Truly global RPO: fantasy or fantastic?

Globalisation is making the world a smaller place for recruiters and clients alike. But does this mean that the days of the single global is any nearer? Colin Cottell investigates

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Helena Parry, market development director, Ochre House

Probably a year ago, we started to see the trend for companies to look for global RPO solutions

Despite becoming commonplace across much of the globe, we are still waiting for the first truly recruitment process outsourcing (RPO) deal that covers North America, Europe, Asia and Latin America, according to Rajesh Ranjan, research director at the Everest Group, a consultancy that studies the RPO market.

Ranjan says that of 117 major RPO deals signed in 2010, 10% were global (covering several continents), while 16% were regional and 74% local.

Such ’global deals’, were actually down by around 5% compared to the previous year, he explains, as multinationals were put off by the prospect of having to wait until the second year after implementation to realise the expected cost savings. However, Ranjan believes this decline will be short lived: “I expect to see that number grow to 20-25% over the next three to five years.” Yet he says he is not expecting to see “an explosion” in the number of global RPO deals, but “a gradual increase”.

He says the main driver for outsourcing recruitment on a global scale is to standardise processes and technology across different countries. Not only does this deliver economies of scale, it also offers international companies an effective way of consolidating high level information on how the recruitment function is performing, he explains. This is useful for global heads of recruitment and can help them to drive improvements.

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Zachary Misko, global director, KellyOGC

It is unrealistic to have one process that works globally … the model should be tailored to the specific region, position and industry

“Technology has removed the barriers to communication. It just takes a telephone call and you are placing talent,” says Amit Somaiya, global chief executive of IMS, an Empresaria Group operating company that provides back office recruitment services for staffing companies in the UK, US and Australia.

And with the cost of using an RPO firm based in India anything between 40% and 60% lower than using a UK-based RPO, it is no surprise that IMS has been growing at 30% year-on-year.

In a world of global communication and mobility of talent, the prospect of combining the advantages of an RPO with international coverage has become increasingly attractive to large corporates, says Helena Parry, market development director at Ochre House. “Probably a year ago, we started to see the trend for companies to look for global RPO solutions,” says Parry. That said, she estimates that no more than 10% of ’benchmark’ international companies are considering a single global RPO provider.

Zachary Misko, global director at KellyOGC, cites his own company’s RPO cross continent deal with GE, as one that “touches on all three regions [the Americas, Asia Pac and Europe]”. According to Misko, the deal covers the US, Canada, Latin America and China, as well as a less formal arrangement to supply 100-200 managers a year in Europe.

Accenture’s seven-year BPO deal with Unilever, including the provision of recruitment services and covering 23 countries, among them China, is another notable example.

Matthew Rodger, client services director, contingent workforce solutions at Alexander Mann Solutions (AMS), adds that using the same technology (applicant tracking system [ATS] or similar) allows recruiters in different territories to collaborate and work together in a much easier way. “We are seeing a lot of large corporate enterprises thinking about how they engage with prospective candidates on a global scale,” says Rodger - internal as well as external.

For Rodger, the mainattraction of a global solution for clients is wider reach across a global candidate marketplace and a recruitment function that is scaleable - ie that can flex according to recruitment volume.
However, this does not necessarily mean that a global solution is best for all clients. “It very much depends on the end user,” says Rodger. Some prefer to organise their recruitment regionally, say in Asia Pac. “There is no generic answer; some will and some won’t.”

Alain Proietti, talent acquisition director Europe at global pharmaceutical company Bristol-Myers Squibb, warns that clients must overcome challenges if global deals are to be successful. “The change management agenda is huge,” he says. It can take time to build trust between the hiring manger and the RPO based perhaps in a contact centre in another part of the world, particularly when RPO staff are not familiar with the core values and behaviours of the client company, he says.

Hiring mangers, used to working alongside an HR generalist, may also need to adjust to having to work more independently. “The challenge is to make the recruitment process more agile,” says Proietti.

Paul Maxin, Unilever’s global resourcing director, says the challenge for any recruitment function is to enhance the experience of the candidate, and the capability to deliver the employer brand proposition. The client also needs a supplier that helps it meet it strategic objectives. In the case of Unilever, he says this is rapid expansion of the business. “I think there is the potential for more global deals provided there is sufficient innovation, flexibility, process improvement, greater cost effectiveness and a candidate-centric approach to deliver great talent to an organisation,” says Maxin.

