Not sure recruitment process outsourcing (RPO) is for you? Think your organisation is too small for RPO? Think outsourcing doesn’t fit your company culture?
Think again.
Our complete six-piece toolkit gives talent acquisition leaders the essential information on how RPO can boost their recruitment outcomes.
In this toolkit, you’ll get:
Our comprehensive buyer’s guide for RPO—everything you need to know
A guide for building a business case for RPO (including a free template!)
Conversation starters to help you create buy-in for RPO at your organisation
Learn how RPO can unlock the full potential of your talent strategy. Download your kit now.
Recruitment Process Outsourcing (RPO) Buyer’s Guide
In this challenging landscape, talent acquisition leaders are increasingly turning to recruitment process outsourcing (RPO) to gain the flexibility, scalability and agility they need to hire the best talent.
So, how do you know if outsourcing to an RPO partner is right for you? Our RPO Buyer’s Guide provides an in-depth exploration of RPO and how it can help you achieve your recruitment goals.
In this ebook, you’ll learn:
What RPO is and the benefits it can bring to your business
Whether RPO is right for you and the benefits of selecting an RPO partner
What to expect at each stage of your RPO partnership
With labour shortages and intensifying talent scarcity, hiring challenges are only increasing, impacting all industries. To tackle these hiring difficulties, many leaders look to external solutions like expanding their talent pool or enhancing their employer brand. However, one of the most effective and sustainable solutions is already inside your organisation. Developing existing employees through internal mobility is key to filling skills gaps now and in the future.
Keep reading to learn more about internal mobility, why internal mobility programs are crucial for future success and how you can leverage reskilling and upskilling programs to facilitate internal mobility at your organisation.
What is Internal Mobility?
The goal of internal mobility is to match your existing talent to open positions through internal transfers, job rotations, secondments and promotions. An internal mobility program is a structured process that facilitates the movement of employees, both vertically to higher or lower positions as well as laterally between roles at the same level. These programs are often anchored in reskilling and upskilling initiatives focused on developing employees’ skills and capabilities to meet evolving organisational needs.
Reskilling programs aim to provide training to help employees gain new skills that allow them to transition into different roles or business areas. For example, a finance employee can reskill to learn data analytics and move into a business intelligence role.
Upskilling programs focus on building additional skills and competencies related to an employee’s current role or expanding their knowledge in their field. For example, a marketing manager can upskill their digital marketing capabilities in social media and digital advertising platforms to take on a more strategic role in the department.
The Benefits of Internal Mobility
A strategic focus on internal mobility provides both talent management and bottom-line benefits for an organisation, including:
Improved employee retention and engagement: Providing clear paths for career development and advancement within the company increases employee satisfaction and loyalty. Employees feel valued and motivated when they see opportunity for upward or lateral mobility.
Stronger talent pipeline: An internal mobility program creates a robust pipeline of qualified candidates for open roles from within. According to research from LinkedIn, organisations that leverage skills-first hiring expand their talent pool by nearly 10x on average compared to those simply looking for similar job titles or industry experience.
Cost savings: It is typically more cost effective to fill a position internally rather than externally recruit, onboard and train new hires. Internal mobility is a strategic talent management approach.
Improved performance: Internal candidates have organisational and cultural knowledge, so they are often able to transition and ramp up faster in new roles. Data from Spotted Zebra shows that internal movers reach competence 20% faster than external hires and are twice as likely to be rated as top performers in their role.
Improved diversity: Internal mobility provides opportunities for improved representation and diversity in leadership by developing and advancing talent from within.
Agility and flexibility: Having an internal bench of qualified candidates enables organisational agility to swiftly mobilise talent to meet emerging needs.
The Lack of Investment in Internal Mobility Programs
Despite the benefits, internal mobility is not being prioritised by most HR leaders. Given the challenges recruiting skilled talent, we expected to see internal mobility as HR leaders’ default strategy to tackle skills shortages. However, through our research report, The Skills Crisis Countdown, we found that nearly a third (30%) of HR leaders admitted they simply do not view reskilling and upskilling as a priority and only 37% of organisations have formal reskilling and upskilling programs in place. Even in areas of high priority like technology advancement, there appears to be a lack of focus on mobility and development. When we asked HR leaders about how they’re preparing their workforce for the implementation of new technologies, only a fifth (20%) said they’re investing in upskilling initiatives to enhance current employee technological skillsets.
The lack of skills development is echoed by employees. A quarter of employees report their employer has not been offered opportunities to upskill or reskill. A third (34%) of workers have doubts about how their skills will keep pace with new technology and automation. With transformations on the horizon for many roles due to technological advancements, ensuring employees’ skills evolve along with their jobs is essential for organisations.
The Key to Internal Mobility: Reskilling and Upskilling
Ongoing reskilling and upskilling of employees is crucial to enabling effective internal mobility. As business needs evolve and new technologies emerge, employees’ skills and competencies must also progress to keep pace. Providing internal development opportunities allows employees to gain the updated capabilities required for critical roles, increasing their eligibility and readiness to transition into new positions. By making learning core to the culture, reskilling and upskilling initiatives ensure organisations can source top talent from within.
