You are on page 1of 32

Managing RPO Risks

5 Reasons RPO Contracts Fail


and
How to Make Yours a Success
Intros
• John Sumser
• Julian Seery Gude
• Heather Bussing
• RiseSmart: Bill Sebra
• HRExaminer

2 © 2010 HRExaminer, RiseSmart


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

• 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

3 © 2010 HRExaminer, RiseSmart


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

4 © 2010 HRExaminer, RiseSmart


RPO Trends 1

If It’s Repeatable,
It Will Be Outsourced

5 © 2010 HRExaminer, RiseSmart


RPO Trends 2

RPOs Feel Like Technical Platforms

6 © 2010 HRExaminer, RiseSmart


RPO Trends 3

RPO Service Model Is Maturing


7 © 2010 HRExaminer, RiseSmart
RPO Trends 4

RPOs Extend The Model Into Mobility

8 © 2010 HRExaminer, RiseSmart


RPO Trends 5

As Recruiting Models Change, Advantage Goes To The Professional

9 © 2010 HRExaminer, RiseSmart


RPO vs Staffing Agency 1

10 © 2010 HRExaminer, RiseSmart


RPO vs Staffing 2

Selection
Screenin
Strategy Sourcing &
g
Starting
• Human Capital • Sourcing channels • Applicant Contact • Candidate Selection
Assessments • Job Boards Center • Closing
• Process Analysis & • Postings & Referrals
• Advertising • Offer Management
Mapping Response
• College Recruiting • New-Hire Processes &
• Strategic & Tactical • Screening (Pre- and In-
• Internal Talent Pool Set-up
Staffing and Recruiting depth), Resume
Plans Analysis • Orientation
• Employee Referral
• Understanding Programs • Skills Testing
Requirements & • Candidate Career Portal • Relationship Focus
Priorities
• EEO/AA/OFCCP (Manager & Applicant)
• Platforms, technology compliance • Interviewing
• Interview coaching
• Pre-employment
• Quality Assurance procedures (testing,
physicals, background
checks, references,
etc.)

11 © 2010 HRExaminer, RiseSmart


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

12 © 2010 HRExaminer, RiseSmart


Identifying and Evaluating
RPOs

13 © 2010 HRExaminer, RiseSmart


Introducing Heather Bussing
• HRExaminer Contracts Consultant
• HRExaminer EAB Director
• Appellate Attorney
• All aspects of Employment Law
• Writing and Research Professor

14 © 2010 HRExaminer, RiseSmart


What Contracts Do

• Define Performance

• Allocate Risk

• What Happens When Things Go Wrong

15 © 2010 HRExaminer, RiseSmart


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

16 © 2010 HRExaminer, RiseSmart


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

17 © 2010 HRExaminer, RiseSmart


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

18 © 2010 HRExaminer, RiseSmart


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

19 © 2010 HRExaminer, RiseSmart


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

20 © 2010 HRExaminer, RiseSmart


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

21 © 2010 HRExaminer, RiseSmart


Define The Setting

High Volume

Low Freq High Vol High Freq High Vol

Low Freq Low Vol Low Freq Low Vol


Low High
Frequency
22 © 2010 HRExaminer, RiseSmart
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

23 © 2010 HRExaminer, RiseSmart


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

24 © 2010 HRExaminer, RiseSmart


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

25 © 2010 HRExaminer, RiseSmart


Risk Management Tools 2
• 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

26 © 2010 HRExaminer, RiseSmart


Risk Management Tools 3

• Overspend on Account Management


– No One Knows Everything
– Contract Success Depends on Interface
– Buyer Culture Is The Hurdle
– Invest in Training the Vendor

27 © 2010 HRExaminer, RiseSmart


Risk Management Tools 4

• Planning Becomes The Norm


• Use Pilot Programs
• Always Know Your Plan B
– Exit Deliverables
– Transition Plan
– Budgets for the Change
– Pipeline

28 © 2010 HRExaminer, RiseSmart


Risk Management Tools 5

• Negotiate KPIs and secure them with SLAs


– KPI = Key Performance Indicator (Metric)
– SLA = Service Level Agreement (Target)

– Don’t Believe Everything You Imagine

29 © 2010 HRExaminer, RiseSmart


Questions

30 © 2010 HRExaminer, RiseSmart


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

• 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

31 © 2010 HRExaminer, RiseSmart


The Secret Word

32 © 2010 HRExaminer, RiseSmart