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Critical Success Factors for Recruitment Process

Outsourcing (RPO)

Planning and Setting Goals

As the industry landscape for energy and power Recruitment Process Outsourcing can refer to the entire
changes, addressing key workforce-related recruiting process or key elements of it. As organizations are
challenges is a critical issue for organizations under intense pressure to continuously improve business
looking to gain the competitive advantage. Take execution and refocus on their core competencies, they must
for example the following statistics: objectively evaluate the components of the recruiting process
and determine what they do best internally, and what should be
• According to its March 2009 Report, the outsourced to an expert third party. A thorough due diligence
Energy Information Administration (EIA) is required to carefully weigh and compare various product and
predicts that approximately 259 gigawatts service options, contract terms, pricing scenarios, efficiencies
of new generating capacity will be required gained, and results achieved with the third party options as
compared to maintaining these interventions in house.
between 2007 and 2030. (Significantly
increased capacity)
When it comes to goal quantification, many organizations
rely too heavily on metrics related to a technology-enabled
• The total wind power generating capacity talent acquisition function, including time to fill, cost-of-hire,
jumped by 50% in 2008, according to the and total number of open positions. A common theme with
American Wind Energy Association (AWEA). these measures is that they are all internally focused on the
(Increased diversification in power generation) recruiting function and do not consider post-hire metrics
associated with actual on-the-job performance, and the
• Nearly one half of the U.S. power worker specific needs of the business. Therefore, an important part of
population will be retirement eligible within the goal setting process is to engage business line leaders and
the next five to ten years according to Carnegie strategic planners in a discussion about the business impacts
Mellon University’s Electricity Industry they find most crucial. Coupling the recruitment function
Center. (Increase in workforce demand) goals with the business unit goals will provide a more holistic
set of objectives for the recruitment outsourcing program.
• According to a 2006 report from Booz Allen
Three best practices for goal setting to consider are:
Hamilton, the number of students studying
petroleum engineering dropped to about 1,700 Optimize Workforce Planning
in 17 U.S. universities as compared to over To maximize the effectiveness of the client-RPO vendor
11,000 in 34 universities in 1993. (Decrease in relationship, the process needs to begin further upstream so as
workforce supply) to consider not only the short term but the long range recruiting
requirements. With vast infrastructure projects on the horizon,
and the emergence of new power subsectors, coupled with
It’s no wonder then, considering these troubling supply/ projected labor shortfalls, some organizations need to plan for
demand ratios, that talent acquisition has taken on a newfound hundreds if not thousands of new hires. This undertaking is
significance as a key organizational competency. Recruitment highly complex, takes a significant amount of resources, and
Process Outsourcing (RPO) can be a vital tool for talent must be tightly choreographed. Therefore, recruiting leaders
acquisition, staffing, and recruiting leaders to succeed in this must partner with human resources, strategic planning,
challenging environment. business line management, and RPO partners to ensure
process integrity and strengthen the recruitment supply chain.
The following best practices and benchmarks discuss how to Only with tight integration and strategic business planning
leverage RPO to gain a strategic advantage. will workforce planning be optimized. Key components of

