007.

However, as per Jacob Samuel, Associate Partner, Elixer Web Solutions, “This figure

does not include the market size which gets added through overseas business and other

recruitment related expenses.” This year the RPO market is expected to grow at 300%

over the last year,” he added. “The predictions are not consistent. From most assessments


there is a general agreement that the potential for this market is estimated at $20 billion

by the end 2008. Not only this but India is predicted as the one of the fastest growing

market trends for RPO (30% or greater annually) in the years ahead,” observed Berklich.

Talking about the market, Sunil Anand, Vice President, Datamatics Ltd, adds, “It would

be $25 billion globally. But I cannot comment on the Indian market as it is still in the

nascent stage.” Presenting almost the same view Puranik adds, “UK, US, Australia being

the mainly English speaking countries will comprise around 10-15% of the outsourcing

pie – a good enough size to consider as one of the niche areas of focus for India.” But as

per the Goyal of Ma Foi, “Although at present India does not figure out in the global

RPO market, the country, with its excellent skill set, developing infrastructure, along with

a huge IT and labour pool, is expected to grow at a fast pace within in next three years.”

However, problems like lack of differentiation, labour shortages and competition among

the candidates might act as deterrents to the growth of the Indian RPO market. Above all

one of the biggest problems that RPO companies face is with the HR Manager and HR

hirers from the organization. Most often its is difficult for an RPO vendor to explain and

negotiate with the organization about the mechanism of hiring. So “the understanding of

the RPO as an industry has to evolve in India," says Goyal. Highlighting the most

common problems faced by RPO's, Berklich emphasized on educating the market on the

benefits of RPO as well as its pitfalls. Puranik identifies talent management, knowledge

enhancement, career progression opportunities as the top three challenges faced by the

industry.

Since the demand far outstrips supply in this segment with an alarmingly increasing

attrition rate and paucity of skilled candidate this shortage leads to immense poaching of

talent in the industry per se. Moreover, RPO being a rather infant industry (less than 10

years), it is difficult to secure the experience and talent required to meet the growth

demand of the expanding industry. “This business needs investment in training and

upgrading of skills and strong HR activities,” opines Anand


According to a study across the nation, 21000 appointment letters were sent out in a

particular month while only 8000 showed up on the joining date. This has turned out to

be a tough challenge for the RPO industry as this adversely affects the Client business.

The biggest threats to the industry are receptiveness to the concept, shortage of skilled

recruiters, high investment business and internal resistance,” reiterates Samuel.

All in all, the most important qualities to look for in a full service RPO provider are

flexibility, time to fill / speed and experience / sourcing expertise including the

experience track record in hiring large volumes which is very different from the adhoc

hiring. Last but not the least, is of course the global reach of the recruitment provider and

quality of candidates recruited so far. Today, almost all industry verticals require RPO

services and it is even beneficial for companies who operate in the niche segments.

Till date, RPO services have been chiefly employed by retail, pharmaceutical and health

care, financial and insurance, manufacturing and aviation industry. The trend seems to

get hold of not only big organization but also the small or mid-sized organization. As the

trend goes, the managed recruitment services or the recruitment process outsourcing is

expected to acquire the centre stage this year. As an RPO largely affects an

organization’s business growth and success, the later should have a detailed

understanding of the concept and also of the expenditure for the recruitment process. This

helps them decide which processes are to be outsourced and which RPO is best suited to

the unique requirement of the company.


Methodology of the review of literature Different sources used in order to collect the information or data are:

� Magazines and journals

� The internet

� Publications

� Articles

The articles have been analyzed and used in the research for better understanding of the

topic.


RECRUITMENT OUTSOURCING SERVES UP OPTIONS Companies can get a perfect fit and save money by outsourcing portions of their

recruiting function. Payroll outsourcing is often black or white. A company usually either

handles payroll in-house or outsources it entirely. Recruitment outsourcing is a function

of a different color.

With employment process outsourcing (EPO), sometimes called recruitment process

outsourcing (RPO), companies have the flexibility to outsource a little—or a lot. Kellogg

Co., for example, has chosen Recruitment Enhancement Services, a division of Bernard

Hodes Group, to handle all of its recruiting.