Implementing Successful Upskilling
For your upskilling programs, you need an accurate understanding of your employees’ current skills and future needs. Our research showed most HR leaders rely on subjective manager feedback rather than taking a data-driven approach.
To get ahead of emerging skills gaps, perform a skills audit and compare that to how your existing roles will evolve in the coming years. Identify both the competencies your employees need to be effective in their roles as they develop into the future and any deficiencies they have now.
Once you understand the lay of the land, you can develop continuous upskilling initiatives to grow your employees’ high-value skills over time in alignment with technological advancements. Proactively upskilling employees will keep your workforce on the cutting edge of skill set transformations.
Implementing Successful Reskilling
Reskilling programs also require an understanding of the existing capabilities of your workforce and the required competencies for emerging roles. This allows you to accurately match employees to opportunities they can transition into successfully.
Rather than relying on subjective manager interviews, utilise skills-based assessments. This provides data-driven insights into employees’ technical aptitudes and behavioural strengths. You can then align these skill profiles with the requirements of your new roles.
For example, PeopleScout partnered with a global financial services company to take a skills-based approach for a major digital transformation initiative. By identifying the best candidates for reskilling, we helped employees move from declining customer service roles into new tech-focused positions, saving the company £2.5 million in exit costs and reduced training dropouts dramatically. The company gained the critical future-focused skills it required while providing career growth opportunities to its valuable existing employees.
Internal Mobility & RPO: Your Partner in Sustainable Workforce Planning
Over half (56%) of HR leaders report resistance to change within their organisation when faced with the prospect of what they mistakenly believe can only be a huge, C-suite-led project that spans the entire talent lifecycle. However, as a leading RPO partner PeopleScout is perfectly positioned to provide the strategies and technology to embed and scale a skills-based approach.
By leveraging an RPO provider’s expertise and resources, organisations can maximise the return on investment in internal mobility initiatives. According to Everest Group, over half of RPO engagements include some element of internal mobility. The RPO acts as a strategic talent advisor focused on improving talent mobility with strategies like:
Skills gap analysis: An RPO provider can perform a skills audit to assess current capabilities versus required future skills and identify reskilling needs to inform development programs. They can also provide market intelligence to help you understand the skills available within your talent markets as well as salary requirements so you can make informed decisions.
Internal candidate sourcing: Your RPO partner can source and screen internal candidates for open roles to identify top talent for mobility opportunities.
Career mapping: RPO experts can map career paths, succession plans and competency requirements for critical roles to guide internal development.
Development program design: An RPO provider can help design and implement reskilling, upskilling, job rotation and mentoring programs to build enterprise talent. Plus, they can administer and manage the end-to-end internal mobility program from sourcing to placement as well as provide project management.
Change management: RPOs can provide guidance on change management strategies to gain buy-in and promote a culture of internal mobility. Plus, they’ll provide data, analytics and reporting on program effectiveness and opportunities to fine-tune strategies.
Technology consultation and implementation: RPOs can recommend and implement skills management platforms and talent mobility platforms to enable seamless movement and track program metrics.
Filling your organisation’s talent gaps begins with the workforce already inside it. But this untapped talent potential can only be leveraged through strategic, skills-based internal mobility programs. Your existing workforce could provide the talent solution you’ve been searching for. By partnering with an RPO on reskilling and upskilling initiatives, you gain strategic expertise to build a future-ready, skilled workforce.
Skills in the workplace are evolving faster than ever thanks to advances in AI, the greening of the economy and shifting demographics. But, our latest research, The Skills Crisis Countdown, shows that HR leaders seem oblivious to the urgency of the coming change.
Nine out of 10 of HR pros surveyed said up to half of their workforce will need new skills within the next five years. Yet, only 7% are actively investing in reskilling programs right now, and 45% admit they have no plans underway to prepare their people for the shifting skills landscape.
Our data quantifies the massive disconnect between awareness of looming skills gaps and action being taken to reskill workers. Check out the infographic below to see the stats and get ahead of the curve on developing a future-ready workforce.
me companies see their RPO provider as only a vendor, but taking a partnership mindset creates a more satisfying, successful working relationship. Working well together as a united front always makes for an easier, smoother rollout with a new RPO programme.
The implementation and transition phases before and after a rollout are crucial, as this is when you set the tone and expectations for all involved. It’s also when certain issues need to be addressed and configured.
Recruitment process outsourcing (RPO) has evolved significantly over the past few years. Here are some key areas talent acquisition leaders should focus on when implementing a new RPO programme:
1. Identify Key Players Early in the Process
During the transition, one of the most important steps is to establish one key champion within your business. This person is your internal point of contact for RPO with the power to get things. There’s often a lengthy checklist of tasks that need to be completed before a rollout. The appointed decision-maker must be able to use their influence with HR, legal, IT and other stakeholders, including hiring managers and vice presidents, to get things accomplished.
Conversely, your RPO partner should also provide a primary point of contact who will work closely with you to navigate the implementation process. Effective communicate with your RPO contact will keep things moving forward.