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this process include: a forecast of future labor requirements global labor market tightens—combined with projected rapid
predicated on growth plans, new products and services, and growth within utilities, oil and gas, and alternative energy
technology and infrastructure build outs; the development of sectors—organizations must become very adept at promoting
competency models to identify the specific talent requirements their employer brand. Much like product marketing, recruiters
needed to support these initiatives; a determination of must effectively promote the employer brand, enhance name
where skill and talent gaps exist in consideration of both recognition, and educate candidates on the organization’s
new competencies and retirement and turnover; and the market position and presence, corporate culture, and
identification of RPO channels, resources, processes, and differentiators. Employer branding practices must extend to
interventions required to source the needed talent. all candidate touch points, resonate effectively through the
recruiting channels used by the target audience, be leveraged
Develop Recruiting and Business Metrics across all RPO partners, and be consistently reinforced.
The most impactful metrics are those derived from an
assessment of both the business requirements and opportunities Making Wise Recruitment Process
for process efficiencies, and those based on high integrity Technology Decisions
baseline measures. By engaging business line leaders, talent To support the process of attracting and retaining high-
acquisition managers can meld the business and recruiting goals quality talent, progressive organizations are evaluating or re-
and prioritize the most important metrics. For example, field evaluating their recruitment process technologies. In selecting
operations may be most interested in decreasing the time spent both a best-fit partner and the best-fit application, there are
by their hiring managers in the recruiting process. Service center three important trends that energy and power organizations
directors may be primarily concerned with reducing the total should note.
number of open positions within their centers. Headquarters
executives may see time to fill strategic positions, as a critical First, the recruitment process technology industry continues
measure and area for improvement. Those hiring sales personnel to undergo significant consolidation, making it perplexing and
or knowledge workers may be looking to improve speed to task potentially risky as a buyer. Secondly, more and more companies
/ competence / revenue. HR leaders may have a vested interest in this industry are focusing their efforts on integrated talent
in meeting compliance requirements, streamlining processes, management suites as opposed to talent acquisition systems.
reducing costs, and outsourcing Finally, with many vendors,
key components of the recruiting “Much like product marketing, there is a greater focus on new
process to best-of-breed vendors. recruiters must effectively promote system components rather than
Out of all of the measures, the employer brand, enhance name on ensuring the quality of hire.
perhaps two of the most common recognition, and educate candidates These trends are highlighted
are increasing retention and in terms of greater service,
on the organization’s market
reducing cost-per-hire. According improved reliability, and wider
position and presence, corporate
to the Aberdeen Group Report reaching automation; but do these
culture, and differentiators”
RPO in 2009: Driving Cost and ‘benefits’ best meet end-customer
Quality Improvements, those requirements? For organizations
organizations deemed best-in-class were able to cut cost-per- with the budget and time commitment required to implement
hire nearly in half (48%) through use of RPO. a full talent management suite, or who wish to work with the
largest market share providers, the answer may be yes. For many
Once the set of measures is determined, recruiting leaders will others, the answer requires further consideration.
be well-positioned to determine the type of RPO providers
best able to meet the organization’s strategic requirements. As the RPO industry consolidates, acquiring companies are
looking to reduce operating costs, quickly penetrate new
Diligently Market the Employer Brand and Become and markets, and add on components to their talent management
Employer of Choice solutions. It is not unusual for key product and industry
As a vast cross section of the energy and power workforce experts from the acquired company to leave the organization
reaches retirement eligibility, new college graduates become and take with them the accumulated knowledge and expertise
fastidious in their career / employer choices, and the overall they possess. In many instances, the acquired product is added

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to a portfolio that is only marginally related to the acquired Retention considerations

company’s original core competency. The movement towards With stiff competition for top talent among energy and power
offering integrated talent management suites is based on companies, as well as from other industries, retaining this
the perceived benefits of integrating multiple HR processes, talent becomes a critical concern. Consider these statistics:
placing the emphasis on software—as opposed to the The direct and indirect costs associated with premature
interventions that help acquire top talent. turnover average around $3,500 per employee for non-exempt
positions according to the Society of Human Resource
For organizations focusing on talent acquisition, the buy- side Management. Research from The Center for Creative
implications of these trends are clear. With the increased Leadership has shown that 66% of Senior Management hired
number of consolidations, there are less ‘brand-name’ options from outside a company fail in their first 18 months. And
available. The cast may change, product expertise may be according to the Bureau of Labor Statistics, the average tenure
diluted, and support and migration options may be limited. for 35-44 year olds is declining.
Purchasing a fully integrated talent management suite will
require a greater budget allocation, and can result in lengthy Ethics and Counterproductivity Risks
multi-phased implementation cycles. It could also mean The direct costs of a bad hire relating to ethical misconduct,
delaying the purchase to re-evaluate priorities and cost justify employee theft (including identify, intellectual property, and
the larger application. If the objective is to effectively recruit, physical assets), lost sales, workplace accidents, as well as
identify, and hire top talent—it the indirect costs associated with
could mean a long and winding “With stiff competition for top reputation and brand erosion
path with no end in sight. talent among energy and power are significant. Researchers
have found that in times of
companies, as well as from other
For those who require a talent economic uncertainty with
industries, retaining this talent
acquisition solution that enables mounting financial pressures on
becomes a critical concern”
them to compete for top talent job candidates and employees,
now, there are viable options, but these risks are exacerbated (85%
making the best decision requires careful consideration. When of business ethics and compliance professionals indicated
considering best-of-breed talent acquisition solutions: that the current economic downturn materially increases
the risk of ethics and compliance failures according to
• Assess the configurability of the solution to support the the Healthcare Compliance Association and Society of
recruiting workflow and meet both current and future Corporate Compliance and Ethics, 2009). The National
requirements Institute of Drug Abuse cites that employees at risk for illegal
• Determine if the vendor utilizes validated assessments to on-the-job substance use have been shown to have three
ensure quality of hire (a critical but often underemphasized times more sick days, three times the tardiness rate, three
consideration) times more accidents, and are five times more likely to file
• Ascertain the organization’s expertise in delivering workers’ compensation claims than individuals not engaging
measurable impact through better hiring decisions in illegal substance use ($1,500 average cost per drug-using
• Inquire about potential mergers and acquisitions the vendor employee).
may be involved with, and about their financial status
• Stand firm on the established requirements and guard against Achievement of Strategic Imperatives
being oversold on unneeded functionality As organizations pursue high-value activities in order to gain
a competitive advantage, it is critical that talent is properly
Ensuring Quality of Hire aligned with these activities—talent with the right mix of
With the current economic downturn, it is easy to assume that knowledge, skills, abilities, and personality traits. While on an
there is an abundance of high quality talent for the taking. While individual basis, mis-hires may not appear to have a strategic
that may in part be correct, there is also a lot of talent that may impact, on the aggregate, they may have negative and lasting
not be well-suited for an organization’s current and projected consequences related to lost business opportunities, decreased
talent requirements. And the business impact as a result of poor morale, strategic misdirection, poor service, and ethical lapses
talent fit can be quite significant. to name a few.

