Traditionally, the core rationale for organisations to outsource their talent acquisition to an RPO provider was about achieving cost savings. This has changed, but clients’ perceptions haven’t shifted yet, Andrew Wilkinson, PeopleScout‘s MD EMEA and APAC, argues. “Out in the marketplace, you’ve got people who either love or hate RPO. I think their reasons for not liking it are out of date. They’re not really looking at what the industry offers today, but at what it offered ten or fifteen years ago. They are unaware of the progress that RPO providers have made around the quality of the service, the quality of thinking, and the strategic partnerships that you can build.”
Millions in value versus a hundred thousand in costs
Procurement teams responsible for selecting an RPO partner love traditional metrics and are typically still driven by pricing, Wilkinson continues. “But the pricing model is overly focused on what I call the ‘nuts and bolts’ of efficiency. We might be arguing about a hundred thousand euros in price, whereas if you can hire people that stay for more than two years, or that are in the upper tier of performance, or that are culturally aligned with your business, you’ll get millions in value.”
Paying a hidden price
To make the shift in thinking, companies need to quantify the value of their hires. “No one ever calculates what it would mean if an organisation would have much lower turnover rates, or if they hired better quality people. But when you don’t do that, ultimately you are paying a hidden price, a hidden cost”, he says.
“By running a better quality process, hiring more of the right people who stayed longer, the savings they made were significantly higher than the extra cost of the service.”
PeopleScout promotes this every day with every prospect with the aim to create a shift in mindset. Wilkinson gives an example of one of PeopleScout’s biggest clients with whom it renegotiated the contract towards a model that’s more expensive, but also more focused on quality. “By running a better quality process, hiring more of the right people who stayed longer, the savings they made were significantly higher than the extra cost of the service. The savings outweighed the extra service costs by about thirty times.”
“The sophistication of talent acquisition is growing. Candidates are very choosy and will look at the culture, values, and brand, as well as the candidate experience when they take a decision as to who they want to work for.”
The trends in both the talent market as well as recruitment itself are working in RPO’s favour. “The sophistication of talent acquisition is growing. Candidates are very choosy and will look at the culture, values, and brand, as well as the candidate experience when they take a decision as to who they want to work for. There are also things like virtual assessments that have become a necessity because of COVID-19, and not every individual organisation is equipped to do that, whereas we’re doing it for multiple clients.”
High-quality recruitment experience
To be able to take advantage of the value an effective talent acquisition process can create, most businesses will end up getting outside help. Therefore, Wilkinson thinks the RPO market in Europe will continue to grow. “I used to think that RPO was one end of the spectrum, and in-house direct recruitment was the other, while in reality they’re right next door to each other. Ultimately, good talent acquisition done in-house, or good talent acquisition done by an RPO provider, are very similar. But you can’t be experts at everything you do. For the majority, the option to outsource to a third party is the best way to get a high-quality recruitment experience.”
Bio: Andrew Wilkinson – Executive Leader and Group MD of Europe and Asia Pacific at PeopleScout
Andrew Wilkinson has spent his entire career in the world of resourcing and recruitment marketing and is an experienced strategic leader working with both clients and the business to drive solutions to key challenges. Wilkinson joined PeopleScout through the acquisition of TMP Holdings LTD, an independent UK RPO, resourcing and employer branding company. As CEO he led the management buyout of the business from Monster in 2006 until the successful sale to PeopleScout in 2018. At Monster, he held various roles including CEO Europe of Monster in the early 2000s and he is now excited to lead on the development of PeopleScout across Europe and Asia Pacific. Wilkinson studied Accountancy at City of London Polytechnic, originally planning a career in finance before jumping tracks into recruitment.
This interview is part of a series of interviews our reporter Djaja Ottenhof has recently conducted about the value of the RPO market in Europe in 2021. Sign up for the ToTalent Newsletter to receive the full white paper The Value of RPO in Europe 2021: How RPO expands in an emerging market upon release.