Should you take RPO out for a test drive?
October 8, 2009
With recruiters and HR staff among the first to be laid off at the start of the current economic downturn, they are among the first employees who need to be rehired as the economy and the jobs market finally show some signs of coming back to life. In fact, those employers who have already resumed hiring or are planning to in the near future are starting to realize they don’t or won’t have the internal resources to get their recruiting operations up to the level they need to be in.
Moreover, the latest USA government figures show that while demand and global trade statistics are starting to recover, unemployment is still rising – jumping from 9.4% in July to 9.7% in August (the highest level in 26 years) and many analysts are predicting a 10% unemployment rate by the end of 2009. On top of these bleak unemployment figures, the latest Manpower employment report found that hiring is and will remain sluggish for most USA based employers. In fact, USA based employer hiring intentions are at the weakest level since the survey began in 1962 and remain among the lowest in the world with almost 70% of US employers surveyed expecting to see no change in hiring for the 4th quarter while 14% are predicting a decrease in the number of employees and only 12% expect to see any hiring increase. In other words, the few employers who have resumed hiring are confronting a market for talent that is filled with a growing number of applicants – many of whom are not qualified.
Given this operating environment, more and more companies are starting to consider recruitment process outsourcing (RPO) as a solution and as an analyst with NelsonHall noted in a July Workforce Management article, RPO is the one bright spot for HR outsourcing right now. In fact, NelsonHall’s research shows that RPO grew by 3.5% for the first six months of the year and they are predicting 12% growth in 2010. Moreover, RPOs are starting to see a significant uptick in activity and have already started hiring experienced recruiters laid off by large corporate employers.
However and although the RPO model is catching on, outsourcing recruiting activities is not for every organization. According to a whitepaper published earlier this year by the Aberdeen Group, companies who were considered “Best-in-Class” organizations in their survey (approximately 20% of the organizations surveyed) had the best results – achieving a 67% average increase in hiring manager satisfaction, a 60% average reduction in their time-to-fill rates and a 55% average improvement in their new hire rate. In contrast, the middle 50% of organizations utilizing RPO (in other words, average organizations) had less rosy results – achieving a 20% average increase in hiring manager satisfaction, a 15% average reduction in their time-to-fill rates and a 11% average improvement in their new hire rate. Meanwhile, those organizations who were considered laggards (the bottom 30%) had a 13% average decrease in hiring manager satisfaction, a 7% average increase in their time time-to-fill rates and a 9% average decrease in their new hire rate – in other words, they .
The conclusion? Taking RPO out for a test drive only makes sense if your organization already knows how to drive, otherwise, it can just turn into another expensive accident waiting to happen.
Comments
Got something to say?
-
Advertisements
Text Links