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The problem with many existing employee selection Booz Allen Hamilton (2006). Labour and skills crisis could stall
approaches is that they rely too heavily on subjective oil and gas boom ______________________________
http://www.boozallen.com/media/file/Labour_
methods of evaluating talent. In order to best ensure that and_Skills_Crisis.pdf
_____________

top talent is selected into the organization, recruiters must Saba, J., Martin K., & Madden, K. (2009). RPO in 2009: Driving
incorporate an objective means of assessing talent. A Cost and Quality Improvements The Aberdeen Group
critical RPO product that offers this objective evaluation is
Hutchison, E. (2008). Buyer Beware, HR Management ____
http://
validated talent assessments. Vangent’s research has found
www.hrmreport.com/article/Issue-10/Recruitment-AND-
____________________________________
that when utilizing (its) validated assessments, significant
Education/Buyer-Beware/
________________
and strategic impact can be achieved (e.g., turnover—33%
drop, tangible theft—23% reduction, Return on Investment Society of Human Resource Management www.shrm.org
(ROI)—12:1 ratio, workplace accidents—23% decrease, and Center for Creative Leadership www.ccl.org
accident costs—31% drop in average costs incurred due to Bureau of Labor Statistics www.bls.gov
accidents).
Jones, J. (2009) Organizational Ethics and Counterproductivity
Risks During an Economic Downturn: Causes and
When evaluating assessment providers consider the following:
Mitigation Vangent, Inc. http://www.vangent-hcm.com/
RegistrationForm/?assetId=81088F89-F6A1-9328-EFA61BBCE
_______________________________________
• Are assessments the core competency of the provider?
4B19270&referpage=%2Fdefault%2Findex%2Ecfc
_______________________________
• Are the assessments documented to be valid and reliable
selection instruments? Jones, J. (2008) 10 Megatrends Impacting Corporate Recruiting:
• Have the assessments demonstrated meaningful ROI? A Strategic Perspective Vangent, Inc. http://www.vangent-hcm.
• Can the assessments be mapped to existing core com/RegistrationForm/?assetId=558B3A77-1372-60E8-545A1A
competencies? 7FCF9E7327&referpage=%2Fdefault%2Findex%2Ecfc
__________________________________

• Can the assessments be utilized within an existing applicant Health Care Compliance Association & Society of Corporate
tracking system? Compliance and Ethics. (2009). Legal, Compliance, and Ethics
• How does the assessment provider keep current with Risk in the Recession. Minneapolis, MN: HCCA & SCCE
regulatory compliance requirements?
National Institute on Drug Abuse http://www.nida.nih.gov/
• Is the assessment provider a member of a reputable industry
association, and do they adhere to the association’s standards
and guidelines? About the Author
Paul Meskanick is the director of marketing
Taken together, these ideas can help form a framework for a of Vangent Inc.’s Human Capital business.
Recruitment Process Outsourcing program. While each RPO Vangent provides human capital products and
situation is unique, RPO products and relationships—like any services to thousands of clients to help them
other strategic decision—requires careful due diligence. And improve workforce acquisition, development,
as these relationships are strategic, an overarching goal should and advancement. Vangent’s RPO offerings include the
be to engage the RPO provider not as simply a vendor, but as a Vangent Talent Acquisition System, validated selection
critical supply chain partner. —EW assessments such as the Employee Safety Inventory, Personnel
Selection Inventory, Customer Service Applicant Inventory,
REFERENCES and System for Testing and Evaluation of Potential, as well
Energy Information Administration. (2009). Annual Energy as industrial skills and abilities tests. Vangent also provides
Outlook 2009 with Projections to 2030, http://www.eia.doe.gov/ leadership and organizational development tools as well
oiaf/aeo/electricity.html
_______________ as custom learning solutions. Paul can be reached at: paul.
[email protected], phone: 724-898-7855, website ____ www.
American Wind Energy Association (2009). http://www.awea.
vangent-hcm.com.
org/newsroom/releases/wind_energy_growth2008_27Jan09.html
________________________________________

L.B. Lave et al., The Aging Workforce: Electricity Industry —

Challenges and Solutions, Electr. J. (2007), doi: 10.1016/j. We encourage your feedback on this or any PennEnergyJOBS EnergyWork-
tej.2006.12.007 force article. Please send your comments to [email protected]

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