Documente Academic
Documente Profesional
Documente Cultură
Submited to
Bankim Doshi
(Director)(Guide)
Talent Corner HR Services Pvt. Ltd.
Submited by
Index
Sr.n
o
Particulars
Page
no.
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Executive Summary
Objective of study
Recruitment process outsourcing an overview
Outsourcing process flowchart
Critical requirement
Factors to be consider before selecting a
recruitment consultant
Types of rpo
Benefits of rpo
Technique use by rpo for recruitment
Core and non-core activities of corporate hr
Choice of outsourcing model
Understanding recruitment process
The recruitment process lifecycle
Advantages of rpo
The roi of rpo: recruitment expertise
Rpo process model
The big 3 efficiency metrics in recruitment
Conclusion
Acknowledgement
Bibliography
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5
6-9
10
11
12-13
7
8
9
10
11
12
13
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15
16
17
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Executive Summary
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15-16
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Outsourcing the human resource (HR) processes is the latest practice being followed by middle
and large sized organizations. It is being witnessed across all the industries. In India, the HR
processes are being outsourced from nearly a decade now. Outsourcing industry is growing at a
high
rate.
Human Resource Outsourcing refers to the process in which an organisation uses the expert
services of a third party (generally professional consultants) to take care of its HR functions
while HR management can focus on the strategic dimension of their function. The functions that
are typically outsourced are the functions that need expertise, relevant experience, knowledge
and best methods and practices. This has given rise to outsourcing the various HR functions of an
organization.
Recruitment Process Outsourcing (or RPO) to India is characterized by identifying those
expertise that are not inherent to the core of the client organization, i.e dividing the process of
recruitment into core and non-core HR activities.
The non-core recruitment processes such as database searching, job advertisements, head hunt
research, internet mining, etc. involve 50 - 60% of the recruiters time, energies and costs.
Outsourcing the non-core recruitment process creates additional efficiencies, while
simultaneously allowing for a focus on building relationships with candidates and clients.
Recruiters, thus, are able to focus better on core recruitment functions and work on important
hiring strategies that create profitable growth and sustain business success.
For reasons of having no time and resources to manage human resource functions, companies
usually resort to HR outsourcing. It is a cost-effective way of managing human resource
functions without having to resort to employing personnel for an in-house HR staff.
There are a lot of benefits that businesses can gain from outsourcing HR tasks. One of the most
appealing benefits is the ability of a company to focus on their core business activities while still
having effective HR policies.
Objective Of Study
The objective of project was to identify the benefits of outsourcing recruitment and
understanding the recruitment process.
The Project contains details about the various criteria of outsourcing recruitment.
The project highlights the reasons why companies indulge in outsourcing recruitment and the
merits and advantages of outsourcing recruitment to direct hiring.
It also enumerate various factors to be considered before outsourcing recruitment.
.
Identify the various practices of recruitment existing in the industry. The project should
have a detailed understanding of the methods adopted by recruitment agencies to make
the hiring process quicker.
Meaning.
Recruitment Process Outsourcing (RPO) is a form of business process outsourcing (BPO) where
an employer outsources or transfers all or part of its recruitment activities to an external service
provider.
To quote the Recruitment Process Outsourcing Association, "Recruitment Process Outsourcing is when
a provider acts as a company's internal recruitment function for a portion or all of its jobs. RPO
providers manage the entire recruiting/hiring process from job profiling through the on-boarding of the
new hire, including staff, technology, method and reporting. A properly managed RPO will improve a
company's time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce
cost and improve governmental compliance."
The RPO Alliance, a group of the Human Resources Outsourcing Association (HROA), approved this
definition in February 2009: "Recruitment Process Outsourcing (RPO) is a form of business process
outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external
service provider. An RPO provider can provide its own or may assume the company's staff,
technology, methodologies and reporting. In all cases, RPO differs greatly from providers such as
staffing companies and contingent/retained search providers in that it assumes ownership of the design
and management of the recruitment process and the responsibility of results."