Also, be sure to let your RPO team know who your internal stakeholders are (especially any unofficial ones) and how they may influence the implementation and rollout process. Loop your RPO team into conference calls and meetings so they can get a feel for the issues at hand and start building trust with stakeholders.
2. Clarify Expectations and Goals for Your RPO Programme
At the beginning of your toll out, have an open discussion with your RPO provider about what success looks like for your organisation today and going into the future. It may be helpful to hold a workshop to specifically determine what stakeholders want out of the RPO programme and how those goals can be measured.
Define clear, measurable goals aligned to business objectives like time-to-fill, candidate quality, requisition volume, diversity and more. Both you and your RPO team must work toward, and measure against, the same goals.
If historical data on key performance indicators (KPIs) is available, now is the time to provide it to your RPO contacts so they can use the data to set a baseline for future measurements. But if this isn’t available your RPO partner should be able to help you benchmark against other organisations.
This cannot be overstated: communication is essential to establishing a strong working partnership with your RPO provider. The more you communicate, the better your RPO team can serve you. The RPO team should ask your stakeholders about their experience, what they want to achieve with the new engagement and what potential obstacles the team might encounter.
It’s important to be open about what is happening in the company. If something is working against the RPO process, let the team know so they can work around it. For example, if you’re not documenting things in your ATS or if HR is performing tasks expected of the hiring managers, don’t hide it. It may not be the best practice, but if it works, and everyone is aware, that’s what matters.
Remember, RPO providers can only advise you on best practices; ultimately, they are there to serve your needs. Communicate openly, and your RPO team can make the decisions that will ensure you have a positive experience. The more collaborative the partnership is, the smoother the transition will be.
4. Invest in Change Management
A typical implementation for an enterprise, full-cycle RPO engagement is 30-60 days, with a 90-day transition period afterward. Modular RPO engagements will have much shorter timelines. No matter what RPO solution you choose, map your timelines out before beginning implementation, and stick to the timetable and deliverables. However, realise that you get just one chance to roll the process out well. Thus, you should keep your rollout date flexible enough to get the process right.
It’s also useful to set within your organization the expectation that the first 90 days of a new RPO programme are a learning curve for all involved. Proactively manage change by clearly communicating process changes, providing training if needed, and getting buy-in from hiring managers and other stakeholders.
5. Identify Challenges in Your RPO Programme Upfront
Don’t assume that your RPO provider knows what the potential hurdles to adoption will be at your organisation. Talk about your concerns and what you see as risks. For example, if a division has historically been run by a person with a negative view of recruitment who will likely go directly to a staffing agency or circumvent the process, share this with your RPO partner.
Together, make contingency plans to address how such situations will be handled, and categorise risks by the level of fallout that may occur. Be sure to discuss what kinds of issues are considered common mistakes and what kinds of things absolutely cannot be allowed.
6. Build an Agile, Tech-Enabled RPO Programme
Be prepared to work in an agile way, continuously optimising processes and innovating together. You should work collaboratively with your RPO partner to take full advantage of the latest recruiting technologies like AI-enabled sourcing, virtual interviews, chatbots, and more. Remain flexible and adapt to changing business needs and market conditions quickly.
Technology and automation enable your RPO provider to scale talent acquisition strategically to help you remain flexible and adapt to changing business needs and market conditions quickly. Technology can create a better candidate experience, facilitate better collaboration between recruiters and hiring managers, and equip you with better analytics so you can measure ROI.
RPO has evolved into a more strategic, technology-enabled partnership. By focusing on these key areas, talent acquisition leaders can ensure their RPO programme will deliver great talent and business impact in today’s world. Taking the time to communicate and build relationships with your RPO partner can make a huge difference in ensuring a smooth and successful rollout.
Amidst the most turbulent labour market in recent memory, talent acquisition leaders and procurement professionals alike are turning to partners for creative, agile and adaptable solutions for their current and future talent challenges. Because recruiting touches the whole organisation, stakeholders across the business will have opinions on the benefits and drawbacks of recruitment process outsourcing (RPO) as well as unique ideas about the best approach. The process to secure buy-in and budget doesn’t have to be difficult. By having a few conversations with the right people in your organisation and gathering some information around current recruitment processes and costs, you can present a solid business case for RPO to your leadership team and create a path forward to an effective and resilient talent acquisition program.
In this article, we’ll arm you with the information you need to speak to different stakeholders, calculate costs and present your business case for RPO. Plus, we’ve included a free template to help you get started.
What is RPO?
First things first—what is recruitment process outsourcing? Recruitment process outsourcing, abbreviated as RPO, is a type of business process outsourcing in which an employer transfers some or all portions of the recruitment process to an external service provider. These facets may include job postings, sourcing, screening, assessments, offer management, background verifications, some onboarding elements and more.
RPO can support hiring for high volume or niche professional roles and often involves technology and talent advisory consulting—including employer branding. An RPO provider embodies the best of your culture, employer brand and values in all the activities they perform on your organisation’s behalf, while integrating with your systems, processes and people. Plus, your RPO team brings new ideas, innovation and expertise to bolster your talent strategy and plans. They may sit on-site, work remotely, work offshore or a combination, and they typically take on your company name and email domain as an extension of your organisation.
