Consulting and Outsourcing

To RPO or Not RPO ... That is the Question!

Written by Joshua Letourneau

For large organizations, the lure of Business Process Outsourcing (BPO), is intoxicating. The premise is logical and straightforward: through outsourcing non-critical functions to a third-party vendor, large organizations should benefit from reduced costs and expenses, thereby increasing margins and profitability.

Unfortunately, the history of BPO is one of noted failures, low client satisfaction, unmitigated risk, and overall, few successes.

For Example consider Delta Air Line's outsourcing of its customer service operations to a call center in India. That didn't go over too well. And how about last month's T-Mobile Sidekick debacle in which the servers used by the Sidekick service to store customers' contacts, calenders, to-do lists, photos, and other personal information failed, leading to a corruption of users' data. Sidekick users learned that maybe the "Cloud" isn't as safe as it's marketed to be... and they didn't need to attend the latest "Hack in the Box" conference to figure that one out!

So, guess what happens when BPO doesn't work out? You know the story - fingers wave, debates heat up, and both the BPO Vendor and Client make cases for their own lack of fault. Yet, behind closed doors, there is another much more quiet conversation taking place . . . one in which the Client begins to acknowledge that perhaps they underestimated the importance of the functions they attempted to outsource in the first place.

And that's where I'd like to focus this discussion - I'd like for you to consider just how important Recruiting is to your organization. Just how important to your organization's performance is your ability to, from an overall standpoint, recruit better talent than your competition?

Look, I understand if acquiring talent is not central to your ability to deliver on your promise to the market - depending on how your organization is set up, it very well may not be. Indeed, it's all relative. Is manufacturing and a supply-chain of predominantly transactional interactions at your core? If so, I get it. However, if innovation and tacit interaction are at the core of your ability to deliver your value proposition, I ask you to reconsider your answer.

Let's dive deeper however - perhaps, just perhaps, this isn't so black and white for you, right? Certain groups and business units may be talent-crucial, while others may not be. For example, is there a different talent pedigree among your product lines or service offerings?

Varying pedigrees within a single organization isn't unusual - in fact, it's likely an intelligent structure because it takes diametrically opposed personalities to support new products than mature products.

So, for a New Year's present for you, feel free to print out this Talent Segmentation Matrix for yourself. Go ahead and map your positions on the cube - for those that fall low-left, meaning those that are not 'Pivotal (or Critical) to the Organization' and there is a not a high degree of 'Difficulty of Identifying, Engaging, and Closing Talent', I suggest you consider RPO because the risk profile of these positions is low by definition. There may be further cost savings you can wring out of your recruiting process sponge.

For those positions that fall high-left, I would strongly, strongly suggest considering RPO - in fact, this is RPO's true 'sweet spot' where you will likely see the greatest cost savings overall.

However, as you move further right, meaning positions become more pivotal (or critical) to your overall performance, RPO will struggle more often than not. Your most skilled Internal Recruitment Staff already likely spend 95% of their time low-right and high-right (with Executive Recruiter focusing solely high-right on a pay-for-performance model.)

And if there is just one knock, or one element of constructive criticism for RPO vendors, it's this: Spend more time focusing on driving cost savings low-left and high-left than trying to replace internal Recruitment Staff and Executive Recruiters that specialize on the right side of the cube.

To conclude today, I recall a September 2006 Workforce.com article by Faye Hansen, Going for Global RPO, in which an RPO Practice Leader states that RPO, "leaves HR to focus on the absolutely critical function of strategic workforce forecasting -- looking at where the CEO and CFO want to go and leveraging the RPO provider to take on the tasks of recruiting." This statement seems to suggest that workforce forecasting is somehow more important than recruiting itself.

Do you agree? I don't -- I just can't bring myself to buy that pitch. I can think of few things more important than having an Internal Recruitment staff in place that can rock-and-roll on the right side of the cube . . . but that's just me. What do you think?

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BIOGRAPHY

Josh Letourneau is the Managing Partner of Knight & Bishop, a consulting firm focused on helping organizations define and act on what it means to be "social" from a bottom-line results perspective. The buzzword is "Social Business Design", but what it's really all about is helping organizations become more network-aware in order to leverage the collaborative power of their multiple internal (and often informal) networks. This is accomplished through an initial Social/Organizational Network Analysis, followed by a combination of both people-focused and technology-focused "playcalls".

Still performing Executive Search assignments in his free time, Josh brings a unique background to the table for Clients who aren't looking for cookie-cutter "best practices" du-jour. This background includes being a Sergeant in the U.S. Marines, to both Corporate America and Tech Startups alike. Today, is a Careers Community Manager for Fast Company magazine, member of the Human Capital Institute’s “Executive Acquisitions” Expert Panel, contributing blogger for FistfulOfTalent.com, Six-Sigma Green-Belt certified, and holds an MBA from Mercer University (Stetson School of Business & Economics) in Atlanta, GA.

Contact Josh at jl@knightbishop.com. Follow him on Twitter at http://twitter.com/jletourneau or find his blog at http://CollaborativeChaos.typepad.com.

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