“Your recruitment outsource partner must be part of your HR inner circle of trust”

All too often recruitment outsource partners can end up being on the peripheral of the core HR strategic team – sometimes because the introduction of the partner was a procurement led strategy and HR never truly bought into the strategic outsource move or because the nature of having a third party inside ‘our’ business means that the outsource partner is really seen as a supplier to be managed at length, to be held accountable for transactional service delivery. This at the expense of a true strategic partnership, with a partner to align to and joint problem solve with, where goals and KPI are shared.  Sharing both success and failure together in the same way.

Now I know many of RPO/MSP Account Directors reading this will say – “Stephen, this is not a problem for me, I have in depth strategic partnership with my clients”, and HR Directors frowning at me thinking “we have good relationships with our recruitment outsource partner”. My challenge to both – how truly strategic is your RPO/MSP partnership?

There are factors we all have to accept, that nibble away at the foundations of true strategic partnership between the outsource partner and HR – Commercials, KPI, SLA, service credits, service matrix deliverables, breach of contract clauses etc. I have worked on many RPO/MSP account remediation projects and the one constant I have experienced is that when the chips are down these factors become the stones that start to be thrown. Understandably so, as both parties look to protect their position. My account remediation sessions conducted with both RPO/MSP provider and HR, show me quite clearly that the stones were primed to be thrown right at the start of the relationship anyway, because the foundations of the relationship were not formed in the right way.

Wondering if your RPO/MSP relationship is primed for throwing stones? Do you think, hear or find yourself saying any of the below:

From the RPO/MSP:

“MBR is coming up next week, how should we present the numbers to the client in a way that optimises the potential opportunity we see to fix missed KPI”

 “We can’t tell them that…rerun those numbers...”

 “Thank goodness X is not at the MBR meeting – she would really challenge these numbers and our projected yield”

 “We need to get our story straight before we go in – they will pick holes in this”

From HR (the client)

“here we go again flash power points and graphs – but what are they really telling us?”

 “I heard from one of their team that….”

 “they said in implementation they would build this, but it has never come to fruition”

 “they need to bring in a new CSD – he/she does not understand our business”

 “I used to have recruitment at my internal HR meetings, but now that I don’t own it, I tend to only meet with them at Account Review meetings

I could go on – and I know we smile to ourselves and maybe grimace when we recognise those worlds I describe. But what can we do up front, in the early stages, when establishing the foundations of the relationship, that may lead to stronger partnership behaviours? If we don’t get the relationship framework right at the outset then it is far too easy for either party to reach for the ‘bag of stones’ of contractual agreements. For me the key enabler to this is to ensure that the recruitment outsource partner service does not become unhinged from the broader HR agenda and inner circle of governance. 

We all know that effective Resourcing in a business is enabled by a number of key pillars:

      I.        Recruitment and selection

     II.        Human Resource Planning

   III.        Employee Relations

   IV.        Human Resources Development

     V.        Performance Management

   VI.        Pay and reward

  VII.        Patterns of work and flexibility

 VIII.        Diversity and inclusion

It is essential each of those pillars are defined and governed as one. Defining and implementing recruitment strategies and models outside the wire or inner sanctum of HR does not enable a holistic aligned approach to Resourcing.   It is not strategic partnership.

There are many opportunities for aligning and integrating effort and objectives, across these pillars and what is key is that both RPO/MSP and HR accept a paradigm that is ‘our People Strategy’ is enabled by both internal HR strategies and our RPO/MSP partner recruitment strategies. These must be discussed in tandem at shared governance meetings, supported with transparency and shared goals. – some of the opportunities I have identified for shared HR discussion, that will better deliver the synergy between HR and RPO/MSP are described below:

1.    Inflow, internal resourcing and outflow must be seen as one shared challenge with a combined solution. Picture this:  A farmer whose sole purpose is to water the crops in his small holding every day. And he does this by going to a water source with his bucket to collect the water to pour on the crops. The problem he has is his bucket is full of holes and by the time he gets to the crops he has little water left, which means he must return to the water source more often. Concerned at his increasing need for more water, should we advise him to look afar for alternative water sources or would we get him to fix the holes in his bucket? I see organisations where staff turnover is worryingly high and that turnover leading to increased open vacancies – and all of a sudden, the staffing level issues in the business are seen as problems related to the recruitment outsource provider. The pressure and the spend directed to finding new talent rather than retaining exiting talent. i.e. not fixing the holes in the bucket. 

