Posted tagged ‘Adecco’

RPO Generation 2.0 is Ready to Go

March 28, 2013
Linda Merritt, HRO Research Analyst, NelsonHall

Linda Merritt, HRO Research Analyst, NelsonHall

Recruitment Process Outsourcing (RPO) is one of the younger HRO service lines and it is both growing and maturing quickly. The March issue of HRO Today recognizes the emergence of RPO 2.0.  NelsonHall’s RPO specialist, Gary Bragar, would certainly agree. Gary’s October 2012 Targeting Recruitment Process Outsourcing market analysis highlighted many of the same developments in this rapidly growing HRO segment.

What is New in RPO 2.0?

The rapid growth and incorporation of social media for recruiting is a big part RPO 2.0, one that keeps pushing RPO to the leading edge of innovation in the HRO space.

RPO services are rapidly moving up the value chain, and changing client expectations is the key. While reducing the cost of service provision is always on the table, it is no longer the number one issue. Flexibility and scalability will always remain important as well, given how quickly hiring needs can change.

Today’s RPO 2.0 clients are looking for more value:

  • Improved quality of hires
  • The latest tools and technologies for social and mobile
  • Expertise in accessing talent pools and passive hires
  • Greater focus on candidate experience
  • Analytics and insights, in addition to metrics and reports
  • Improved retention
  • Access to advanced services including employment branding, talent management, talent engagement, and integration with workforce planning.

Clients Simply No Longer Want To Do It

In the last few years, many buyers reduced internal recruiting staff in line with the reduced volume of hires, and they do not want to rebuild and reinvest in the rapidly evolving technologies and advanced skill sets it takes to succeed in today’s competitive, social, mobile, and global recruitment process market.

Buyer Choice is Broad

For every large staffing company that does RPO including Adecco, Kelly, Manpower, and Randstad, there are smaller vendors that specialize in RPO such as Ochre House and Pinstripe.   Most leading RPO vendors of all sizes can offer services in most of the regions of the world as they have partnered and made acquisitions to make their footprints global.

Not long ago, major multi-process HRO (MPHRO) providers either did not provide end-to-end RPO or saw it taken out of contracts. Now, more MPHRO providers have full RPO services strong enough to be offered as standalone services including ADP, Aon Hewitt, Infosys, and IBM.

With RPO 2.0 You Can Have It All

While having it all may still be a bit aspirational for most of us, we are finding evidence that successful client / provider RPO partnerships can improve process efficiencies (e.g., reduce time to hire 20% to 50%), reduce the total cost of hire (often 20% to 30% or more), along with increasing hiring manager and candidate satisfaction.

Imagine what we can achieve with RPO 2.0!

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End-to-End RPO Unplugged

April 26, 2011

New contracts awarded by RPO specialists often say end-to-end services are provided, however many times only two or three recruitment services are actually stated in the press release, which begs the question what is end-to-end RPO?  Does it really include all RPO services to the client or is it just jargon to sound good?

In my recent RPO report, I’ve defined core RPO services and identified the full suite of RPO services.  Frankly, most vendors offer pretty much all services, but who is actually providing what?

Having worked for many years on the client side, I know how difficult it can be to work through public relations for an announcement. Ultimately, when you do, how much detail you are able to provide is another story. Congratulations to Adecco for not only winning an RPO contract last month with SI, a provider of systems engineering and integration services to the U.S. Intelligence Community, Department of Defense, and other agencies, but for also defining its full suite of RPO services that includes:

  • Applicant tracking system
  • Employment branding
  • Research
  • Talent market mapping
  • Social media sourcing strategy
  • Candidate pipelining
  • Direct, indirect, and Internet sourcing
  • Candidate screening, assessment, and selection
  • Job offer management
  • Onboarding
  • All recruitment administration.

Although you might say this is an end-to-end offering, Adecco does not call it that, but rather full lifecycle services.  I don’t really think it matters what you call it, but it’s better to spell out more than a couple of components when using robust terms.