Although “still in its infancy,” EPO is the fourth-largest component of HR being

outsourced and the fastest growing, according to Allan Schweyer, executive director of

the Human Capital Institute (HCI). Schweyer’s research has led HCI to establish a

“learning track” on the topic.

In Search Worldwide Corp. surveyed 300 HR executives about professional-level EPO

and found that more than 30 percent are doing at least some recruitment outsourcing.

“With recruitment most people outsource a specific business unit or specific function.

People are testing it and in general finding that it works for them,” says Steven Landberg,

InSearch’s senior vice president and managing director. It is working so well, he notes,

that 60 percent of the surveyed users plan to increase their recruitment outsourcing.

“Recruiting has more personal touches; it’s more cultural- and relationship-oriented.

There are more options than in some transactional-oriented disciplines,” says Jane

Paradiso, national workforce planning director for Watson Wyatt Worldwide. Watson

Wyatt does not offer EPO but counsels clients about outsourcing choices. “It’s not a

black and white thing,” Paradiso says.

It has taken a little time to learn that. Five years ago, “when you talked about

outsourcing, the recruitment piece was always left off,” says Bruce Ferguson, who is

responsible for talent acquisition solutions for Hewitt Associates. “People would think,

‘That’s too critical to our needs.’ ” In the past two years, “that has switched and in almost


every deal recruitment outsourcing has been one of the primary things clients want to talk

about. They realize there is a way to operationalize recruitment that helps them meet their

goals of getting the right people for less,” says Ferguson, who was with Exult before it

merged with Hewitt last October.

Those are key reasons for the increased interest in EPO: the need to keep costs down and

the need to keep the talent pipeline full. “For the past few years, the focus was on cost of

hire. But demand is rising, and fewer good people are looking,” Landberg says. He

believes that while many recruitment outsourcers sell their services primarily on their

ability to cut costs, “people are actually using outsourcing to get better results in terms of

talent.”

Still, those cost savings are no small matter. As companies’ recruiting needs ebb and

flow, sometimes “they have staff with nothing to do. We flatten out those peaks and

valleys,” Ferguson says. “We can measure [cycle time, quality and customer

satisfaction], and we can do it for less money. We can take the strength

of our network and leverage it so they can significantly reduce the cost of recruitment. …

We typically will give them a guaranteed cost savings.”

Kellogg Co. has seen a 60 percent drop in its cost-per-hire rate as a result of outsourcing,

according to Cydney Kilduff, director of recruiting and staffing. And the time it takes to

fill a position has been cut almost in half.

Kellogg, in fact, now has only two corporate employees with recruiting responsibilities.

Those responsibilities are:

•Setting strategic priorities and communicating them to the vendor.

•Developing, managing and monitoring the vendor relationship.

•Serving as internal champion for the outsourcing model.

Yet another reason for the upswing in interest is technology. “The outsourcer can invest

in the technology, keep it current and spread the cost across multiple clients,” says Carl

Greenberg, senior vice president of Aon Consulting, which has an EPO component.

Elliot Clark, chief operating officer of Kenexa, agrees that is a big part of the attraction.

“We can bring the technology in with us. In some cases customers have legacy systems

that we work with, but more and more they’re looking for turnkey solutions.”


The Role of Technology

Technology has changed the recruiter’s job. “Recruiters used to go into this because they

wanted to talk to people,” Ferguson says. “Now there’s a demand for faster turnaround,

and you can’t do it without technology. You have to be great at networking with

technology and the old-fashioned person-to-person way. The good news is, I don’t think

needs are going to change.” In-house or outsourced, companies need recruiters who “can

find the right people and help guarantee they’ll stay. They have to be able to achieve

business objectives.”

In spite of—or perhaps due to—the emergence of technology in recruitment efforts,

Greenberg, Clark and Ferguson all see a bright career path for in-house recruiters, who

will be able to devote more time to workforce strategy after turning the transactional

work over to outsourcers.

RPO “is not abdicating the selection process of who ends up on your doorstep. It’s still

the client’s responsibility to set strategy about what kind of people, what kinds of

competencies and, ultimately, who is given an offer. It’s not for the outsourcer to decide

who will get an offer,” Ferguson says.

