Roundtable: The Future of RPO
- Outsource Magazine
- On September 26, 2013
Earlier this year, Outsource got together with professionals from across the RPO space to film a unique video roundtable on ‘The Future of RPO’, in association with Kenexa and Futurestep. We thought it was time to present some of the insights from this compelling event: if you’re in the RPO space, or simply interested therein, you won’t want to miss this…
In order to get right to the heart of the big questions at play within RPO today it was immediately apparent that we needed input from right across the sourcing equation. Thus joining our suppliers – in the form of Kay Cooper, RPO Managing Director – EMEA, Kenexa Ltd, an IBM company; and Jeanne MacDonald, Chief Sales Officer, Futurestep, a Korn/Ferry company – in the film studio at the London Stock Exchange were representatives from the buy-side (Paul Awcock, Head of HR Transformation – Resourcing, Lloyds Banking Group) and the advisory space (John Willmott, CEO, NelsonHall) – all chaired, of course, by Outsource editor Jamie Liddell.
With our panellists having introduced themselves, matters began in earnest with a brief précis by John Willmott of current trends in the global RPO space and how we’ve got to where we are today: for most of the period since 2008, he said, it’s been a relatively straightforward space to research as a result of the constraints imposed by the financial crisis and its repercussions, with the top three business issues for organisations being taking cost out of the existing set-up; the need to keep existing customers and employees; and getting into new markets (primarily emerging economies). The last couple of years have seen a slight loosening of these constraints, with a growing focus on process optimisation and flexibility – and, above all, on getting the right talent – moving above cost reduction in the order of priority for many businesses, though cost of course remains a big issue.
Our providers were asked to comment on John’s findings and were, generally, in agreement. For Kay Cooper, one of the biggest trends was that globalisation, and the ability of her organisation to leverage its global footprint, was increasingly a driver of new business – again, with an eye to sourcing in emerging markets. Another big driver was big data and providers’ ability to use that data to improve predictability and reliability of hires – matching developments across the broader space.
Jeanne MacDonald concurred, and also highlighted the growing discussion of how to look at and measure quality of hire: “What do you know about candidates, what’s their potential? Because you can’t afford the risk of a mis-hire.”
Bringing the buy-side perspective into the conversation, Paul Awcock pointed out that the drivers for RPO vary but for him one huge aspect was embedding the idea of partnership into the organisation: “It’s about what the organisation needs to progress, and has to be in line with its values, its diversity… The whole DNA of the organisation needs to be understood. In my view the commercials happen; the deal for me is about the service delivery.” With regards to data, he said that it’s important to get not just data but useful data: “It’s about true MI that drills into process, into people, into all the stuff we need to be progressively growing together.”
The discussion then moved onto how successfully RPO was currently working for buyers, and the importance of the strength of the partnership which Awcock had alluded to: how far were the suppliers seeing their clients coming to them prepared to engage at the depth necessary to forge such a partnership? Kay Cooper agreed that in some cases it was still “my mess for less”; suppliers, she said, now had a greater responsibility to do due diligence into the customer’s culture and into how far along the HR journey they were, and to come prepared to create a partnership appropriate to that – and this was especially critical when dealing with geographically disparate customers requiring a variety of different partnership models.
“You get a good sense of how the engagement’s going to go depending on how ready the organisation is to give you that level of partnership up-front,” Cooper said, adding that a good indicator of this readiness is the kind of SLAs requested: traditional time-to-hire or CV-to-interview-ratio SLAs are a strong sign that the deeper relationship is some way down the line.
Jeanne MacDonald concurred that there was a great variety in partnership requirements and that this needed to be monitored right from the start of any engagement; her organisation looks at how their clients are buying globally to get an indication of the overall state of maturity. What does her ideal relationship look like? “Executive sponsorship; commitment; continuum of progress; and always forward-thinking and forward-looking.” Paul Awcock was then asked how important, in his experience, SLAs had proved compared with the “softer”, “emotional” side of a relationship: “The important thing for me is how you get there,” he replied. “There’s a journey between making the decision and go-live, and that bit in-between is how you get to what’s really important.” SLAs, he said, should become the monthly or quarterly “governance healthcheck”; ongoing conversation about how always to improve the service and the collaboration is critical above and beyond the framework provided by the SLAs themselves.
The conversation then turned to the importance of the retained team and what the buyer needed to put into place; John Willmott referred to trends in the broader outsourcing space, and the crucial nature of the retained team (and its communication with and connectivity to the rest of the business) and the challenge of taking experts within the business and turning them into strategic sourcing managers – “and that doesn’t always work!” “That’s a key role,” said Jeanne MacDonald. “I refer to that role as the ‘internal champion’… Change management cannot be underestimated… There are a lot of steps that both organisations need to take to see that change through.” The ‘internal champion’, she added, needs to be the right person, with executive support, and needs to bring innovation to the table: “Talking about what’s next and championing what’s next internally.”
This situation has been brought especially to the fore recently, John Willmott pointed out, with the rise of Global Business Services and the requirement for an ”owner” of sourcing towers within the buyer organisation; Paul Awcock described how in a previous role he created a small, core retained “anchor” team to act “almost as police” of the relationship – and went on to say, when considering the interaction between that police force and the provider, that “the relationships I enjoy most are where the partner challenges back: challenge the thinking, challenge the requests” as frequently the buyer can forget that it is a profit stream for its supplier and will keep requesting more and more add-ons which increase the complexity and cost of the relationship for the supplier.
Kay Cooper referred back to the importance of the retained team in terms of its ability to provide the supplier with the authority it requires to get deep within an organisation: “The trusted advisor that you select has to have access to the individuals within the client organisation that can make that happen… Where we are inhibited… is where that access is restricted.” Having a vendor manager – typically from a procurement background and very focussed on SLAs – in the ‘champion’ role makes it very difficult for the provider to be able to take the relationship to the next, required level.
“And to be clear,” Awcock pointed out, “that’s exactly what I had: that team were not about blocking… Their role was to be helpful in some of the administrative tasks that get in the way…. It is absolutely about having some internal capability that supports the RPO from an internal brand perspective.”
From there, the conversation moved onto benchmarking, and metrics, and the importance of understanding the challenges that are impacting across the piece and how best to transform a business with those challenges in mind. “One trend we’re seeing,” said Jeanne MacDonald, “is that RPO providers are being expected to bring more value-add to the table, more sophistication in services such as workforce planning, talent communities, employer branding – and all of those great buzzwords come with a price. It’s the responsibility of the RPO provider to bring that innovation, but within the scope of what the engagement is.” A lot of “excitement and enthusiasm around ‘luxury items’” on the part of the buyer needs to be tempered with a realistic understanding of what’s being bought at what cost.
At this point, the panel began to look at the importance of the CHRO and how that role was evolving – and the ramifications of that evolution for the RPO space – and thence to the broader evolution of HR generally, leveraging new technology – in particular social media, cloud and mobile – and new processes and opportunities emerging therefrom; changing skillsets for HR professionals; the integration of HR and IT; and what changes and developments the panel would like to see brought to their space over the next few years – among much else.
However, following the mantra of “always leave them wanting more”, in order to get the panel’s insights on the aforementioned topics, dear readers, you’ll have to check out the video itself! Fortunately, that’s very simple: merely go to http://thefutureofrpo.outsourcemagazine.co.uk to register to watch the entire video (and you can get a quick taster of the content at http://outsourcemagazine.co.uk/roundtable-the-future-of-rpo/ – if you’re reading this in digital format, just click those links to go straight through to the relevant pages… Enjoy!
This article originally appeared in Outsource magazine Issue #33 Autumn 2013.