A silo perspective to resourcing also prevents us building resourcing demand forecast plans, which enable flexible demand shape models (the type of roles/open vacancies listed in the demand plan). How often do we lose good candidates for our business because the exact role they want is not available immediately for them? – consider the benefits of agile shape plans that blend internal mobility/succession development plans with current role demands – this would allow the RPO/MSP to offer candidates a starting role, (not the candidates first choice), with a guarantee of internal mobility to the preferred role at a later date.

I recognise it is not easy to have shared conversations and shared solutions to deal with a combined inflow, internal resourcing and outflow challenge -  Budgets are fixed against cost centres, the RPO/MSP has a P&L account to deliver, but imagine the power of an honest conversation between RPO/MSP and HR that agreed for example to divert attraction/sourcing budget from the RPO/MSP into the businesses HR employee retention programme? How to offset that reallocation of spend commercially can be agreed, but the principle is where do we get best bang for buck to ensure we maintain the resource levels we need to achieve our business goals and ensure our EVP retains and attracts new candidates by reputation alone? 

•  RPO/MSP providers – paradigm shift: Your client high staff turnover is not just an improved revenue stream opportunity from increased open vacancies – it is an EVP/employee retention challenge – help them with that, show agile resourcing models that blend internal resourcing models with your RPO/MSP model.
• HR Directors – Look inward and prioritise your efforts to maintain staffing levels with engagement and retention initiatives. Do not just keep going back to the well with a leaky bucket.

2.    Asses the viability of sourcing/selection methods across full candidate employee life cycle. Any standard RPO/MSP solution model proposal will outline how various sourcing and selection tools/tech will be applied to drive effective recruitment. The challenge is that the effectiveness and utilisation of these tools and tech are often contained to the candidate attraction and sourcing space only; after all the RPO/MSP proposal and commercial model is about hiring. The impact of this is that the tools /tech solutions are not aligned to other HR needs in the other employee resourcing pillars, owned by HR. For example, behavioural assessment indexing as a selection tool – must, to be truly effective, be linked to internal development and succession development programmes. Also, establishing an employee referral scheme as a sourcing stream is meaningless if outflow exit data is not being used to develop the ‘lived experience’ for employees – how can we expect our employees to advocate in a referral scheme if the psychological contract reality is poor.  Mentor schemes, ambassador networks, sometimes used to support attraction and engagement of talent pools of candidates are also meaningless if the ‘lived employee experience’ is such that your ‘Ambassadors’ are like needles in haystacks. I have a real example of this with my youngest daughter Claudia. She is determined to be a midwife and I would say the attraction and sourcing of her interest as a candidate for this career has been really strong, but after spending 1 week on work shadowing her biggest disappointment was that every midwife she spoke to was negative about the role and all advised her not to become a midwife.

• RPO/MSP - solution your RPO/MSP model to enable your client to benefit from your tools and tech right across the candidate and employee life cycle. Give your tech selection tools away for free to the client to use with development programme, succession agendas.
• HR Directors – Look for alignment and consistency in approach with any candidate management tools adopted by the RPO/MSP and those HR tools you use within your other employee resourcing pillars.