Companies have finally come to understand that outsourcing is not about giving up

control but about freeing up more time to focus on strategy, Clark says. “They agree that

talent is very important; they don’t agree that they should do the tactical sourcing,

processing and onboarding. They come to firms like Kenexa [that have] a track record to

do that work.”

Aon Consulting does “the sourcing of candidates through their on boarding. We do all of

it or any part of it,” Greenberg says. A particular strength, he adds, is that Aon has

industrial psychologists that can assess candidates.

“We have a package of different types of tests and different methods of delivery,” he

says, including “a lot of job simulation.”

Ferguson sees it as the best of times for all recruiters, not just those in-house

concentrating on strategy. Working in the recruiting outsourcing business “make

you the business, not internal overhead. When you work for an outsourcing company,

you are a revenue-producing person.” Another upside is that “there are a variety of clients

to work for or with and different management opportunities.”


Better for Large or Small Companies?

EPO experts disagree over whether outsourcing works best for large or small companies.

Companies with more than 1,000 employees are more likely to use EPO, according to

Schweyer. Ferguson agrees that it “is largely focused on larger companies, as is RPO

[business process outsourcing] in general. As outsourcers become more sophisticated and

offerings become more ingrained and accepted, it will move downstream.”

But Watson Wyatt’s Paradiso argues that larger companies are often less likely to

outsource because “they want their own direct input” into branding the company and

because they need in-house recruiters to handle the higher volume. Smaller companies,

on the other hand, “don’t have the infrastructure, so they want to deal with the recruiter

when they need someone.” There is also a variety of opinions about the types of positions

best handled by EPO. Paradiso sees it as easiest to outsource high-volume positions that

require specific testing. “As you move up the line, it gets harder to assess cultural fit.”

Sales have become a popular target. Kenexa, for example, recruits for all primary sales

positions for pharmaceutical giant Schering-Plough. “They see their core competency as

making and selling and marketing high-quality drugs. We can provide them with turnkey

operations,” Clark says.

Aon also handles recruiting for pharmaceutical companies, as well as for manufacturing,

seasonal retail and call centers. The common denominator, according to Greenberg, is

that these companies generally have a small recruiting department that can handle normal

attrition but can’t manage the hiring blitzes needed when a pharmaceutical company

releases a new drug or a manufacturing company opens a new plant or shift.

EPO vendors naturally believe they offer an advantage over HR RPO generalists.

“It’s better to have a strategic partner than people doing a little of this, a little of that,”

says Landberg, who believes it is important to know the recruitment outsourcer’s

background—whether it was originally a temporary, technology or retained search firm.

To get retained level quality across the recruiting spectrum, “you need a recruitment

partner. You get greater value because you have someone who is more efficient, who

becomes much more of a partner vs. a vendor. It’s all about improving the effectiveness

while not driving up cost. Everybody’s doing it in their own way,” he says.


Many generalist HR outsourcing firms “have already stubbed their toe because they don’t

have the infrastructure sourcing engine” to handle recruitment outsourcing, according to

Clark. “Some who say they do RPO are often just sourcing machines; they’re just spitting

resumes. There’s more to staffing than just recruitment.

“Recruiting is a different animal,” he says. “It’s less like an HR generalist, more like

process management and sales. Staffing people have to have ability to sell the concept”

of the position and the company to high-potential hires.

Stephenie Overman is an Arlington, Va.-based freelance writer who specializes in HR

issues.


CHAPTER 2 PROBLEM STATEMENT

• Criteria for the selection of RPO.

• An assortment of considerations for deciding on RPO

• Effectiveness of a RPO with the company.

CHAPTER 3

RESEARCH OBJECTIVES:

• To identify the factors considered while outsourcing the recruitment process.

• To identify RPO providers.

• To find out the importance of RPO for a company


CHAPTER 4 RESEARCH METHODOLOGY Area of enquiry:-Consultancy firms and other personal contacts. Sample: The sample consists of fifty companies. Data collection: The data will be collected through contacts and consultancy firms

spread over the city.

Data analysis and inference: A structured questionnaire is used to analyze the data.

The data generated is exposed to statistical treatment through the application of relevant

statistical tools and inferences are drawn accordingly.

Primary data is collected by the questionnaires.

Secondary data is collected by the referring to several journals, books, Internet,

magazines etc.

