Getting Started with an RPO Solution in China

Today, it’s a common buzz word for global organizations that “China is the growth hub and my company is investing in China”. Given the increasing focus on the China market, business leaders are mandated with the mission to expedite the growth here. Your organization can very well be one of them. As a leader in human resources or recruitment function, you may find your team overwhelmed with quite a number of challenges. Just to list a few quotes we have heard from our clients:

  • Costs: We used to have a big recruitment budget for the China market, but we are asked to make our hiring more cost effective given the uncertainty at the moment; we have too many vendors.
  • Sourcing: We are in a niche industry sector and we have already gone through the entire talent pool over and over again. We have to hire more people. Where can I get more candidates?
  • Time: Vacancies have been open for a long time. We don’t have enough resources to handle so many positions. Our recruitment agencies only pick the easy to fill jobs to work on. I don’t see the commitment from them.
  • Attrition: The market is too hot. People tend to stay only for a year or two, and leave for higher salary and bigger titles. Our sales force has a turnover as high as 40%.
  • Quality of Hire: Our line managers are new and they don’t know how to interview candidates properly. It is too difficult to find qualified candidates from 2nd and 3rd tier cities.
  • Metrics and reporting: We do have an applicant tracking system but we don’t seem to be using it to its full function. It is hard for us to consolidate all the recruitment costs. We don’t have a benchmark cycle time.
  • Scalability: We cannot keep pace with the growth demands of our business. We don’t have enough recruiters to handle the volume of hires. We don’t have the headcount for more recruiters as we are not sure if we have to let them go should the hiring peak be over.

Do any of these sound familiar to you?

If yes, Recruitment Process Outsourcing (RPO) might be an answer to address the above challenges.

What is RPO exactly?

By definition, RPO is the process of outsourcing all or part of a client’s recruitment function to a third party recruitment specialist called an “RPO” (Recruitment Process Outsource). This model embeds dedicated recruiter(s) inside the organization’s business aligned to hiring managers. They manage the end to end process from recruitment forecasting, to sourcing, assessment, placement, on-boarding and reporting. The solution is enabled by clearly defined processes, service level agreements, and online recruitment technology that streamlines the workflow, tracks candidates through the process, provides reports and houses all candidates in a client owned “talent pool”. Benefits relate to cost reduction and increased service, quality, speed, and compliance.

Our RPO solution in China builds around clients’ short-term and long-term talent needs. By having the onsite team live and breathe the client’s culture and business, our recruiters have an in-depth understanding of the business strategy, the supporting talent strategy, talent success profiles, and even hiring managers’ styles. This enables us to formulate a compelling employee value proposition to take to the market, and tap into a range of supplemental channels to source the right candidates, such as social media (LinkedIn, micro-blogs, Ushi, industrial online forums, BBS), open web sourcing, specialist job boards, tradeshows, candidate networks, alumni, university network, international markets, data mining, and so on, that are tailored to the specific job roles and talent category specific to the sector and geographic locations. Our integrated talent assessment tools can also help clients to enhance selection quality, new hire management and development, assess internal talent to facilitate internal mobility, as well as retention success. Furthermore, with the understanding of client’s business and talent market, the onsite team can also manage the client’s talent pool in a more effective and proactive way by taking into consideration the long-term talent pipeline and effective candidate relationship management.

However, before you jump right into the conclusion that “yes we should outsource recruitment” you need to ask a few critical questions within your organization to evaluate the need and then make an informed decision of whether an RPO solution is right for you.

  1. Does outsourcing the recruitment function/process align well with your organization’s business needs/strategy? Plain and simple, if this choice does not present a compelling strategic rationale based on your competitive market priorities, don’t do it.
  2. Will recruitment process outsourcing truly improve your business performance? In addition to cost efficiency, you should establish other performance metrics with your business partner to demonstrate that this arrangement helps you better source and attract the right talent from related talent segments and geographic locations (such as 2nd and 3rd tier cities), speed up time to hire, keep your employer brand consistent and effective, leverage internal mobility, and increase employment engagement and retention.
  3. How can you understand and control costs? It is important for you to understand the entire cost structure, all of its components and how an entire package of products, services and management fees may be bundled together.
  4. Are the financial projections accurate? Take a critical look at any numbers submitted by the RPO provider. Look for assumptions, oversimplifications or just plain misleading figures that may adversely impact your overall cost/fees. There are quite a number of “RPO” providers in the China market who can come in with very low management fees but they are actually just a window to pass jobs to their agency business, which really means you are just having another layer of cost.
  5. Will this arrangement still enable you to have the necessary internal human resource skills and expertise needed in any organization? Your business partner should be open to transferring all knowledge, and turning back over the people and processes to your internal team once a best-practice operation is established and running smoothly.
  6. Who will ultimately manage the financial and performance metrics of the contract? People, processes and technology combine to deliver for a RPO arrangement. It is essential for the company’s internal leadership to maintain management oversight of any outsourcing initiative.
  7. What are the cultural ramifications of outsourcing my recruitment function? Understanding how your managers and broader employee base are going to react to this massive operational change is critical. It is essential that your RPO business partner has change management expertise. An RPO provider who has been there/done that has experienced most of the potential pitfalls and know ways to best handle to ensure organizational support and buy in at all levels.
  8. Is there an escape clause in the deal or protection in place for when business conditions change? Depending on the roles and specific sector, there are also hiring peaks and lows for a lot of organizations in China especially for those with ambitious growth plans. You need to make sure you are not locked into a long-term contract or deal with little or no flexibility to alter scope or completely withdraw over time. Here again, making sure that there is a shared risk model for operational costs when hiring demands change is one way to help ensure some of this protection.

If all the above questions are carefully evaluated and the answers are positive, you will be confident that an RPO model will bring you values and it is worthwhile to further explore and ultimately start an RPO solution to support your business growth in China.

Learn how Hudson RPO can help your recruiting solutions in China. Contact us today.

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