RPO can be leveraged to augment existing in-house recruitment teams and can complement your current recruitment program by taking over recruiting for specific job groups, locations or business units. Moreover, across your enterprise, you can leverage different RPO models to maximise the benefits.
When evaluating whether RPO is right for your organisation, it’s important to determine which RPO blueprint is the right one. As you speak to stakeholders, one key challenge you may run into is that stakeholders have different views on what you mean by RPO. In your business case presentation, you’ll want to compare different models—and clearly define them—in order to help the decision-making process.
Benefits of RPO
RPO engagements are not only about outsourcing your recruiting but also about finding the best partner to help manage the people, process, technology and strategy of your talent acquisition function. There is no single best option, only the option that best aligns with your organisational needs.
You should focus on finding the solution that provides the most value for your investment. RPO will create benefits that will be felt across your organisation in terms of both cost and operational efficiencies.
Cost Benefits of RPO
Whether through direct or indirect cost savings, RPO can provide advantages that impact your bottom line. As you prepare your business case for RPO, here are some cost benefits to keep in mind:
Reduced Time-to-Fill: The longer a position goes unfilled, the more likely your business is to experience productivity loss—and loss of revenue. RPO teams find candidates and fill roles faster through talent pipelining.
Lower Cost-per-Hire: RPO offers cost efficiencies by shortening hiring timelines and improving the quality of your talent, while also lowering recruitment marketing spend. By streamlining and optimising recruitment processes, improving time-to-hire and retention rates, RPO increases your return on investment and delivers savings to your bottom line.
Reduced Agency Spend: A huge benefit of RPO is the reduced reliance on disparate third-party staffing agencies. By consolidating recruitment under a single partnership, you reduce agency usage and make your recruitment costs more predictable.
In addition to the cost benefits of RPO, there are operational benefits that can be felt across your business, including:
Elevated Role for HR: Leading RPO providers can provide labour market insights, talent intelligence and benchmarking data. With access to these insights, you have the data you need to support your workforce strategy as well as tactical business decisions. You can capitalise on the latest market analysis, thought leadership and competitive intelligence to inform your talent strategy. Your RPO partner can provide analytics to help you understand what’s working so you can maximise your ROI. Your RPO partner should also be able to give insights into how your organisation is perceived as well as tactical steps to fundamentally change perceptions through your employer value proposition (EVP) and employer brand and even recruitment marketing and media purchasing services.
Improved Candidate Quality: As skills gaps and talent scarcity becomes more challenging, having an RPO team digging into passive sourcing to access niche skills sets will expand your talent pool and improve quality-of-hire. RPO providers leverage their comprehensive talent networks and effective screening and assessment tools to produce stronger candidates and more diverse talent pools.
Better Candidate Experience: You want your recruitment process to leave every applicant, regardless of whether they get the job, with a positive experience. Your RPO partner can advise on ways to improve the candidate experience including career site audits, job application recommendations and how to leverage technology to speed up the process and reduce friction.
Improved Hiring Manager Experience: Your RPO team reduces the administrative burden on your hiring managers by taking over résumé and CV screening, assessment administration, interview scheduling, candidate communication and feedback tasks. RPO teams prepare hiring managers for interviews, provide them with feedback and identify any candidates at risk of dropping from the process so managers can make informed decisions.
Diversity, Equity and Inclusion: Through experience collected over many client engagements, RPO teams are knowledgeable about enhancing your employer brand for wider audiences and expanding your talent attraction efforts to new job boards, social media groups, online forums and events to target more diverse candidates.
3 Steps to Building Your Business Case for RPO
RPO solutions are designed to provide transformative recruitment strategies that are flexible enough to help you achieve competitive advantage at a predictable cost. Let’s explore the steps you can take to gather the information you need for your business case.
1. Engage Internal Stakeholders
Before embarking on your business case, it’s essential to engage the right stakeholders from the beginning. Human resources (HR), procurement, hiring managers and the C-suite will all have different pain points, desires and recruitment costs impacting their budgets. Their support will be crucial for not only securing resources but for the overall success of the RPO program.
By understanding what each stakeholder cares about, you can show how RPO can provide the solution for their challenges. Plus, once you’ve secured budget and selected an RPO provider, these stakeholders will be more open to change to make your RPO program successful.
The goal in this step is to be able to define current pain points and desired future outcomes so you can address these issues through an RPO solution.
Here are 10 questions you can use as conversation starters to uncover your organisation’s biggest challenges:
Do we have the talent we need to achieve business goals now and into the future?
Are we attracting quality talent with the right mix of skills, experience and cultural fit?
How are we doing with our diversity, equity and inclusion (DE&I) goals? Are we attracting and hiring underrepresented candidates?
Is our talent acquisition program able to respond quickly to changes in the market (i.e., easily and quickly scale up or down)?
Are we providing an excellent candidate experience consistently?
Are hiring managers getting the support they need to fill their vacancies?
What recruitment technology are we currently using, and is it sufficient for our needs going forward?
Do we have the data and insights we need to do effective workforce planning?
How much are we spending annually on talent acquisition? Are we getting the best value for money?