On the other hand, occasional recruitment support, for example temporary, contingency and executive
search services is more analogous to out-tasking, co-sourcing or just sourcing. In this example the
service provider is "a" source for certain types of recruitment activity. The biggest distinction between
RPO and other types of staffing is Process. In RPO the service provider assumes ownership of the
process, while in other types of staffing the service provider is part of a process controlled by the
organization buying their services.
History.
While temporary, contingency and executive search firms have provided staffing services for many
decades, the concept of an employer outsourcing the management and ownership of part or all of their
recruiting process wasn't first realized on a consistent basis until the 1970s in Silicon Valley's highly
competitive high tech labor market. Fast-growing high tech companies were hard-pressed to locate and
THAKUR INSTITUTE OF MANAGEMENT STUDIES & RESEARCH
Prsented by Safakat Ibrahim Agashiwala(PGDM 2008-2010)
6
hire the technical specialists they required, and so had little choice but to pay large fees to highly
specialized external recruiters in order to staff their projects. Over time, companies began to examine
how they might reduce the growing expenses of recruitment fees while still hiring hard-to-find
technical specialists. Toward this end, companies began to examine the various steps in the recruiting
process with an eye toward outsourcing only those portions that they had the greatest difficulty with
and that added the greatest value to them. Initial RPO programs typically consisted of companies
purchasing lists of potential candidates from RPO vendors. This "search/research" function, as it was
called, generated names of competitors' employees for a company and served to augment the pool of
potential candidates from which that company could hire.
Over time, as business in general embraced the concept of outsourcing more and more, RPO gained
favor among Human Resource management: not only did RPO reduce overhead costs from their
budgets but it also helped improve the company's competitive advantage in the labor market. As labor
markets became more and more competitive, RPO became more of an acceptable option. Furthermore,
through the advent in the 1980's and 1990's of human resources outsourcing (HRO) companies that
began taking on the processes associated with benefits, taxes, and payroll, companies began
recognizing that recruiting--a significant cost of HR--should also be considered for outsourcing. In the
early 2000's more companies began considering the outsourcing of recruitment for major portions of
their recruiting need.
There have been fundamental changes in the US labor market that serve to reinforce the use of RPO as
well. The labor market has become increasingly dynamic: workers today change employers more often
than in previous generations. De-regulated labor markets have also created a shift towards contract and
part-time labor and shorter work tenures. These trends increase recruitment activity and may encourage
the use of RPO. It should also be noted that even in slower economic times or higher unemployment,
RPO is still considered by companies to assist in an increasing need to screen through a larger
candidate pool.
Benefits.
RPO's promoters claim that the solution offers improvement in quality, cost, service and speed.
RPO providers claim that leveraging economies of scale enables them to offer recruitment processes
at lower cost while economies of scope allow them to operate as high-quality specialists. Those
economies of scale and scope arise from a larger staff of recruiters, databases of candidate resumes,
and investment in recruitment tools and networks.
RPO solutions are also claimed to change fixed investment costs into variable costs that vary with
fluctuation in recruitment activity. Companies may pay by transaction rather than by staff member,
thus avoiding under-utilization or forcing costly layoffs of recruitment staff when activity is low.
Problems.
If a company failed to define its overall recruitment strategy and hiring objectives, then any recruiting
program may fail to meet the company's needs. This is especially true for outsourced programs like
RPO: RPO can only succeed in the context of a well-defined corporate and staffing strategy.
As with any program, a company must manage its RPO activities. A company must provide initial
direction and continued monitoring to assure the desired results. Overall, providing guidance to
external activities can present a significant management challenge. Outsourcing of company processes
may fail or prove a poor organizational fit. Improperly implemented RPO could reduce the
effectiveness of recruitment.
The costs charged for outsourced recruitment transactions may total more than the cost of the internal
recruitment department.
RPO service providers may fail to provide the quality or volume of staff required by their customers.
Placing all recruitment in the hands of a single outside provider may discourage the competition that
would arise if multiple recruitment agencies were used.
An RPO solution may not work if the company's existing recruitment processes are performing poorly.
An RPO solution may not work if the service provider has inadequate recruitment processes or
procedures to work with the client.
RPO may not resolve difficulties that organizations have hiring staff when the organization is
perceived negatively by potential employees. This will instead require improved branding and an
adjustment of image. The perception is that very few RPOs can successfully integrate their client's
brand and therefore do not represent their client's brand as well as a retained search or internal
recruiting resource may drive brand representation and or marketing.