Questionnaire Design:

The data collected during the research is Primary in nature and in that Questionnaire

method has been taken because it is cost effective, free from the biasness of the

interviewer and respondents can give sufficient time to give well thought out answers.

A questionnaire is a formalized set of questions eliciting information. It contains closed

ended questions to elicit the required information. The closed ended questions were

asked as they are easier and much convenient for both the respondent and the researcher.

A total of 50 respondents were interviewed and their opinions were taken regarding their

perception, awareness and attitude towards the RPOs.


Data analysis and inference: The questionnaire technique is used for the survey.

The data generated is exposed to statistical treatment through the application of relevant

statistical tools and inferences will be drawn accordingly. Relevant test of significance

will be used.

Hypothesis:

4. H0: All the factors are equally important and are considered while selecting an RPO.

H1: Only few factors are considered for selection of RPO.

5. H0: All the reasons are equally important and there is no difference between the

priorities of these factors.

H1: There is difference between the priority levels among the reasons.


RESEARCH LIMITATIONS

The importance of RPO for a company will vary from others since the research

investigation is generic in nature.

There can be a hurdle to access the information, since certain factors regarding RPO

will not be disclosed for security reasons. However this can be overcome through

meticulous cross-checking of the data.

The survey is conducted in Bangalore city only.

‘

.


CHAPTER 5

DATA ANALYSIS AND INTERPRETATION

1. Do you outsource any of your HR services

a. Yes b. No .

36

14

ab

Interpretation: As it is evident from the above graph majority i.e. 72% companies

outsource their HR activities.


2. If yes rank the following according to your importance

a. Online job portals b. Employee References c. R.P.O. Service providers d. Others

preference

0

5

10

15

20

25

a b c d

category

num

ber o

f res

pond

ents

Series1

Interpretation: From the above graph it is clear that 20 of 50 respondents preferred

RPOs to other alternatives.


3. Are you aware of RPO a. Yes b. No

64%

36%

ab

Interpretation: The graph depicts that about 64% of the market is aware about the

RPO services.


4. What factors do you consider while selecting an RPO

a. Cost reduction b. Service improvement c. Better people d. Effective time management Inference: ψ2 test is implied. Not Important

Some what important

important Very important

Extremely important

8 7 23 12 9 4 6 7 11 22 4 14 11 9 12 4 7 7 12 20 N Imp SW Imp Imp V Imp E Imp Total a 8 7 23 12 9 184 b 4 6 7 11 22 191 c 4 14 11 9 12 161 d 4 7 7 12 20 187 --------- 910 --------


O E (O-E)2 (O-E )2 E E = 910 = 227.5 -------- 184 228 1936 8.5 4 191 228 1369 6.0 161 228 4489 19.7 187 228 1681 7.4 --------- Ψ2 cal 41.6 --------- Level of Significance = 5% Degrees of Freedom = (n-1) = (4-1) = 3. ψ2 tab = 12.8 H0 is rejected. So alternative hypothesis is accepted. Therefore companies consider only few aspects as important while selecting

an RPO.


5. What are the reasons for selecting an RPO a. RPO is superior to in-house recruiting b. RPO has the skill-set, and has developed sophisticated tools c. Allows the HR department to focus on other strategic issues d. Single point of entry to the candidate market Inference: Not Important

Some what important

important Very important

Extremely important

2 7 8 14 19 3 5 18 12 12 1 3 5 19 22 17 8 6 11 8 N Imp SW Imp Imp V Imp E Imp Total a 2 14 24 56 95 191 b 3 10 54 48 60 175 c 1 6 15 76 110 208 d 17 16 18 44 40 135 --------- 709 --------


O E (O-E)2 (O-E )2 E E = 709 = 177.25 -------- 191 177 196 1.11 4 175 177 4 0.02 208 177 961 5.43 135 177 1764 9.97 --------- Ψ2 cal 16.52 --------- Level of Significance = 5% Degrees of Freedom = (n-1) = (4-1) = 3. ψ2 tab = 12.8 H0 is rejected. So alternative hypothesis is accepted. Therefore the priorities given to the reasons for selecting the RPOs by the

companies differ among the above reasons.