What are the differences in recruitment strategies between different countries or regions?
2. Assess Your Current Recruitment Landscape
As part of your engagement with stakeholders, it’s important to understand the current lay of the land when it comes to your talent acquisition program. You’ve got to know where you’re starting from in order to improve it.
This may seem like a straightforward question if your company has one in-house recruitment team. However, things get more complicated when there are separate in-house teams sitting in different regions who are using different processes or different local third-party agencies. Worse yet, individual departments and hiring managers may be handling their own recruitment. Ask around and get it all down on paper.
Metrics to help measure your recruitment process:
Applicant-to-hire ratio
Interview-to-offer ratio
Time-to-hire and time-to-fill
Time-in-stage or hiring velocity
Offer acceptance rate
Cost-per-vacancy
Sourcing & Attraction
Who sources candidates for your organisation? What channels are you using to get in front of candidates? Are you attracting lots of active candidates, or are recruiters having to engage mostly passive candidates? What are the average costs associated with attracting active candidates versus sourcing passive candidates?
What are you doing to attract candidates to your job ads? Who manages this budget? Are you using any suppliers like creative agencies or advertising platforms (e.g., LinkedIn, Indeed, industry publications, etc.)? How are these channels performing?
Screenings, Interviews & Assessments
Beyond sourcing candidates, who reviews résumés and CVs? Who manages the interview process? How many interview or assessment steps are currently required for each role type?
Are there any delays or bottlenecks that are contributing to longer hiring cycles, poor candidate experiences or increased candidate drop-off rates?
What role is technology playing at each stage? Is there opportunity to build more automation into your processes?
Offers & Negotiation
Once you get to an offer stage, who signs off on offers? What is your offer acceptance rate? If it’s lower than you’d like, is there something about the candidate experience that’s turning them off?
Are you leveraging candidate surveys? What is your candidate Net Promoter Score (NPS)? What are your ratings on review sites like Glassdoor?
It’s also worth looking at attrition and tenure metrics to identify any issues causing new hires to leave soon after joining.
Uncovering this information will help you understand your gaps and opportunities. An RPO provider will be able to develop customised solutions to address your unique challenges.
3. Calculating the Cost of Talent Acquisition
Now that you understand what goes into your recruitment efforts, you can assess how much the overall talent acquisition program will cost to run. It’s preferrable to understand how your staffing spend has changed over the last three to five years.
Unfortunately, this isn’t as simple as asking HR for their budget details. You’ll want to incorporate both direct and indirect costs when assessing your talent acquisition program costs. Let’s break this down.
Understanding Direct Costs with Cost-per-Hire
A great place to start to understand your direct costs is with your cost-per-hire (CPH). This is the average cost you incur to hire a new employee. This includes total internal expenditures and external expenditures divided by your total number of new hires. You can calculate cost-per-hire using a monthly or annual measurement period.
Internal costs include things like:
In-house recruiter salaries
Training costs for recruiters or hiring managers
Salary costs of time invested by hiring manager and other employees
Employee referral awards
External costs are any expenses incurred from external vendors, like:
External agency fees
Recruitment marketing and advertising costs
Assessment costs
Fees from drug tests and background checks
Technology costs
Hiring event and career fair spend
Candidate travel and lodging
Relocation expenses
Visa expenses
Signing bonuses
It may be useful to look into the differences in CPH for each job function, experience level, candidate source, geography and labour market. This may mean doing several calculations to capture these categories.
Keep in mind, cost-per-hire doesn’t capture quality of hire or take into account the costs of making a bad hire. If your cost-per-hire is low, but your new hires are leaving quickly or don’t pass their probationary period, is that really an advantage? On the flip side, a high cost-per-hire that brings in new employees that are engaged, productive and invested in your organisation is worth the expenditure. Ultimately, your talent acquisition program shouldn’t focus solely on cost but should concentrate on creating more value for the business.
Sussing Out Indirect Recruitment Costs
There are also indirect costs around recruitment that can be more difficult to measure and present in hard numbers. These could include:
Loss of productivity due to vacancy
Cost of overtime to cover vacancies
Impact on employee morale
Customer churn
Knowledge loss from turnover (and subsequent training costs)
Reputational damage from bad candidate experiences
Presenting Your Business Case for RPO
Now that you’ve gotten to the bottom of your current recruitment efforts and the associated costs, you can present the business case for the RPO models that will address your challenges. Don’t be afraid to reach out to RPO providers for help with this step. By providing them with the information you gathered in the previous steps, they can provide a breakdown of the services they offer and how they could address your unique needs.
How you go about putting your business case on paper will depend on your organisational requirements and personal preference. We recommend getting everything onto one page. This gives C-suite leadership an easy-to-digest snapshot of your recommendations. While there is often a need to present high-level decisions in hard financial terms (e.g., ROI, NPV, IRR), presenting the business case simply will also help garner expert support to create any detailed financial assessment needed. You can always link to additional documentation to back-up your presentation (e.g., a flow chart of the current hiring steps, a SWOT analysis, etc.).
