BIZ Growth Strategies
Newsletter: BIZ Growth Strategies
Topic: Employee Management
Article Date: 10/30/2006
Recruitment process outsourcing - The time has come
According to many recent business articles, Recruitment Process Outsourcing (RPO) is becoming a popular hiring solution for a wide variety of businesses, including those that are large, but don’t want to employ scores of recruiters; are attempting ambitious expansions or rollouts; require multiple and/or concurrent hiring initiatives; or have staffing projects that must be carried out on time and within a prescribed budget.
RPO allows all of these companies to maximize their talent recruitment efforts enterprise-wide or on demand. It’s being used increasingly across the United States and internationally, as well.
History of outsourcing HR
To understand why RPO’s time has come, let’s take a look at the history of outsourcing the human resource aspects of business. About 15 years ago, professional employer organizations (PEOs), also known as employee leasing companies, came onto the business scene and were warmly greeted by many companies.
Initially, PEOs were perceived as a panacea personnel solution for many small companies. Touting the cost advantages of grouping small businesses under one employing entity, they offered access to bundled payroll services, employee benefits and workers compensation insurance. They also claimed the ability to provide human resource support.
Unfortunately, many PEOs didn’t actually have well trained or sufficient human resource expertise on staff to enable them to provide consistent and high-quality human resource services. Many cost advantages associated with PEOs have diminished in recent years, and most PEOs have gone out of business.
A better solution
Human resource outsourcing (HRO) is a better solution for many small and midsized employers. It offers companies complete human resource business process outsourcing without entailing the loss of employer control often associated with PEOs. With strong technology bases, the best HRO service providers — such as CBIZ HRO — offer different tiers of services to meet the needs of all sizes and types of employers.
These services include:
HRO offers a complete HR delivery approach that enables employers to take much better care of their employees and reporting requirements without needing to support a huge infrastructure.
Flexibility is key
RPO can be bundled with HRO — or not. It’s up to the employer. For those facing rapid growth challenges, constant hiring needs or expanding product or services lines, the quest for qualified talent may seem endless. And with shortages predicted for skilled talent in a variety of fields at many levels of education and experience, this challenge isn’t likely to diminish anytime soon.
RPOs essentially remove the drama and time-consuming aspects of staffing while finding the best talent that will help a business thrive. A good RPO system follows all of the steps top-notch internal human resource professionals would take to fill an important job if they had the time. RPO experts also can serve as objective sources of advice to assess staffing needs. Further, they can design and provide a high caliber staffing system to enable RPO clients to find and hire the best talent for the longer term.
Designing a staffing system
When designing a staffing system that will allow growing enterprises to find the best talent, an RPO follows several steps:
Getting to know the business. The RPO looks at the many things that make the business what it is, including products and services; distribution and sales models; work processes; employees; competitors; history; and enterprise goals. The RPO also considers the kinds of talent, energy and traits it takes to succeed in the business; the positions, skills, abilities and characteristics of successful contributors; how jobs are assessed and ranked in the organization (to ascertain, for example, if job families make sense); and career paths and succession plans.
The expert also will consider the organization’s direct and indirect compensation system for executives, management and staff, and whether it’s competitive. This will help the RPO assess whether the company is considered an “employer of choice” or if improvements need to be made in that area. Next, the RPO will ensure that the company has clear job specifications that include position purposes, responsibilities, requirements and desirable qualifications.
Developing a strategy to attract talent. Once the RPO understands the business’s needs, it designs a campaign to fulfill immediate and long-term hiring needs. An RPO might, for example, help a company design cost-effective ads and advise it on where, when and how to advertise. A good RPO also should be capable of proactively pursuing passive candidates through industry contacts, data mining and contacting competitors.
Implementing standardized processes and tools. The RPO helps the client understand why it’s important to be consistent in their use and application of assessment tools when pursuing new hires. When performing phone screens on candidates whose resumes represent them as being qualified, it makes good sense to draft a standard list of questions and ask the same ones of every candidate.
Online tests and assessments might be administered to potential hires who make it past the phone screen stage. These tools might assess an individual’s basic abilities and personality to ensure he or she has the requisite skills and is a good fit for the position. Assessments can help reveal the potential hires’ strengths and weaknesses and how they might fit with those of the existing team.
Advising on the best interview strategies. An RPO will help a company draw up basic employability queries and customize the list to include the most important position requirements and responsibilities. In addition to advising on interview Dos and Don’ts, the RPO will suggest ways to remain competitive during the process and retain candidate interest in the position. They also will suggest ways to reduce the time invested in the interview process. For example, the company might use interview teams.
Standardized interview worksheets that are customized to match the position’s responsibilities and requirements can further aid the interview process. These tools enable interviewers to “score” each interviewee during the interview and record impressions at its conclusion. Interview worksheets also can serve as a great discussion tool when making final selection decisions.
Making and negotiating offers
The offer and negotiation stage is when the hiring process most often falls apart. Those involved in interviewing and selection can be too close to the situation. They may be drained emotionally from multiple interviews and stressed by the time taken from their busy schedules. Or they may be reluctant to pay what the last incumbent employee was paid.
It helps to have the necessary market data, but objectivity, and experience in compensation offer development and negotiations also are advisable. In these matters, RPO expertise is well worth the investment.
As with HRO solutions, RPO services often are customized to provide just what the client needs and when and where it needs it. RPOs further can offer employers access to the most current, legally compliant ancillary materials such as EEO reporting tools, noncompete/confidentiality agreements, reference checking, drug screening and background investigations.
The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.
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