6. What kind of service do you outsource to an RPO

a. Core recruitment process b. Help the recruiting department c. Particular requirement d. Contracts for offshore requirement (if any) e. Filling key positions

30%

10%

10%

26%

24%

abcde

Interpretation: Companies prefer outsourcing to the RPO s their core recruitment

processes the most followed by the offshore requirements which is 26% and the

key positions of their companies which is 24%.


7. Is RPO the only means for talent supply chain a. Yes b. No

36%

64%

ab

Interpretation: 64% of the respondents do not consider RPO s as the only means of

talent supply chain. This can be because the companies prefer different kinds of

recruitment sources as per the requirement and not only they believe in RPO s for all the

requirements.


8. Do you uphold certain metrics for RPO Providers a. Yes b. No If yes please mention ______________________________________

92%

8%

ab

Interpretation: Almost all the companies have their own metrics for selecting the RPO

s according to their requirements. And these metrics are different to different companies

depending their HR policies. These metrics could be like:

The Credibility & brand name along with the metrics they have in recruitments & service

levels that they are providing


9. Failing to meet these metrics would result to

a. Simple correction

b. Termination of services to the RPO

56%

44%ab

Interpretation: According to the respective company norms the action for the failure of

the RPO s meeting the metrics differ from a small correction to the termination of the

RPOs

10. Do you have a lucrative awarding system for achieving those metrics a. Yes b. No If yes what are they?


__________________________________________________________

52%48% a

b

Interpretation: As it is evident from the graph about 52% of companies have awarding

system for the RPO s with good performance. These awards could be like: Holding them

as the prime partners of the company & give them the appreciation in terms of

association with the company as well as giving them good business & commercials.

.


11. What do you feel about the future of RPO

a. Bright

b. Satisfactory

c. Can’t say

27

13

10

0

5

10

15

20

25

30

a b c

Series1

Interpretation: From the research it is found out that about 54% of the companies

believe in RPO s and they expect a bright future for the RPO providers

12 What are the risks associated with the company if they go in for an RPO

a. Losing managerial control

b. Hidden and missed out costs leads in underestimation of overall costs

c. Threat of security and confidentiality of issues for a company (Salary etc)


19

11

20

0

5

10

15

20

25

a b c

Series1

Interpretation: It is found that the companies consider the security of confidential

information and the threat of loosing managerial control as the critical risks in hiring the

RPO providers.

13. How do you handle the above risk with the RPO providers ______________________________________________________________ Interpretation: Companies prefer signing Non-Disclosure agreements. 14. What is your percentage of cost reduction by opting for an RPO ______________________________________________________________ Interpretation: Cost reduction for the companies by hiring an RPO is from the areas

like Employee Engagements and other miscellaneous expenses.


15. Do you believe that RPO is the solution for all vacant layers of an organization a. Strongly agree b. Agree

c. Strongly Disagree d. Disagree

e. Can’t say

16%

32%

14%

26%

12%

abcde

Interpretation: About 32% of the companies believe that an RPO can serve for

vacancies at all levels of the organization.


16. Do you feel that RPO might be a way to offload high volume recruiting a. Strongly agree b. Agree


e. Can’t say

38%

28%

10%

16%

8%

abcde

Interpretation: From the graph it is evident that a major percentage of the companies

believe in that RPO s can help the companies in offloading the high volumes of recruiting


17. Does your organization outsource the performance of a function and not the responsibility for it a. Strongly agree b. Agree


e. Can’t say

12%

26%

16%

34%

12%

abcde

Interpretation: Most of the companies outsource just the performance function to the

RPO s but not the responsibility for it.


18. Do you think outsourcing is worth it if there is no recruiting leadership provided by The RPO provider to cope with the recruiting challenges a. Yes b. No

12

38

0

5

10

15

20

25

30

35

40

a b

Series1

Interpretation: About 76% of companies do not prefer an RPO, if it does not provide

recruiting leadership to the company. Companies prefer an RPO with good performance

and which can provide competitive advantage to the company


19. Do you feel that RPO is nothing but “PANIC STAFFING” a. Yes b. No

29

21

0

5

10

15

20

25

30

35

a b

Series1

Interpretation: About 58% of the respondents believe that RPO s are considered as the tool for staffing only when the requirement is urgent and not for general recruitment process of the company. 20. How do you calculate the return on investment when you outsource your requirement To the RPO provider ____________________________________________________________________ Interpretation: There is less risk involved in terms of logistics & resource used if an

