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

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 RPO Trends 2

RPOs Feel Like Technical Platforms

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 RPO Trends 3

RPO Service Model Is Maturing

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 RPO Trends 4

RPOs Extend The Model Into Mobility

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 RPO Trends 5

As Recruiting Models Change, Advantage Goes To The Professional

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RPO vs Staffing Agency 1

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 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

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Identifying and Evaluating
RPOs

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

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 What Contracts Do

• Define Performance

• Allocate Risk

• What Happens When Things Go Wrong

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 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.

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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

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 Define The Setting

High Volume

Low Freq High Vol High Freq High Vol

Low Freq Low Vol Low Freq Low Vol

Low High
Frequency
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 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

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 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

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 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

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 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

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 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