How Employers Value RPO Relationships Most in Turbulent Times
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The Current Employment Market
As we enter 2023, no one could’ve predicted the last three years: A pandemic that instantaneously shifted the working world permanently, remote/hybrid work is now standardized, increasing employee turnover because of the “Great Resignation,” and rapid inflation causing extreme pressure to increase wages. Despite economic volatility, job openings and unemployment also remain at near record highs and corresponding lows. Couple that with a decreasing labor force participation rate and it creates a flurry of conditions that make it more difficult to acquire and retain employees.
Less Commitment
People are increasingly less committed than ever during the recruiting phase. A 2022 Talent Acquisition Trend Report, found that only 1 out of 3 candidates are actually committed when accepting a job offer. The rest, 2 out 3, said they still are keeping options open. This seems to be a changing social perception and accepted behavior.
Candidate “ghosting” is a phenomenon growing exponentially. The data also shows that someone who is in their 20’s is much more likely to ghost than someone in their 50’s or 60’s. The conclusion is that ghosting will likely worsen over time, and it is not a passing fad. It’s a new reality. Additionally a Spring 2022 research survey found that 74% of US employees were still actively looking for new work or open to opportunities in the next 6 to 12 months.
How RPO is a Value to Employers
A Fall 2022 research study underwritten by the Recruitment Process Outsourcing Association revealed several key factors on how employers value Recruitment Process Outsourcing (RPO) relationships. RPO relationships and the expertise they bring have become increasingly valuable to employers amid a constantly shifting economic and employment market.
Improved Hiring Metrics
The study asked, "Does having an RPO actually influence and change the hiring metrics you're actually able to achieve?" 97 percent of the employers asked that question said, "[RPO] helps to improve those metrics.". Metrics differ across organizations, but almost all will include metrics addressing timing and cost. The fact that at least 9 out of 10 companies who work with RPO’s say that their measurements improved is a clear value. Employers say that hiring is more consistent (61%), higher quality (55%), and faster (49%)
Focusing on Other Priorities
Recruitment has been ranked high on the list of priorities for many HR leaders and executives for the past several years. However, according to a recent report recruiting that has slipped suddenly to number 8. Retention is fast becoming the prime focus as opposed to acquisition. 89% say that having an RPO partner allows them to focus on other org priorities like retention, engagement, performance management, training and development, and compensation.
Scaling Up and Down of Hiring
The constant barrage of major impacts to the employment market are demanding quicker changes to approaches in hiring. A business that is not focused on acquisition could suddenly find themselves needing to hire 10’s, 100’s or even 1,000’s quickly to respond to these changes. These massive shifts mean that the ability of an employer to scale up and down their hiring is a big deal. Having a large Talent Acquisition team to train and manage adds to the complexity. In times of lean hiring the Talent Acquisition function can be trimmed relatively quickly. However, in the event of a spike and demand the ability to recover previous volume takes too much time. Suddenly employers may not have enough employees, which creates disruption and challenge for business leaders outside the talent function. Working with an RPO eliminates this challenge since RPO’s have high performing recruitment teams available on demand.
Return on investment (ROI)
More than half of the employers interviewed said they had a positive return on investment (ROI) from their RPO. Interestingly, the strength of ROI was also affected by the length of that relationship. The longer an organization has an RPO relationship in place, the more likely they are to say that the ROI has been a positive one.
Employers who use RPO and associate that with a positive ROI, were found to be 725 percent more likely to receive support for hiring strategy and business alignment. The most effective RPO relationships are not just asked to fill seats but help solve business problems. RPO can provide short term value to meet immediate needs, but also align with the business to meet the long-term needs.
By Adam McCoy