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It’s not all about cost: Outsourcing for expertise

by Robert Magliocco, Global Head of Client Services, Alexander Mann Solutions

To quote Jim Sykes’ recent LinkedIn article “long gone are the days in which a business case for recruitment process outsourcing was founded primarily on reducing recruitment agency spend” but if this is the case what are companies basing their decision to outsource upon? Is cost still a driver and what are the other levers that prompt a talent acquisition leader to consider the prospect of partnering with a recruitment process outsourcing (RPO) provider?

The needs of an organisation now transcend cost and include candidate experience, diversity, brand, accessibility, total talent, technology and market insights to name but a few.

In recent years talent acquisition outsourcing has shifted its main focus from driving cost value to a more holistic view of the value that outsourcing can provide. Cost will always be a reason to choose to outsource however enhancing in-house expertise rather than outsourcing a cost challenge has now become part of the paradigm.

The growing sophistication of internal talent acquisition teams has resulted in some of the more fundamental recruitment challenges of ten years ago no longer holding centre stage. Talent acquisition establishing itself as a specialist function rather than a tactical activity managed off the side of a HR specialist’s desk has been a turning point. This shift has given talent acquisition teams the ability to make strategic decisions as to what expertise to keep – and grow – internally and what capabilities to outsource, based on the specific needs of their organisation.

Although basic challenges such as agency dependency may have been addressed of late, new talent acquisition challenges have presented themselves as a result of an increasingly fluid and competitive candidate marketplace.

The needs of an organisation now transcend cost and include candidate experience, diversity, brand, accessibility, total talent, technology and market insights to name but a few. Balancing the mix of critical business needs whilst equally continuing to deliver the day job of recruiting great talent in a dynamic business environment has shifted the business case for RPO beyond transactional wage arbitrage to the insourcing of expertise.

While I don’t fully agree with Kevin Wheeler’s recent article titled “Do We Need Internal Recruiting at All?” in which he questions if organisations even need an internal talent acquisition function, I do agree with his assertion that technology is essential to efficient recruitment, and that many RPO providers have made significant investments in technology expertise and innovation. Investments that internal teams often can’t match in terms of budget and resources.

To his point, the right RPO partner can provide tremendous value to in-house teams when it comes to the rapidly evolving world of recruitment technology. With an technology savvy outsourcing partner, the burden on internal teams to stay up to date on the $2.2 B recruitment technology market is lifted so they can focus on attracting and engaging candidates.

As RPO continues to evolve so too does the strategic nature in which clients and RPO providers now partner. Insourcing expertise is the new driver.

I have seen an increasing appetite to drive an enhanced Talent Acquisition service whilst managing cost effectiveness; from improving flexibility and agility to meet shifting business needs, and investing in functional expertise to enabling innovation and minimising fixed costs. A recent example of this was a client whom we partnered with to establish a tailored model suitable for a broad range of geographic locations under one global centre of expertise.

The initial business case was firmly rooted in building this capability within the talent acquisition infrastructure, however it turned out that was just the start of what they wanted to achieve. In fact, through our work with them we uncovered that the value they truly wanted to derive from their RPO partnership included enhancing the hiring manager experience, elevating the candidate experience, and bringing digital innovation to how they delivered talent acquisition.

With value taking centre stage the effective management of fixed and variable costs, the minimisation of process waste and finding ways to fund investment in growth and innovation are all key considerations for any successful Talent Acquisition leader.

As RPO continues to evolve so too does the strategic nature in which clients and RPO providers now partner. Insourcing expertise is the new driver. Whilst cost will always remain a key factor in the decision to outsource finding ways to unlock the holistic value of TA to meet the increasing demands of a dynamic business is now the new business case for change.


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