Your business case one-pager should consist of the following:
Options: These are the solutions you’ve identified as best at addressing the pain points you uncovered in your conversations with stakeholders. Keep in mind that staying as-is is always a viable option. It’s also essential both to include your current situation as a contrast to the new RPO models and ensure each option is adequately described (for example, in supporting documents) so decision makers understand what is being compared.
Benefits and Drawbacks: These are the positives and negatives you could gain with each option. These should be aligned to the pain points identified by your stakeholders. The risk section (see number 4 below) is the place to capture any uncertainties about the expected benefits. Cash and non-cashable savings can be highlighted here, though most should be covered in the Costs section below.
Costs: This should be both the direct (monetary) costs as well as indirect costs (like investments of time) and should be profiled to cover the whole life of each option (i.e., implementation, operation, close). A leading RPO provider should offer consultation that will help you complete this section.
Risks and Opportunities: By showing the risks for each option, you give leadership the confidence that you’ve explored all the issues when coming to these conclusions. It also helps everyone make more informed decisions. Risks and opportunities are not guaranteed to happen, and in all cases should be evaluated both by likelihood and by impact. They are entirely future focused, so if you have a current issue, it should be listed as a drawback (see above).
Assumptions: Explaining any assumptions you’ve made while preparing this document, helps you acknowledge any possibilities that might impact recruitment plans but that are out of your control or that could change in the future. For example, you could document current plans around mergers and acquisitions or geographical expansion. If there’s anything you want to exclude from the scope of your RPO engagement, you’ll want to document this here too.
On the next page we’ve included an example of a business case for RPO created for a client who was hoping to move away from a combination of in-house recruiters and staffing agencies to an RPO solution.
Going through the steps we’ve detailed in this guide will arm you with everything you need to prove that an RPO partner will create measurable value for your organisation. Presenting a winning business case for RPO—that depicts the process and cost efficiencies in an easily digestible document—will help you to secure budget and buy-in and put you well on your way to achieving talent advantage.
By Simon Wright, Global Head of Talent Advisory Consulting
The workforce skills landscape is transforming at blinding speed. Automation, AI, sustainability initiatives, demographic shifts—global forces are conspiring to make skills gaps and talent shortages more acute by the day. Don’t think it’s moving that fast? Well, the World Economic Forum predicts that a jaw-dropping 85 million jobs could sit vacant by 2030, resulting in $8.5 trillion in lost revenue.
The very meaning of “skills” is shifting beneath our feet. Skills requirements have already changed 25% since 2015, and experts forecast 65% more change by 2030. However, companies still rely heavily on degrees and experience over skills when it comes to making hiring decisions. No wonder we’re careening towards a global skills crisis.
PeopleScout partnered with skills-based workforce management platform provider Spotted Zebra to survey over 100 senior HR and talent acquisition leaders globally, plus over 2,000 employees worldwide, to compare perspectives. Our new research report, The Skills Crisis Countdown, maps the skills landscape and diagnoses the disconnects between employers and their workforce.
Read on for some key findings from our report.
HR Leaders are Ill-Prepared for the Skills Crisis
According to a study by PwC, 40% of global CEOs believe their business will be economically unviable in 10 years unless they reinvent for the future. Our study revealed that nine out of 10 HR leaders believe that up to 50% of their workforce will require new skills to effectively perform their job in the next five years. Yet, when asked if they are currently undergoing or planning a workforce transformation initiative in the next three years, nearly half (45%) of HR leaders admit to having no plans to undertake one.
So, in other words, half of employees will soon be underprepared for the future, but most companies have no strategy in place to address the issue.
According to LinkedIn, 84% of members are in occupations that could have at least one quarter of their core skills affected by generative AI (GAI) technologies, like ChatGPT. So, how are HR leaders preparing for this digital transformation and the AI era? Shockingly, a full third (34%) say they have no preparations in place to prepare for new technologies. Those who are preparing emphasise bringing in outside talent rather than reskilling existing employees.
Industry Composition by GAI Segment Percentage of LinkedIn Members by Industry
(Source: LinkedIn Economic Graph Research Institute)
This is likely because they lack an understanding of the skills they have within their existing workforce. Our data revealed that 68% of organisations identify skills from manager feedback, which is highly subjective. So, it’s no surprise that 56% of employees think their skills are underutilised in their current roles, and 61% think there are other roles in their organisation where their skills could be utilised.
An unprecedented skills revolution is barrelling down the tracks, but companies are fast asleep at the switch. It’s time to wake up and get employees future-ready or risk a global skills crisis and talent scarcity for decades to come.
Digital & Tech Skills Gaps are Widening but Tech Skills are Viewed as Unimportant
Both employers and employees dangerously underestimate the importance of tech and digital skills. In our survey, both parties listed tech and digital literacy skills with low importance. With the skyrocketing demand for tech and digital talent, this does not bode well.
Mobile apps, ecommerce and digital transformation have made technology integral to every corporate strategy. However, supply isn’t keeping up with demand. McKinsey analysed 3.5 million job postings in high-tech fields and found there’s a wide divide between the demand for tech and digital skills and the qualified talent availability. The most sought-after skills have less than half as many qualified professionals per posting compared to average global figures.
