idealpeople blog

We feel compelled to congratulate the team at Recruiter for a great issue this month. If we were being bullish we’d suggest that they’ve been watching us - what with articles on IT Skills shortages, a critique of the value of accreditations in the recruitment industry and a rant about RPO.

Probably the most interesting item in the edition is this month’s edition is the monthly Soapbox feature, which this month was written by Richard Forkan, Head of Recruitment at Plan-Net. We don’t often compliment competitors - but to be fair, these guys are most certainly offering something refreshing through their Recruitment arm - which is part of a wider IT Professional Services company and therefore gives them a unique technical insight into recruitment.

Richard’s view on RPO is interesting, and we couldn’t agree more. It also ties in with commoditization - a subject close to our heart - see Simon Wardley’s brilliant presentation on it here.

Commoditization occurs when a service or function which traditionally adds value becomes “old hat” and efforts are made to reduce costs. A good example is a website - once seen as a way of differentiating yourself, but is now seen as a simple “must have”.

Richard argues that RPO is essentially commotidization of the recruitment process. Now that companies have accepted the fact that they must use agencies in order to gain access to top IT talent, the RPO system is generally seen as a way of reaching the candidates supplied by agencies at a lower cost.

However, in reality Recruitment is both far too business-critical and at the same time far too complex for a solution like RPO to work. Let’s look at how RPO works:

- Company is sold an RPO solution - on the back of reducing time-to-hire, reducing cost-to-hire and improving quality of candidates.
- RPO company touts vacancies out to a number of other agencies. Because they are promising reduced cost-to-hire, agencies are asked to work to lower margins
- A situation occurs: a large number of agencies working to low margins and using the exact same sourcing channels (on-line databases and advertising) all start “work” immediately, at the same time

And here’s the outcome:

- Agencies (working to low margins, remember - and in a fierceley competitive environment) fight each other over the same candidates sourced from the on-line jobsites
- Time is of the essence, so screening goes out of the windoe and, as Richard says - “there is no technical verification and certainly no candidate interview”. In fact, many agencies won’t even talk to candidates - they’ll just send the CV over, knowing that the RPO company’s policy will be purely a “XYZ sent the CV first, therefore XYZ is the agency we’ll deal with”.
- The hiring company’s reputation will be damaged, because candidates whose CVs are vaguely relevant will each receive at least 5 phone calls about the same job - and then will probably become embroiled in an inter-agency squabble over “sent their CV first”. This is made worse by the elongated communication chain, which goes Hiring Manager - RPO Company - Agency - Candidate, which means interviews take longer to arrange and inevitably important information the candidate needs will got lost somewhere. Even worse than this is the fact that the “he who phones quickest” approach means most candidates will be given as little information as possible about the hiring company’s Recruitment Brand.

The net result: a cheaper method of recruitment - but an ineffective way of reaching superstar candidates.