RPO is hired, in terms of contract staffing company can have good hold on resources as

well as the CTC payouts through the contract staffing which can help organization to

have low risk


CHAPTER 6

SUMMARY OF RESEARCH FINDINGS

As per the research carried out on RPO it has been found out that majority of companies

favor RPOs . As we can clearly understand the findings from above the charts that the

companies prefer RPO to other outsourcing agencies. The reason for selecting an RPO is

also not only the cost aspect but the performance and the time management. Not only are

the benefits, the companies are also satisfied with the performance of RPO. Most of the

companies agreed on certain areas, which test the RPOs’ performance. Through the research it is also found that the companies uphold certain criteria while

selecting an RPO and in case of any failure of the RPO in achieving these metrics would

lead to the action to the extent of termination of the RPO services with the company.

RPOs are the new trend followed by the companies for their recruiting processes, as

nowadays companies are given with excess of work loads and targets. By which the work

carried out by 3 persons had to be done by 1 employee with the same levels of high

performance quality. This has become a challenge for most of the companies and this

also helps in having the competitive edge in the market. So the companies want to cut

down their employee number to the required and the processes which can be carried on

by the agencies are being outsourced. And companies also want to cut their costs and

utilize the resources to their best.

An RPO makes it true by taking up the time consuming and processes which involves

high costs, thus providing the companies with enough time to carry on their strategic

processes and letting them a competitive edge in the market.


CHAPTER 7

RECOMMENDATIONS

Certain recommendations were made to companies in general per the verified result of

my research work and they are:

Large organizational size is no longer a competitive standard. Small, agile niche

competitors can now change industries and cost structures overnight .Competitive

pressures are more sever in a global economy .Product and service cycle times have

reduce dramatically, and time based competition demands quicker response. Investors

and analysts demand a focused management that delivers .Bottom line performance,

growth and size are no longer predictors of future profits. Significant operating and

financial performance improvements are critical to success, and long term survival

.Supplies of technical specialists is reasonably plentiful, thus employing them internally

is unnecessary to their availability.

Suggestions for Outsourcing and Conclusion

As per the survey if was found that the reason for outsourcing is that the companies do

not have to build the internal skills and technologies for recruiting. If the company is

looking for a way of providing increased services without incurring additional internal

cost and maintenance of those programs, outsourcing is the good solution.

Outsourcing gives the companies an enhanced control of their HR/benefits

responsibilities, especially in those areas like administrative control of data, reports, and

staffing.

Finding a vendor that can provide comprehensive solutions enhances the effectiveness of

outsourcing.

Effective time management is one of the factors that the companies have to be considered

while outsourcing to an RPO.


While selecting an outsourcing agent consider its records with other companies and the

performance changes at the organization or the results to the company by these agencies.

Calculate the investment and the rate of return on that to the company expected from the

outsourcing agency.

Make agreements or policies which would help the companies in protecting their

confidential information.

Companies should utilize its in-house recruiting resource to the outsourcing options as

this would help the companies to enhance their skill and being independent at any state of

the market.

Suggestions to the RPOs:

RPO s should try to utilize the best of its resources and also of the company’s to be in a

win -win situation to the company and also to the RPO.

RPO s should try enhancing the awareness about the benefits of outsourcing the routine

and time consuming jobs like recruitments.

These RPO s should expand their services from just recruiting to other areas which are

routine in nature to the company. Which helps the RPO s to get expertise at other

different areas of the company functions


Certain questions which were answered after I took up this research

work.

1. Does the outsourcing opportunity match the organization’s business needs?

If an outsourcing initiative can create a strategic advantage, then its worth pursuing. If it’s

merely intended to deal with temporary tactical problems--such as a reluctance to invest

in an upgrade to a core HRMS while revenues are down then it’s doomed to failure.

2. Will outsourcing improve performance?

A successful outsourcing initiative, translates into service that is better than it would be if

an organization handled the tasks internally. Before turning to RPO, it’s important to ask

how and why it will drive improvements.

3. How can an organization that turns to outsourcing develop excellent human

resources generalists, specialists and experts in managing vendor relationships?