No wonder 63% of HR leaders in our survey admit they struggle to recruit the skills they need. Closing tech and digital skills gaps through recruitment alone is no longer sufficient. So, we were concerned when our research showed that 73% of the workforce haven’t been offered opportunities to reskill.
Organisations must invest in helping their employees evolve their skills via reskilling and internal mobility to cultivate digital and tech literacy across their entire workforce.
Case Study: Reskilling in Action
The Challenge:
A large global financial services company needed to undertake a major digital transformation program. The organisation needed to acquire key digital and tech skills while leveraging the existing company knowledge of employees in declining customer service roles by reskilling them.
Previous efforts by the organisation to assess employees’ suitability for reskilling were led internally and included multiple, time-consuming line manager interviews. Of even greater concern, around a quarter of those who began the reskilling program dropped out.
The Solution:
The bank worked with their long-time RPO partner, PeopleScout, and Spotted Zebra to assess customer service staff in bank branches and call centres to find ideal candidates for its tech and digital skilling program. Skills profiles were created for tech roles, which employees were assessed against to find the best fit.
The Results:
Redeployed 150 people, saving over $2.5M in exit costs
Saved over $350,000 in training and development costs
Reduced time investment by hiring managers
Reduced the reskilling cost-per-person by 70%
Employees Don’t Feel Confident in their Skills for the Future
A third (34%) of workers have doubts about how their skills will keep pace with new technology and automation. Meanwhile, just 17% of organisations are offering targeted reskilling programs for existing employees.
Where are HR Leaders Deploying Skills-Based Practices?
(Source: PeopleScout and Spotted Zebra)
This imbalance spells disaster. As change overwhelms existing skill sets, most workers will begin to feel unsure of their career paths or left struggling to stay relevant.
Investing in reskilling makes solid business sense. We must bridge the gap between workers anxiously facing uncertainty and leaders failing to invest in their resilience. HR leaders who empower their workforce with adaptable skill sets today will drive continued success in times of swift and sweeping change.
Finding a Talent Partner to Support Your Skills Transformation
The agility to match emerging skill requirements will soon become a competitive necessity. If you haven’t started your skills-based transformation, now is the time.
In our survey, one in two HR leaders admitted to a lack of understanding of skills-based practices. If you’re struggling to understand how to take advantage of skills-based practices in your organisation, PeopleScout is here to be your guide.
As a recruitment process outsourcing (RPO) partner, we can help you understand the skills within your existing workforce as well as the external market supply and demand. We offer solutions across the skills agenda, from skills-based talent intelligence and market insights, building skills frameworks, and creating skills-based success profiles to redesigning recruitment processes, skills-based hiring strategies, and helping you maximise the potential of your existing workforce.
To learn more about PeopleScout’s skills-focused talent solutions, get in touch.
[Webinar On-Demand] The Ticking Talent Clock: Is Time Running Out to Address the Skills Crisis?
With the rapid advancement of AI, accelerated digitalisation and the greening of the economy, businesses are grappling with the changing nature of work—how we work and the types of jobs we do. In fact, a new research report from PeopleScout and Spotted Zebra, The Skills Crisis Countdown, reveals that nine in 10 HR leaders believe that up to half of their workforce will need new skills to perform their jobs in the next five years. Yet, only less than one in 10 say they are actively investing in reskilling programs.
Are HR leaders running out of time?
Join PeopleScout’s Global Head of Talent Consulting Simon Wright and Spotted Zebra’s Chief Customer Officer Nick Shaw as they delve into the key findings from the research, lay bare the skills crisis and show why the clock is ticking for HR leaders.
In the webinar, Simon and Nick cover:
How organisations are addressing the mismatch in skills demand and supply
The current state of skills utilisation, skills-based hiring and the need to expand talent pools
Strategies for improving talent mobility (including case studies and success stories)
Practical steps you can take to transition to a skills-focused model
The Skills Crisis Countdown: The Clock is Ticking on Tackling Skills Gaps
Our latest research reveals, nine in 10 HR leaders believe that up to 50% of their workforce will need new skills to perform their jobs in the next 5 years. Yet, only 7% say they are actively investing in reskilling programs, and 45% admit to having no plans to undertake a workforce transformation initiative to prepare for the changing skills landscape.
PeopleScout partnered with skills-based workforce management company Spotted Zebra to survey over 100 senior Human Resources and Talent Acquisition leaders from organisations around the global and 2,000+ employees globally to compare perspectives on workforce skills. The resulting research report, The Skills Crisis Countdown: The Clock is Ticking on Tackling Skills Gaps, provides a detailed picture of the current skills landscape and the disconnects between the perspectives of employees and businesses.
Download our free report for the latest research exploring:
The current state of skills in the global workforce and outlook for the future
How HR leaders are preparing for the impending skills crisis
How employees expect their skills will need to adapt to new technology or automation.
Plus, you’ll get a roadmap of actionable steps to help your organisation become more skills-centric.
Whether your organisation is looking to outsource some, most or all portions of your talent acquisition program, a recruitment process outsourcing (RPO) partner can help you.
So, how do you find an RPO partner? While there are plenty of roads you can take on your journey to finding the right RPO partner, the request for proposal (RFP) process is one of the most popular and effective methods.
