CWS 3.0: January 26, 2011 - Vol. 3.3

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Behind the News: RPO Rising

Recruitment process outsourcing has always had its share of skeptics. And now it is proving its critics wrong. Post the global crisis, customers are turning to RPO as a more economical and viable outsourcing option. The Staffing Industry 2010 Buyer Survey reveals that 22 percent of customers are using RPO compared with 17 percent in 2009.

"It's no surprise," says Penny Queller, a senior vice president, strategic solutions at Advantage xPO, a provider of consultative workforce management solutions. "Coming out of the downturn, many companies have downsized their internal recruiting teams. Who needs recruiters when you are not hiring," Queller asserts.

That sentiment has now changed. As companies emerge out of the recession and are looking to rehire, it becomes a decision of "buy or rebuild" Queller says. Hiring is not a core competency of many organizations. Why struggle to rebuild a recruiting team when you can just outsource that function, which is more economical.

In fact, this decision is far easier for companies to make now than it was in 2008, experts say. Then, companies either laid off all its internal recruitment teams or the RPO provider took them on. It was not an easy or quick transition. Now, most companies don't have an internal recruiting team to worry about.

Further, companies that have a well-developed CW program have an advantage. Those firms, used to dealing with a managed service provider (MSP), find that RPO is almost an easy next step. This is especially true if the CW program is managed by the HR department. Of course, if procurement or IT is in charge of the CW program, it's a different story.

Even then, the RPO way can be a good alternative. It becomes an attractive choice when one realizes that the hiring can be segmented. One or more skill sets can be outsourced rather than all of the company's hiring. Take the example of a large retail chain opening a store in a region where it has no operations. It would make more sense for the retailer to use RPO to staff that new store as the company does not have the internal expertise or regional knowledge to staff it.

Few years ago, the RPO way was new. The marketplace has evolved, people have moved further along the CW learning curve. So the RPO option makes sense, especially given the recession. But before diving in, customers need to do their due diligence. "Study the space and do your research," Queller says.

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