Further, most RPOs perform their staffing functions and service offsite, further disconnecting the
client's growth & recruiting strategy from the actual workforce within the client company. This is
important because during a period of rapid recruitment growth, one of the many positive effects that a
company typically enjoys is an increase in the workforce wellness or an overall workforce positivity of
sentiment of optimism that comes with personnel additions... this may be lessened with an offsite
recruiting function. Organizations with efficient hiring process that are viewed as employers of choice
by potential staff may stand to gain negligible benefits from RPO.
CRITICAL REQUIREMENTS
For any managed services model to work there are some critical requirements or must haves like
A. Executive sponsorship of the project. Any business model innovation requires the executive to
champion internal resistance into acceptance.
B. Clear Partnership Definition - A detailed and clear scope of work to be defined before
agreeing on to the terms. The managed services agreement will have the scope of work
documented & agreed upon.
C. Clarity on the role & the deliverables from the onsite resource & the same to be documented
& mutually agreed upon.
D. Mutually agreed expectations to be jotted in the agreement. Prepare a project plan with
defined recruitment process & get a consensus on the same.
E. Historical data to be made available so as to help prepare a project plan blocking all possible
loop holes and deciding on the key deliverables.
F. Its imperative for the success of this arrangement that we have a buy in from each person
involved in the project from Clients side and everyone understand that the intention is to meet
the numbers and nothing else.
irms (consultancies) as well as freelance consultants working independently. An organisation looks for various considerations an
Consultants expertise and experience (from how long has he/firm been in the
business)
Does the recruitment consultant have the requisite resources to complete the targets on
time?
Get the idea of the effectiveness and the services of the recruitment consultant from its
current and past clients.
Marketing skills
Wisdom
Exuberance
Ability to prioritise
Ambition
Resourcefulness
Diplomacy/ delicacy
Selecting the right recruitment consultant is essential for the effective recruitment
processes. A successful Recruitment consultant is someone who is determinative, focused,
and able to create opportunities for him, works harder and smarter than competitors and
continually set and achieve higher standards.
Types of RPO
Enterprise Solutions.
Or
End
to
End
Recruitment
Process
Outsourcing
This solution entails the recruitment process outsourcer assuming total responsibility of
the
recruitment
effort
or
the
entire
continuum.
The assumption may include all recruitment for all positions or it may include a segment
or segments of employment. For example, a company may outsource the entire continuum
for all sales positions but retain all other hiring. People Science believes the most
effective partnerships begin first with the assumption of a segment of employment.
Augmenting Solutions.
Augmenting RPO partners fill the gap of proficiency where an organization is lacking.
These services are wide ranging and providers typically fill a combination of areas such
as resume search and initial pre-screens and first round interviews.
Project RPO.
Project Recruitment Process Outsourcing occurs when an organization has a pressing
need to meet a substantial headcount increase and typically within a time constraint.
Project RPO can include augmentation or end to end services and typically has an
expected end date of services. Examples would include the opening of a new call center
or the need to increase headcount that is expected to stabilize.
BENEFITS OF RPO
Traditional recruiting methods can be expensive and are often
unproductive and unpredictable.
Whether you employ your own internal recruiters or utilize the services of staffing
agencies, most companies, at the expense of large commissions or placement fees,
do not obtain the results they expect from their recruiting function.
RPO Services eliminate the aforementioned inconsistencies by offering a simple,
effective, and alternative solution to recruiting needs.
No Infrastructure Costs.
Utilizing external recruiters allows to free up capital that can be better allocated
towards higher valued consulting activities. The RPO has their own state of the art
offices which are equipped with everything a recruiter would need to perform
his/her daily duties meaning a company dont have to pay a single rupee towards
providing a comfortable working environment for there own recruiters. RPO
provide workstations, computers, static-free phone lines, and a fast DSL
connection at no additional cost.
Improved Productivity.