In this article, we will outline the business case for RPO and guide you through the RPO RFP process to prepare your organisation before embarking on your hunt for an RPO partner.
Getting Started on Your RPO RFP Journey
The first step in your RFP journey should be envisioning your organisation’s ideal talent acquisition future. Then, ask yourself this question: How will outsourcing my talent program help reach this idealised future? The goal of this exercise is to get a clearer understanding of where your talent program is today, and where you want it to be in the coming years.
How an RPO Partner Can Help Improve Your Talent Program
Here are just three ways RPO can help you build and maintain a talent program that produces continued recruitment success.
Sourcing Hard to Find Talent: Skills gaps and talent scarcity have made sourcing talent an increasingly specialised field. An RPO partner can help proactively search for qualified candidates for current or planned job openings.
Talent Technology Support: Talent technology changes rapidly. It’s just about your applicant tracking system (ATS) or candidate relationship management (CRM) system anymore. AI, machine learning and recruitment marketing tools are evolving the recruitment tech stack. An RPO partner has experience working with multiple talent technology tools and can help you analyse and action your recruitment data. They may also provide proprietary talent technology, like we do at PeopleScout, that can complement your existing systems.
Recruitment Scalability and Flexibility: An organisation’s talent needs are rarely static; they often fluctuate due to internal and external factors like the economy or product development. An RPO partner can scale its recruitment teams to support your business strategy, without increasing your in-house talent acquisition headcount.
The next step in the RFP process for RPO is assessing organisational needs and outlining a definition of success for your talent acquisition outsourcing engagement. Establishing needs and goals prior to sending out an RFP to potential RPO partners provides you with an opportunity to build a consensus within your organisation, solidify key stakeholder support and give you something to go back to after an engagement is completed.
Your needs analysis will also help you avoid being swept away by grand vendor presentations and make your decision much more objective and aligned with your defined organisational needs.
As an example, imagine you are looking to procure a new talent technology platform. Your needs assessment process would begin with a discussion about what you would gain through adopting a new platform. In this case, you may look at your organisation’s overall competencies regarding talent technology such as:
Do
you have internal resources dedicated to talent data expertise and stewardship
in managing candidate data?
Do
you have a need for enhanced digital recruitment marketing capabilities?
Will
you need to integrate your current internal technology systems and dashboards
with a new platform?
Are
you in need of strategic consulting and advice bundled in with the platform or
do you have internal resources who can learn and manage a new system?
Your goals
in this situation may include:
Enterprise-wide
adoption of new talent technology
Improve
talent metrics reporting and applicant tracking
Automation
of the sourcing process
Improve
time-to-hire
Improve
candidate engagement and communication
Your needs assessment questions and goals will outline how you structure your official RFP, so be sure to plan them in detail. Your needs assessment will pay off before the first vendor responses, as your RFP will have a better representation of what you are looking for from outsourcing.
RPO Partner Relationships: Defining Your Stakeholders
Your needs assessment can’t be done in a silo. Deploying a successful RPO solution requires more than a relationship between hiring managers and the RPO partner’s recruitment team. The internal relationships between the drivers of the RPO engagement and other stakeholders at your organisation will affect the success of your RPO partnership.
To create buy-in for RPO, it is essential to involve the right stakeholders from the beginning. To make sure the process runs smoothly, you should develop a plan that formalises how each stakeholder will be involved in making the RPO RFP process a success.
When
determining the stakeholders, you typically include:
After assembling your team, bring everyone together to establish a timeline for the RFP process. The timeline should align with your organisation’s goals and deliverables for the project—including when you want the solution implemented by.
Key items on your timeline include:
RFP launch date
Due date for questions from vendors
The date answers will be provided by your
team
Due date of the RFP
Announcement of finalists
Date of finalist presentations
Final award
Your RFP timeline should include not only the due date for proposals but also due dates of when a contract must be signed and when work should begin.
Developing Your RFP Document
Developing your RFP document should start with creating an outline. This outline can be as detailed as you want to make it. At a minimum, you should make a structured list of the sections you want to include in the final RFP, as well as the order in which they will be presented. Your procurement stakeholder will be an invaluable resource at this stage.
If you and your team conducted a needs
assessment, gathered stakeholder input and have a timeline set, you have
already done the groundwork. If you skip these early steps, it can lead to a
lot more work in the end.
Finally, you need to edit the RFP document you and your team have created, as typos and misspelled words throughout the RFP look unprofessional. According to Tom Sant, CEO of The Sant Corp., which develops software for generating RFPs, typos in an RFP are one of four things that frustrate vendors. The other three are “RFPs that are disorganised, RFPs that ask redundant questions, and RFPs that have contradictory requirements,” Sant says.
The Bottom Line: Finding the Right RPO Partner
Finding the right RPO partner will help your organisation gain a competitive advantage in talent acquisition by providing industry-specific hiring expertise and increasing your recruiting bandwidth.
This is why constructing a thorough RFP that carefully addresses your organisation’s talent requirements and expectations of the engagement is a valuable weapon in the RPO selection process.