3.    A model and approach to develop EVP must not be contained to Attraction and sourcing it must be the one constant thread cutting across the full candidate to employee pathway. It is unusual for the RPO/MSP to not suggest a review of their clients’ current EVP. After all a powerful EVP is a great enabler to any RPO/MSP as attraction collateral for new candidates. There is a lower index cost per hire by up to 46% at those companies with a stronger brand presence, but more interestingly there is 28% lower turnover at those companies – balance this stat against the fact that 84% of people would leave their current job to work for a company with a better corporate reputation. Yet all too often the scope of the EVP research conducted by the RPO/MSP, with combined insights and strategy development of the EVP proposition, is restricted to the world of candidates only and subsequently only one of the resourcing pillars is impacted. This should be the perfect opportunity for shared strategic HR discussion between RPO/MSP and HR.

• RPO/MSP – Ensure you can demonstrate to HR the benefits and impact of your EVP insight and research into other core HR pillars – suggest a solution that spans all pillars.
• HR Directors – Look holistically at the EVP potential provided by your RPO/MSP. Measure the impact benefit across retention, engagement as well as attraction and sourcing.

4.    One single view of data and metrics – if its ugly share it, shared pain is shared gain. All too often we have concerns about the validity of data – RPO/MSP can spend so much time trying to craft data reporting that tells a story to give the client confidence. It’s vital we work to fix validity and integrity of the data and be transparent with that data. I recognise that both HR and the RPO/MSP will have their own unique reporting suite requirements, but we must get to the point where there is one single SharePoint/shared drive of reporting dashboards that tell the story of the performance and potential of the account and how that performance is an enabler to the achievement of the HR people plan. RPO/MSP metrics must be more than just recruitment performance/ productivity stats reported in a silo. We must be able to link recruitment MI to all other HR KPI, showing clearly the true business impact of recruitment activity. This is the principle of Gain Share models for me. Why shouldn’t we assess the effectiveness of the RPO/MSP on more than just quantitative metrics. Assess recruitment conversion stats, pipeline performance stats; against outflow stats, staff opinion survey results – internal mobility, succession data, people development data.

• RPO/MSP - build reporting suites showing gain share measures that link your recruitment performance to the achievement of your client’s business goals / KPIs and share those openly.
• HR Directors – Encourage your RPO/MSP to share reporting dashboards with you openly and when they do and you identify concerns, show you are driving towards fixing the concern as a team. Insist your RPO/MSP provider adopts balance scorecard measuring impact of recruitment on all the resourcing pillars.

5.    Blend the RPO/MSP Account team structure with personnel from the outsource team and the client – ‘Hybrid Account Team Structures'. Standard Account team structures are normally populated with personnel from the RPO/MSP provider. I understand why this is done; it is one of the underpinning principles of outsourcing – removing headcount from the internal team to support the business case for outsourcing. The difficulty is that this type of structure immediately builds 2 virtual teams within HR and creates challenges with communications and synergy. One solution offered up by RPO/MSP to mitigate this is to create dotted line reports from/to the client HR/Ops leadership team. Even within internal teams, dotted line reporting is problematic at the best of times, wrap around that the complexity of an outsource relationship and those challenges multiply. We should be encouraging ‘Hybrid’ Account Team structure models, with both RPO/MSP and client personnel filling key posts in the team.

• RPO/MSP – Be prepared to solution your RPO/MSP as a ‘Hybrid’ structure and ensure you reflect this in your pricing structure
• HR Directors – Insist your RPO/MSP enable key senior roles in the Account Team structure to be filled by your own team members

Summary:

There will be other opportunities in addition to the ones I have described, to enable improved strategic resourcing partnership, but the list of 5 above is a good starting point. What I propose is not easy – HR Directors need to accept that their HR people strategy can only truly be holistic when the RPO/MSP is included at the strategic HR table.  RPO/MSP Account Directors will need to be able to talk the talk at the strategic HR table, with a core understanding of each of the Pillars of effective resourcing. But -  if we can start to tick from the list of opportunities above in the affirmative, confident that RPO/MSP partner is at the core HR table for discussion, then we are getting closer to a true strategic partnership and in the words of Robert De-Niro, we create that – “that circle of trust”