Why RPO decisions take more time
It now often takes 12 months to select and appoint an RPO partner in mature markets, compared with an average of six to nine months in 2012. No one is dragging their heels. It’s just that the increasing complexity and breadth of coverage of RPO deals means there’s more to take into account.
1. Greater enquiry and due diligence
Procurement departments are increasingly using workshops - which can each last up to 10 days - to find out about potential partners’ expertise in more detail. They can cover areas such as legal, IT, integration and partnerships, with questions posed along the following lines:
“We have a temporary workforce in multiple locations/countries, what do you recommend to control costs further?”
"We seek greater control over recruitment and consistency of processes in our Polish location where we currently have a local recruitment consultancy providing a mini-managed service provider (MSP) service. What are your recommendations?”
“We retain recruitment in-house at a certain level in a partially outsourced solution and would like to learn how you intend to partner across the business with these divisions.”
“What recruitment technology touch points are in place throughout the organisation and how can seamless integration be achieved?”
In some cases, second or third generation RPO clients use these opportunities to benchmark service providers or validate the service they’re currently receiving, as a check on whether it’s worth the significant upheaval of changing provider.
2. More commercial negotiation
Most negotiation processes contain up to three rounds of pricing before preferred bidder stage is reached. This is often due to the scope of the RPO changing during the RFP process - and even then a supplier might be asked to completely refine pricing once again after being chosen.
3. Multiple legal jurisdictions add complexity
To draw up contracts between client, RPO, vendors and temporary workforces in different countries often requires external legal counsel. As organisations need to allow for increasingly complex legal infrastructures for their workforces, such as auto enrolment in the UK and Agency Worker Regulations (AWR) across Europe for non-permanent workers, the implementation and operational management of deals can become equally complex. For one client alone, Resource Solutions manages more than 50 different pay structures through technology. That’s a lot of due diligence to ensure you’ve got right before you go live with a service.
4. Increased formality involving more stakeholders
As RPO has become more successful, more stakeholders have become involved in the selection and implementation process on the client side. Rather than just HR and procurement teams, now it’s also the business/line management, IT, security, finance and legal teams that take part and maintain a relationship with the RPO into the life of the partnership. Whereas a single client sponsor in HR would have been responsible for the implementation process a few years ago, now clients often provide dedicated project managers and co-ordinators, whose responsibilities include managing communications with the sometimes large groups of stakeholders.
Technology integration has also become more complex. Businesses now aim for more automated connectivity among a greater number of systems, rather than the accepted norm just a few years ago of double entry or semi-automated file feeds. With more systems and a greater level of formality governing them, security and penetration testing phases often run between six and 18 weeks.