Beyond the core services of sourcing, screening, assessment and selection, job offer, onboarding, and administration are emerging services, which include employment branding and the use of social media for recruiting. With the direction the world is headed in with the use of social media, you need to be “LinkedIn” to the appropriate social media communications to find the right talent in addition to the traditional methods such as job boards as they have not gone away yet.

There are an increasing number of clients who will look to an RPO provider for assistance in developing and communicating the right employment brand to attract and retain talent that will stay. Success in providing both basic and advanced end-to-end RPO services that deliver will also create client and vendor partnerships that last and prosper.

Gary Bragar, Lead HRO Analyst, NelsonHall

RPO Edging Toward Global

December 6, 2010

As a follow-on to my November 22 blog on the happenings at the recent HRO Europe Summit, a question posed by an audience member to me and my fellow RPO panelists Alexander Mann Solutions, SourceRight Solutions and a professor from Lancaster University deserves a deeper look. The question was, “We hear about RPO going global. How should global RPO be defined, as compared to how people are using this term, and is a shift occurring?”

NelsonHall defines global RPO as hiring in two or more continents. And in that context, on the panel I said very few global RPO contracts have been awarded to date. There have been some multi-country contracts awarded within a given region, and a few North American contracts that include some hires in Central, Latin and South America, but not much beyond that. But, in a “we’re getting there” moment, I was able to cite that just two days earlier: 1) FutureStep was awarded a truly global RPO contract by Cummins Inc. to provide RPO services in North America, Europe, Africa, Asia Pacific and South America; and 2) Allegis Group Services and Talent2, in partnership, were awarded a multi-continent RPO contract by an unnamed global financial services company to provide RPO in several locations in North America and Asia Pacific.

And just last week, Manpower was awarded a large global RPO contract by Rio Tinto to provide approximately 11,000 hires per year in North America (US, Canada), Asia Pacific (Australia, India), Europe (France, U.K.), Middle East, South Africa and South America. Granted, three is not a crowd when it comes to critical mass of contract type indicators, but I do think we’re finally beginning to see RPO edging toward global.

As I identified in my 2009 RPO report, one of RPO buyers’ top vendor selection criteria is the ability to provide global delivery, including in-region recruiters. Subsequently, my critical success factors recommendation was that if providers did not already have a global presence, it would be prudent to begin pursuing a global recruiting partnership with vendors that could provide recruiters in countries and regions where new hires are needed. Since then, we’ve seen a number of such partnerships emerge, including the December 3, 2010 announcement of Adecco and the Beijing Foreign Enterprise Human Resources Company (FESCO) establishing a joint venture to take advantage of the emerging markets growth potential in China, and provide global RPO to multi-national corporations based in China per Adecco’s presence in 60 countries.

I believe we will see continued demand by global clients to have one provider manage all of their recruitment needs, and that, in turn, we will see many more global RPO contracts signed in 2011. However, getting buy-in and cooperation from business leaders in local countries is a massive change management issue requiring significant attention, care and effort. Providers can help prospective clients during due diligence to quantify current costs, time to hire, hiring manager satisfaction, attrition and other metrics to help make the case. 

Buyers and providers will be watching the success of these new global deals; and if they are indeed successful, they will create the impetus for increased global RPO demand in 2011 and beyond.

Gary Bragar, Lead HRO Analyst, NelsonHall

“What a Difference a Day (plus 364) Makes” for Staffing and RPO

May 13, 2010

As I read Kelly Services’ Q1 2010 financial results yesterday, the song “What a Difference a Day Makes” popped into my mind. Add 364 more days (although for service providers it likely felt more like 2548 in dog days) and in year-over-year financials comparisons, staffing and RPO providers are finally seeing some rays of sunshine. And these rays – even though they don’t yet call for sun block with a 30 SFP – indicate a strengthening economy and thus good news for everyone.

While wider HRO results were mostly flat in Q1 2010, staffing and RPO provider revenues were mostly up. For example, in year-over-year comparisons, providers including SeatonCorp, Manpower, Kelly Services, SFN Group, Adecco and Kenexa all reported positive growth, with overall revenue growth ranging from single digits to a high of mid 20 percent. And specifically in the RPO space, KellyOCG’s revenue was up 13.5 percent and SourceRight Solutions’ was up 13.4 percent.

