hrexaminer 5 reasons rpo contracts fail and how to make yours a success

Managing RPO Risks

5 Reasons RPO Contracts Fail and

How to Make Yours a Success

2 © 2010 HRExaminer, RiseSmart

Intros

• John Sumser• Julian Seery Gude• Heather Bussing• RiseSmart: Bill Sebra• HRExaminer


About RiseSmartAbout RiseSmart

• Market Presence– Founded in 2006– Headquartered in San Jose, CA– Regional support in New York, Chicago, Denver, Dallas – Back office operations center in Pune, India

• Products & Solutions– Transition Concierge™ - outplacement 2.0 solution– Recruit Concierge™ - recruitment process outsourcing– SmartRedeploy™ - redeployment program

• Customers & Partners– SMBs and leading Fortune companies– Defense contractors– Across industries such as healthcare, retail, technology,

services, financial services, manufacturing, real estate, pharmaceuticals, education

RiseSmart provides next-generation talent management solutions, leveraging technology, process, and people to benefit companies large and small.


Overview

• RPO?• RPO Trends• RPO vs Staffing Agency• What Makes a Good Contract• Identifying and Evaluating RPOs• Major Risks Associated with RPO Contracts• Five Risk Management Tools• Questions


RPO Trends 1

If It’s Repeatable, It Will Be Outsourced


RPO Trends 2

RPOs Feel Like Technical Platforms


RPO Trends 3

RPO Service Model Is Maturing


RPO Trends 4

RPOs Extend The Model Into Mobility


RPO Trends 5

As Recruiting Models Change, Advantage Goes To The Professional


RPO vs Staffing Agency 1


RPO vs Staffing 2

Strategy

• Human Capital Assessments

• Process Analysis & Mapping

• Strategic & Tactical Staffing and Recruiting Plans

• Understanding Requirements & Priorities

• Platforms, technology

• Interview coaching

• Quality Assurance

• Sourcing channels

• Job Boards

• Advertising

• College Recruiting

• Internal Talent Pool

• Employee Referral Programs

• Candidate Career Portal

• EEO/AA/OFCCP compliance

• Applicant Contact Center

• Postings & Referrals Response

• Screening (Pre- and In-depth), Resume Analysis

• Skills Testing

• Relationship Focus (Manager & Applicant)

• Interviewing

• Pre-employment procedures (testing, physicals, background checks, references, etc.)

• Candidate Selection

• Closing

• Offer Management

• New-Hire Processes & Set-up

• Orientation

SourcingScreenin

g

Selection &

Starting


RPO vs Staffing RPO Staffing

Full Process Ownership

Yes No

Pricing Service Level Per Placement

Performance Measures

Yes No

Basic Service Infrastructure Bodies in Seats

Employment Branding Yes No

Metaphor Limo Service Rental Car

Reliance Full (Total Delegation) Linear (One Off)

Basic Orientation Strategic Tactical

Client Expectation Total Offload Transactional


Identifying and Evaluating RPOs


Introducing Heather Bussing

• HRExaminer Contracts Consultant

• HRExaminer EAB Director

• Appellate Attorney

• All aspects of Employment Law

• Writing and Research Professor


What Contracts Do

• Define Performance

• Allocate Risk

• What Happens When Things Go Wrong


Problems Specific To RPOs

• Hard to Tell When Contract Isn't Working

• Hard to Know Who to Blame

• Adjust for Factors Beyond Control– lack of qualified candidates,

– difficult geographic market, • no one wants to move to Kansas City


Build Flexibility into Contract

• Goal:– balance flexibility, clarity and accountability

• Person doing work wants maximum flexibility.

• Person paying wants maximum accountability.

• Get material modifications in writing– Material terms

• things that affect price or scope of work significantly


Break It Into Bite-Sized Pieces

• Use shorter term renewal increments – To adjust for changes and performance goals

• Divide performance and payment – Discrete components by dept, type of job or time period

– Specific Performance Payments


Don't Let Lawyers Screw it Up

• Ensure that people who understand the work write scope details

• Use plain language

• Make the contract reflect reality

• If you don't understand it, don't sign it. Really


A recruitment process outsourcing contract is only as good as the relationship on which it is based.


Typical RPO Service Agreement

• Objectives and needs assessment• Scope Statement• Pricing and Cost Estimates• Organization Chart• KPI’s, measurements and metrics• Work schedules and communication• Response and Escalation Procedures• Termination Agreements


Define The Setting

Frequency

Volu

me

High

Low High

Low Freq High Vol

Low Freq Low Vol

High Freq High Vol

Low Freq Low Vol


Recruiting Leader’s Role Changes

• Now The Program Manager– Multi-Functional Coordination

– Contract Administration

– Vendor Management

– Scope Monitor

– Boundary Definer

• Career Broadening and On To Deal Management– As The Recruiting PM, New Career Momentum


Major RPO Risks

• Reality Always Different From Proposal• Can’t Always Know What You Don’t Know

• Business Agility Requires Flexibility

• Transition Planning• Switching Horses

• Defined Closeout Process

• Contract Administration/Program Mgt• Inexperienced Buyer• Insoluble Problems– Rocket Surgeons in Fargo


Risk Management Tools 1

• Strive for Real Partnership

– Avoid Recruitment Problem Outsourcing• Providers will Have Same Issues You Do

– Full Disclosure Leads to Fulfillment

– Be Prepared to Hear The Truth• Experienced Providers Have, well, Experience



• Problem– RPOs Can Have Initial Traction Problems

– Infant Mortality is Concern

– Inflection Point Stress

– Expectations Rarely Meet Reality

• Learn the Program Management Model– Dotted Line Teams Intersecting

– Have a Single Throat to Choke

– Be The Single Throat To Choke



• Overspend on Account Management– No One Knows Everything

– Contract Success Depends on Interface

– Buyer Culture Is The Hurdle

– Invest in Training the Vendor



• Planning Becomes The Norm• Use Pilot Programs• Always Know Your Plan B– Exit Deliverables

– Transition Plan

– Budgets for the Change

– Pipeline



• Negotiate KPIs and secure them with SLAs– KPI = Key Performance Indicator (Metric)

– SLA = Service Level Agreement (Target)

– Don’t Believe Everything You Imagine


Questions


More About RiseSmartAbout RiseSmart

• Market Presence– Founded in 2006– Headquartered in San Jose, CA– Regional support in New York, Chicago, Denver, Dallas – Back office operations center in Pune, India

• Products & Solutions– Transition Concierge™ - outplacement 2.0 solution– Recruit Concierge™ - recruitment process outsourcing– SmartRedeploy™ - redeployment program

• Customers & Partners– SMBs and leading Fortune companies– Defense contractors– Across industries such as healthcare, retail, technology,

services, financial services, manufacturing, real estate, pharmaceuticals, education

RiseSmart provides next-generation talent management solutions, leveraging technology, process, and people to benefit companies large and small.


The Secret Word

hrexaminer 5 reasons rpo contracts fail and how to make yours a success

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