Remaining human resources executives and managers use metrics and other

measurements to ensure that the company is managing its initiatives and relationships

well and meeting business goals.


4. How can an organization understand and control costs?

It’s essential to understand the cost structure for various components of outsourcing,

particularly if the entire package of products and services is bundled into a single fee.

5. Are adequate protections in place for when business conditions change?

Make sure that the proposed contract protects your organization as much as it protects the

outsourcing provider. Your business may look quite different three to five years from

now.

6. What are the cultural ramifications of RPO?

How will managers and employees react to the changes? Will these individuals view the

new system as a positive or a negative? How can such reactions affect the success of the

initiative? Is it possible that these individuals will walk out if they see a major upheaval?

7. Who will manage the financial and performance aspects of the project?

Without people, processes and technology to measure and manage the outsourcing

initiative, an organization can find itself overspending and Underachieving. Factoring the

management aspects of the task into the initial proposal can reduce the odds of problems

occurring later on.


8. Is there an escape strategy?

If the RPO provider fails to live up to expectations-- even with a solid service-level

agreement in place--or if the vendor is acquired by another firm that has been previously

rejected (because of management style, ethics, customer-service track record, technology,

geographic coverage or other factor), there must be a way to make a change without

enduring a crippling disruption.

.


ANNEXURES

Bibliography:

JOURNALS:

• Business Standard (Strategist)

• Harvard Business Review

• Journal of HRM Review (ICFAI publications)

• Business Line (Catalyst)

• Human Capital

WEBSITES USED: • www.RECRUITMENTPROCESSOUTSOURCING.com

• WWW.GOOGLE.COM

• WWW.TEOMA.COM

• WWW.INDIATIMES.COM

• WWW.REDIFF.COM

• WWW.RD-INDIA.COM

• WWW.HRM.COM

• WWW.NHRD.COM


QUESTIONNAIRE/SURVEY INSTRUMENT

Name: Date:

Organization working for:

RPO Questionnaire

1. Do you outsource any of your HR services

a. Yes b. No 2. 2. If yes rank the following according to your importance

a. Online job portals b. Employee References c. R.P.O. Service providers d. Others specify ____________________________ 3. Are you aware of RPO a. Yes b. No


4. What factors do you consider while selecting an RPO

a. Cost reduction b. Service improvement c. Better people d. Effective time management 5. What are the reasons for selecting an RPO a. RPO is superior to in-house recruiting b. RPO has the skill-set, and has developed sophisticated tools c. Allows the HR department to focus on other strategic issues d. Single point of entry to the candidate market 6. What kind of service do you outsource to an RPO

a. Core recruitment process b. Help the recruiting department c. Particular requirement d. Contracts for offshore requirement (if any) e. Filling key positions 7. Is RPO the only means for talent supply chain a. Yes b. No


8. Do you uphold certain metrics for RPO Providers a. Yes b. No If yes please mention ______________________________________ 9. Failing to meet these metrics would result to

c. Simple correction

d. Termination of services to the RPO 10. Do you have a lucrative awarding system for achieving those metrics a. Yes b. No If yes what are they? __________________________________________________________ 11. What do you feel about the future of RPO

d. Bright

e. Satisfactory

f. Can’t say 12 What are the risks associated with the company if they go in for an RPO

d. Losing managerial control

e. Hidden and missed out costs leads in underestimation of overall costs

f. Threat of security and confidentiality of issues for a company (Salary etc)


13. How do you handle the above risk with the RPO providers ______________________________________________________________ 14. What is your percentage of cost reduction by opting for an RPO ______________________________________________________________ 15. Do you believe that RPO is the solution for all vacant layers of an organization a. Strongly agree b. Agree


e. Can’t say

16. Do you feel that RPO might be a way to offload high volume recruiting a. Strongly agree b. Agree


e. Can’t say


17. Does your organization outsource the performance of a function not the responsibility For it a. Strongly agree b. Agree


e. Can’t say

18. Do you think outsourcing is worth it if there is no recruiting leadership provided by The RPO provider to cope with the recruiting challenges a. Yes b. No 19. Do you feel that RPO is nothing but “PANIC STAFFING” a. Yes b. No 20. How do you calculate the return on investment when you outsource your requirement To the RPO provider ____________________________________________________________________


alluru madhuri(07 xqcm6001

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