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Matthew Rodger, client services director, contingent workforce solutions, AMS

We are seeing a lot of large corporate enterprises thinking about how they engage with prospective candidates globally

It’s a tall order for any RPO to provide a global solution, says Tom Mason, managing director EMEA Allegistalent2, an alliance between business processing outsourcing firms Allegis Group, and Talent2, designed to provide international clients with a global RPO solution. Among the challenges, Mason points to cultural and language differences between countries and regions, as well as different employment laws. These exist even within single regions, such as Europe, never mind between different regions.

It is also vital that people in the local country concerned are consulted rather than having an RPO model imposed on them simply because it works in another part of the globe. However, despite these obstacles, Mason argues that the RPO model is evolving and that more global deals are the way forward.

Even behaviour of candidates in different countries can be a challenge, adds Ochre House’s Parry. “For example,” she says, “in Germany people don’t change their jobs regularly and they are very values driven.”

In contrast, in the Czech Republic, she says candidates send in their CVs indiscriminately for jobs even when they are not interested in them, forcing recruiters to spend time trying to gauge their genuine interest. “One size won’t fit all in Europe,” says Parry.

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Amit Somaiya, global chief executive of IMS

Technology has removed the barriers to communication. It just takes a telephone call and you are placing talent

“It’s the old adage: think globally act locally,” says Jacques Bossonney, Kenexa’s vice president RPO sales EMEA. “Recruiting in France is not the same as in India.”

And China can be particularly problematical, he adds. While the sheer size of the workforce makes China a good prospect for RPO, a provider that simply focuses on quantity, which might work in another part of the world, could ignore important cultural issues. “Sometimes, working as part of a team doesn’t come naturally in China,” he says.

Adapting to the differences in recruitment volume is another barrier to a ’one global RPO supplier’ approach. While recruitment volumes are massive in India and in South Asia, in Estonia, for example, numbers may be as few as 20, he says. “The service needs to be customised and flexible,” says Bossonney.

Misko argues that it is “unrealistic” to have one process that works globally. Instead, he describes a model in which the ATS “works right across the globe, with global RPO metrics and a common sourcing tool tailored to the specific region, position and industry”.

However, while he points to Kelly’s deal with GE, as an example of a single provider meeting the needs of a single client across several continents, many other RPOs have responded differently.

Instead of trying to provide a global solution on their own, many have reacted to the need to deliver locally, while offering international coverage, by partnering with RPOs in other regions. In many cases, this is where they themselves lack presence or are relatively weak. A case in point is Ochre House’s partnership with Pinstripe in the US and Career International in China.

Others RPO providers, such as SourceRight solutions with Hays, and IBM with Manpower, and AMS with The RightThing have adopted a similar strategy. Some, however, have chosen to integrate their local and regional RPO services, while others again have taken the acquisition route.

While partnerships are unlikely to provide a multinational with the same consistency of approach and service as a single RPO, there are “certain things you can do”, says Parry. In Ochre House’s case, this includes global governance boards, made up of staff from each of the RPOs, as well as from the client concerned.

The aim of these boards is to ensure that Ochre House and its partners in other regions adopt a similar methodology, technology and performance measures, and a common way to look at the client’s employer brand and employee brand proposition, says Parry.

There is some evidence of growing demand from large international companies for a single-vendor multi-region provider to meet their RPO requirements. However, as long as partnerships between RPOs provide the required consistency of service and the promised efficiency savings, it must be considered rather a moot point whether a global RPO service is provided by single company, through acquisitions or by RPOs working together.

Or as Bristol-Myers Squibb’s Proietti puts it rather succinctly: “You can have a global RPO but not necessarily by using just one RPO.”

Why global RPOs fail

  • ’One-size fits all’ approach
  • Lack of buy-in from the top
  • Rigid business model fails to take account of differences in culture, candidate behaviour, attraction methods etc
  • Absence of client global talent strategy
  • Lack of local expertise across all geographies
  • Failure to involve local people

Different strategies to achieve global RPO coverage

In 2008 AMS signed a partnership deal with US RPO provider The RightThing to provide RPO services to MedImmune, the global biologics unit of AstraZeneca. Under the agreement, The RightThing services MedImmune’s hiring needs from sourcing through verbal acceptance across the globe.

Some RPO firms, such as Futurestep (part of Korn/Ferry), are integrating their local/regional offerings into one global solution.

Other RPO providers have chosen acquisition. For example, Kenexa’s purchase of Quorum International to strengthen its reach in Europe, the Middle East, and Asia (EMEA).

Also AMS’s acquisition of Capital Consulting to enhance its ability to serve the European and Asian markets, and Adecco’s purchase of TalentTrack to buoy its
position in North America.

Source: Everest Group, ’RPO Annual Report’ and ’RPO Service Provider Landscape and Assessment Report’ which analysed 350 RPO deals

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