Recruiters in India are highly technical and have tremendous experience and
Knowledge. (some of the Recruiters even have MBAs degree) and are able to
deliver many qualified resumes on a weekly basis. They can be trained to follow
the exact recruiting methodology of client and have the ability to match talented
professionals as per the requirement of companies. And because the price of 1
internal recruiter is equivalent to 2-3 external recruiters, companies can afford to
hire more recruiters at the same cost and increase productivity. The Bottom Line:
More Recruiters = More Productivity.
Advertising Posting.
RPO can post the advertisement in the leading newspaper about the vacancies of different
companies to attract the right talent as per the requirement.. The cost of the advertisement
can be share as per the agreement between the company and RPO. RPO should know how
to write a Job Advert copy and manipulate keywords to attract candidates who could
otherwise be heading towards competition.
Networking.
RPO can get the best out of social networking sites like LinkenIn, Orkut, and FaceBook.
Networking provides "never seen before" searching techniques and keys to unlock "hard
to find" candidates. RPO should know how to write compelling emails and letters to
engage cold candidates located on these sites, to convert them into hot prospects.
Communication.
Improved communication levels will help RPO to stand out from the crowd. By applying
world-class communication techniques in everything from emails, letters, job adverts to
blog posts will help the RPO to gain edge over its competitor.
Partial Outsourcing
Apart from the core recruitment activities, all other non-core activities such as
understanding the requirement, placing the position on various job boards, searching and
researching candidates, sorting profiles, screening CV and responses, and finally sourcing
you with the list of candidates that are the best match for the position make into partial
outsourcing process. These are precisely the activities that RPOs are most preferred.
Feature-set comparison between the two outsourcing model:
Partial RPO
High client/data security
Full RPO
Low client/data security
period
The below chart denotes break-up of requirement process in various sub-processes; quoting
approximate time consumed in each relevant sub-process. It is a complete study of all the core and
non-core activities included in the recruitment process.
Sub Process
Understanding of the requirement
Placing the job position on respective portals/domain
Sorting the profiles and sending mailers
Screening the responses as per job order
Calling and scheduling
Follow up and closing
% of Time
5%
5%
30%
30%
20%
10%
job.
Selection.
While the hiring decision remains with the recruiters, we can help to support managers in a
variety of ways to speed the hiring process. We can be involved in the process to call all the
short-listed candidates, schedule their interviews, follow-up with the hiring authorities and
finally close the position by sending offer/rejection mailers.
Advantages of RPO
1.Top notch Talent Pool.
Competition for the most talented individuals is increasing. Organizations need to secure the best
people quickly and efficiently to help them build competitive capability
Recruiting Manager:
Manages and is responsible for overall delivery to client including response rate, interview rate, fill
rate
etc.
Submittal Efficiency.
The first, submittal efficiency, is a measure of how well the submitted candidates fit against the
requisition profile. It is defined as the number of candidates interviewed divided by the total number of
candidates submitted. You would expect this number to be high. However, as in Thermodynamics, it
can be TOO high. If it is 100%, the recruiter is not pushing the edges of the requisition specifications,
which means you are probably missing good candidates.
However, if your submittal efficiency is too low, it indicates the hiring managers are spending too
much time reviewing resumes. This could be because the recruiter may be doing a poor job, or perhaps
the requisition has been poorly specified. As a whole, hiring managers and recruiters are doing well if
three of every four submittals make it to interviews (75% efficiency). Flashing-red-light warnings
should start to go off if less than one in two (50% efficiency) make it to interviews, meaning it is time
to investigate to determine problem areas.
Interview Efficiency.
Next, the interview efficiency is a measure of the hiring manager's screening process. It is defined as
the number of candidates who receive offers divided by the number of candidates interviewed. You
would expect this number to be lower than the submittal efficiency, since most people want to
interview several candidates for one offer. The goal is to shoot for 30% efficiency, which means your
organization is making offers to one out of every three to four interviewed candidates. If less than one
in six candidates interviewed actually receives an offer (16% efficiency), it should be an indicator that
it is time to investigate again. With low efficiencies there could be any number of problems, most of
which are issues in the screening process, including a hiring manager who is overly selective.
However, recruiters can be great assets during this phase because they can help out with scheduling
interviews, prepping candidates, gathering immediate interview feedback, and generally guiding the
process.
Offer Efficiency.