However, not all providers saw positive growth. For example, Netherlands-based Randstad’s revenues were nearly flat (down 0.5 percent) in Q1 2010 and Q1 2009 comparisons. But the company did experience strong year-over-year improvement, as its revenues decreased 28 percent in Q1 2009. Randstad’s results, as well as those from some other providers which experienced overall revenue increases in Q1 2010, indicate that staffing growth has not yet returned across Europe. Yet similar to other staffing providers, Randstad saw growth return in the U.S., Latin America and Australia.

The providers’ Q1 financial results confirm the findings of NelsonHall’s recently-released HRO Confidence Index, referenced in my April 22 blog, in which providers cited RPO revenue growth of 4.6 and 4.4 pipeline growth on a 1-5 scale.

Q2 2010 is also off to a good start. For example, KellyOCG was awarded a multi-year RPO contract by Novartis Pharma France on April 21, and Manpower and Vietnam’s Techcombank entered into a two-year end-to-end (including job profiling, on-boarding and staff development) RPO contract.

While I don’t believe we will see pre-recession hiring levels in 2010, I feel that the tide has turned and we will continue to see quarterly year-on-year growth in staffing and RPO for the remainder of 2010.

Gary Bragar, Lead HRO Analyst, NelsonHall

An RPO and MSP Combo: The Best of Both Worlds

April 16, 2010

As I read through HRO Today magazine’s recently published Baker’s Dozen Top Managed Service Program (MSP) providers, it struck me positively to see many companies such as Manpower Business Solutions, Hays, Allegis Group Services, SourceRight Solutions and Adecco on the list. That’s because those providers are also recruitment process outsourcing (RPO) providers.

In different mixes and offerings, the MSP solutions include contingent workforce management, program and vendor management, temporary staffing, employee process management and other services.

There are two primary reasons why provision of both RPO and MSP solutions from the same vendor is valuable to the marketplace.

Flexible Staffing Solutions from a Single Vendor

As NelsonHall and many others have written about quite a bit lately, permanent recruiting has largely been on hold due to the recession, replaced with utilization of temporary hires and contingent workforces. As we’ve also written about numerous times, HRO buyers are increasingly opting for service delivery consolidated under the aegis of a single provider. Thus, the ability to tailor multiple recruiting solutions to meet client’s evolving needs results in a win-win for both providers and buyers.

Employee Attrition

Per a Manpower study released earlier this week, 80 percent of 2,000 North American hiring managers surveyed believe less than five percent of their employees will voluntarily leave the company in 2010. But a survey from Manpower subsidiary Right Management revealed 60 percent of employees intend to pursue new jobs if there is improvement in the economy this year. This huge delta aside for a moment…while it’s not feasible that more than half of employees will leave their current jobs, what if it is more than the five percent employers expect? A contingent workforce must be leveraged simply to keep the business running.   

The bottom line is that vendors and buyers both gain value from a workforce solution that meets clients’ dynamically changing needs, whether it be for temporary or contingent employees through an MSP offering or permanent employees via RPO. Buy-side HR executives, are you ready to meet your company’s current and future workforce needs?

Gary Bragar, Lead HRO Analyst, NelsonHall

Can RPO Help Ease Chinese and Japanese Employees’ “I Can’t Get No Satisfaction” Woes?

March 25, 2010

What can employers in China and Japan learn from those in Denmark, Norway and Canada? Seems quite a bit, according to the results of staffing and recruiting provider Randstad’s new global Workmonitor survey released earlier this month. The online survey, administered by a third-party among minimum 400 full-time employees per country, found that only six percent of Chinese employees and seven percent of Japanese employees are “very satisfied” with their current employer, compared to more than 35 percent for those in Denmark, Norway and Canada. (FYI – The “very satisfied” levels for U.K., Australia and the U.S. were 20 percent, 24 percent and 31 percent, respectively.)

