From the August 2009 issue of Ceridian Connection.

Better than expected unemployment numbers released in the first week of August confirmed what many North American executives were already feeling. According to Mike Palmer, vice president, Global Talent Acquisition Practice for Ceridian, while there is still uncertainty about the economy, there is a pent-up demand for hiring employees as a result of many months of ongoing hiring freezes. And while employers indicate that they must make critical decisions about hiring, their recruiting departments have been decimated. Uncertain whether the current economic uptick may still be followed by peaks and valleys, employers are reluctant to restaff their recruiting teams. Therefore, they are exploring their options: rebuild their in-house recruiting capability, leverage staffing agencies or explore engaging a Recruitment Process Outsourcing (RPO) provider.

Organizations remain cautious about the economy
While financial markets have been up this summer, other leading economic indicators are flat or declining less quickly and are keeping many employers from taking on big projects or building back significant recruitment capacity. However, according to the latest Labor Market Outlook (LMO) survey by the Society for Human Resource Management (SHRM), HR professionals are more optimistic about the third quarter than they were in the first half of the year, according to Jennifer Schramm, SHRM's manager of Workplace Trends and Forecasting.

Employers want to adopt industry best practices
"Corporate recruiters are having a tougher time finding and identifying qualified job applicants, according to Todd Safferstone, managing director with the Corporate Executive Board (CEB) in Arlington, VA. A recent CEB study showed that the flood of applicants for every open position can make sourcing the right candidate more challenging than in flush economic times. "In many cases, recruiters and hiring managers are now working harder to identify qualified candidates, which is raising recruiting costs," Safferstone said.

Tony Campisi, Ceridian's Talent Acquisition manager, says that like other organizations who are weathering this difficult economic time, Ceridian has gone "back to the basics" to focus on efficiencies and effectiveness. "This includes creating a model that appropriately matches the business needs with the recruiting volume shifts we our experiencing. Although unemployment is high, recruiting top talent couldn't be more difficult today -- methods of attracting great talent have shifted from prior years. Ceridian's recruiting department has had to be creative and strategic in their recruiting methodologies to stay competitive. It is important that recruiters remain current with industry best practices and focus even more on building strong networks in order to proactively source, sell and attract top talent."

Companies must keep recruiting costs low
Staffing agencies charge up to 25 percent of the starting salary of a new employee to locate and recruit a strategic hire. Organizations looking to maintain or reduce expenses, and still feeling unsure of the direction of the economy for the remainder of the year, may not want to pay that high of a premium for the hires they do plan to make this year. Fees under an RPO arrangement are often much more in line with an industry average cost per hire. They are generally a fraction of the cost of a hire through a staffing agency. The clients of Ceridian's burgeoning RPO practice reported a dramatic reduction in third-party agency expenditures.

Palmer says that the prohibitive cost of engaging staffing agencies and the economic uncertainty ahead contribute to the significant interest in RPO. "We're hearing that companies have very limited capability to recruit because entire staffing departments have been workforce reduced," said Palmer. "RPO can operate as a powerful alternative to in-house recruiting at a fraction of the cost of staffing agencies."

Global business process outsourcing consultant firm NelsonHall believes that RPO will grow 3.5 percent this year and is heading toward 12 percent in 2010, according to lead outsourcing analyst Gary Bragar. "This is the time to test out RPO because most companies don't have the pressure to fill hundreds of positions right away," Bragar said. "Companies can start out with a smaller number of hires and assess how things are going before going full speed ahead."

Companies who use RPO outsource the tasks associated with recruiting (sourcing, screening, interview scheduling etc.), allowing HR the necessary time and resources to focus on strategic talent management concerns enabling the organization to achieve the corporation's financial targets. Supported by verifiable metrics from the RPO provider, HR is able to improve workforce planning efforts, deliver demonstrable return on investment from its recruitment spending and deliver exceptional talent to the organization.

An organization using RPO can scale its recruiting capability and recruiting costs accordingly. When the economy turns upward, and hiring needs increase, the RPO team is in place and can be quickly ramped up to meet the need.

A 2005 Watson Wyatt study revealed what HR professionals knew intuitively --a company's effective recruitment strategies are directly correlated to a stronger bottom line. Organizations will reap the financial benefits of great hiring practices.

Consider RPO as a long-term, strategic approach to building a strategic talent management function. The RPO partnership can relieve you of chores associated with recruitment and provide a fixed cost per hire backed by stringent service level agreements. The value of increased quality of candidates, reduced time to fill positions and improved time to productivity of new hires can directly impact your bottom line. Through the establishment of best practices presented by an RPO provider, organizations of all sizes are realizing the benefits of outsourcing their recruitment processes.

If you are ready to explore your options with RPO, visit Ceridian's Recruitment Process Outsourcing page for more information.