The third of the Big 3 is the offer efficiency, a measure of how many candidates actually accept your
offers and start working with you. It is calculated as the number of candidates accepting offers divided
by the total number of offers. Since the recruiters should be helping hiring managers extend offers that
will be accepted, as well as pre-closing the candidates, we expect this ratio to be high. If the process
yields 80% offer efficiency, or four out of five offers are accepted, you are doing well. Conversely, if
less than three in five offers are accepted (60% efficiency), then something in your recruiting processes
will need to be modified or addressed. Low offer efficiencies could mean the recruiter is doing a poor
job of pre-closing the candidate or negating counteroffers. Or perhaps the offers themselves are
undesirable, whether from a financial standpoint or on other dimensions, such as too much travel or an
undesirable work location. Also, as with submittal efficiencies, the offer efficiencies percentage can be
too high. If 100% of people accept your offers, perhaps you are offering too much money for the job.
The efficiency metrics are relatively easy to gather and calculate, and very helpful in monitoring the
quality of the recruiting process. By investigating the issues indicated by the efficiencies, it's possible
to identify potential problem areas in sufficient time to take corrective action and still make hires on
time.
Another benefit of the efficiency ratios is that by multiplying all three of them together, it's possible to
calculate the expected number of hires from the number of submittals, assisting your planning process.
For example, multiplying the lower bound of the "good" efficiencies (75% X 30% X 80%) = 18%,
which means you need to submit between five and six candidates to get one hire.
Conclusion
The present value of the recruitment process outsourcing industry (RPO) in India is estimated to
be $2.5 billion and it is expected to grow at the annual rate of 30-40 per cent for the next couple
of years. According to a recent survey, only 8-10 per cent of the Indian companies outsource
there recruitment processes. However, the number of companies outsourcing their recruitment
processes is increasing at a very fast rate and so is the percentage of their total recruitment
processes
being
outsourced.
Outsourcing organizations strive for providing cost saving benefits to their clients. One of the
major advantages to organizations, who outsource their recruitment process, is that it helps to
save up to as much as 40 per cent of their recruitment costs. With the experience, expertise and
the economies of scale of the third party, organizations are able to improve the quality of the
recruits and the speed of the whole process. Also, outsourcing enables the human resource
professionals of organizations to focus on the core and other HR and strategic issues.
Outsourcing also gives a structured approach to the whole process of recruitment, with the
ultimate power of decision making of recruiting with the organisation itself. The portion of the
recruitment cycle that is outsourced range from preparing job descriptions to arranging
interviews, the activities that consume almost 70 per cent of the time of the whole recruitment
process.
In India, the trend of outsourcing recruitment is also catching up fast. For example: Vodafone
outsources its recruitment activities to Alexander Mann Solutions (RPO service provider). Wipro
has outsourced its recruitment process to MeritTrac. Yes bank is also known to outsource 50 per
cent
of
its
recruitment
processes.
AKNOWLEDGEMENT
I HEREBY THANK MR.BANKIM DOSHI (DIRECTOR) TALENT CORNER HR SERVICES
PVT. LTD. TO GIVE ME AN OPPORTUNITY THAT LED ME TO VENTURE INTO AN
ENTIRELY NEW ARENA AND DISCOVER THE INTRICACIES OF RECRUITMENT
PROCESS OUTSOURCING WORLD. IT WAS DURING THIS PROJECT THAT I HAD TO
PRACTICE WHAT WAS PREACHED TO ME BY MY PROFESSORS. DURING THIS
JOURNEY I REALIZED HOW DIFFERENT IT IS TO PRACTICALLY IMPLEMENT THE
PRINCIPALS OF MANAGEMENT SUCCESSFULLY. THIS PROJECT IS DEDICATED TO
ALL THE PEOPLE FOR THEIR CONSISTENT SUPPORT AND GUIDANCE THAT MADE
THIS JOURNEY EASIER AND INTERSTING.
Bibliography
THAKUR INSTITUTE OF MANAGEMENT STUDIES & RESEARCH
Prsented by Safakat Ibrahim Agashiwala(PGDM 2008-2010)
32
1) Google Search
2) Mafoi consultancy services
3) Citihr.com