While Asia Pacific has been slower than other world regions to embrace HRO, NelsonHall research forecasts the Asia Pacific region to have the highest growth rate of HRO adoption over the next five years. Given the sobering results from the Randstad survey, China- and Japan-based employers may be well served by considering recruitment process outsourcing (RPO) services sooner than later, especially when the contracts include talent management, employee development and retention solution components. Although RPO itself is not an end-all solution to improving employee satisfaction, if it includes the aforementioned services, it will go a long way toward helping to improve it!

We’ve already seen some evidence of RPO activity in China including the Talent2/VivaKi China contract signed in November 2009, and the April 2009-announced partnership between Kenexa and R&J Management Consultants, which resulted in the creation of Shanghai Kenexa. And a variety of other RPO providers, including Manpower, Hays, Futurestep, Adecco, Hudson and Alexander Mann, are stepping up their delivery capabilities and reach into the Asia Pacific market.

My advice to RPO providers servicing (or considering doing so) the Asia Pacific region, especially China and Japan: present your local market knowledge and delivery capabilities, not only in recruiting but also in retention-related activities such as expanded on-boarding processes with linkage to learning, reaching out to new hires at periodic intervals, conducting regular employee satisfaction surveys, conducting exit interviews to find out why people are leaving and then feeding those results with recommendations to senior leaders for action, etc.

My advice to China- and Japan-based employers: with the delicate state of your workforces’ satisfaction levels, robust on-boarding, performance management, talent management, employee development and other retention solutions are very important – as they are for employers around the world. It could be highly advantageous to leverage the expertise of an RPO provider to support you in these areas.

Gary Bragar, Lead HRO Analyst, NelsonHall

Employment Optimism: Clear Signs of Increase in Temp-to-Perm and New Hires

March 10, 2010

According to a USA Today article published on March 8, 2010, a growing number of businesses are converting temporary workers to permanent employees, signaling the start of an improved job market. According to the article, temporary jobs increased by 48,000 in February 2010 to two million, and are up 284,000 since September 2009. And an increase in temporary hiring is a usually a leading indicator that permanent hiring will be on the rise.

In a normal economy, one in three temporary workers is ultimately made a full time employee. That ratio plunged to well under 10 percent during the recession, according to Jonas Prising, head of Manpower’s Americas division. But about 30 percent of the temporary workers placed by Employco’s Carlisle Staffing unit have become permanent hires in recent months. That’s up from 2 percent during the downturn. And Tig Gilliam, CEO of Adecco North America, stated the company has recently seen a whopping 50 percent rise in its temporary placements who go full time. All this bodes well for temporary workers.

In terms of new hires, a Manpower Employment Outlook Survey of 18,000 U.S. employers revealed that 16 percent anticipate increasing staff levels in 2Q 2010, 73 percent expect to keep staffing levels the same, and eight percent expect a decrease. These findings net an increase of eight percent and +five percent when seasonally adjusted. And approximately half the firms surveyed by the Society for Human Resource Management (SHRM) are boosting hiring in March 2010, the most in two years. While these findings don’t signal a rousingly positive increase, any increase in today’s job market is good. 

Globally, there is much more optimism according to the Manpower survey. Employers in most job markets expect hiring levels in 2Q 2010 to at least equal (or in some cases exceed) those in the same period last year, signaling a long-time-in-coming return to positive job growth. The Asia Pacific region has the strongest job outlook, led by India and Taiwan. While the outlook for job growth in the Americas is modest, Europe is mixed. Although European companies may not be ready to return to year-over-year-growth, the view is that hiring will at least keep pace with the Q4 2009.

What does this indication of hiring increases mean for the recruitment process outsourcing (RPO) industry? Not reason yet for providers to jump for joy, but certainly good news for them as many RPO contracts have been restructured to pay on a more variable basis, i.e., per hire. And going back to statements targeted to potential RPO buyers in a couple of my previous blogs…with staffing levels in many cases cut to the bone and with employee satisfaction at extraordinary low levels, if companies don’t step up their hiring activity – and obviously RPO can assist here – at least modestly, quality of work will suffer and top performers will jump ship to better opportunities on dry land.

Gary Bragar, Lead HRO Analyst, NelsonHall