Why RPO’s don’t work and won’t work in niche sectors

by Giles Hampson

Many business leaders I deal with pride themselves on promoting individuals through their company, developing their own successors, strengthening their country brand by having individuals promoted to global roles, my feedback is always the same.

“Give yourself the best chance of doing this by attracting the right talent in the first place!”

As a headhunter who has worked exclusively in the healthcare and medical devices sector for most of the last decade, it still amazes me how so many company directors will put talent acquisition and retention towards the top of their strategic imperatives, but near the bottom of their budget allocation priorities.

I have seen vast changes in our client base over the last few years and countless “disruptive technologies” and “world-class processes” that have threatened to make the recruitment industry “redundant” – I have also seen companies gravitating to these innovations with limited success, yet we at RMG are very much growing as we are deeply embedded in our space and are thriving in an industry where top-level talent is tough to attract.

The most prevalent recent “silver bullet” is that of Recruitment Process Outsourcing (RPO). Despite being around for over 30 years as an offering, I have only seen the ‘RPO model’ come into the healthcare market at executive level over the last 4-5 years.

The RPO model is almost entirely pitched on a cost reduction basis, with a set contract that covers the salaries of in-house staff, service costs and management costs.

Whilst this model can provide cost savings for high-volume, low-skilled transactional recruitment, it splits at the seams when operating in a niche market with chronic skill shortages. I can speak from recent experience of seeing historical clients “come out of the woodwork” when the reality of low-cost recruitment has undesirable impacts such as poor talent retention, longer times to hire and the constant feeling that they are getting the “best of a bad bunch” rather than the very best talent in the marketplace.

The question that you must ask yourself as a leader is….

“Is recruitment and talent acquisition seen as an investment or a cost?”

The point that is being missed is one of simple market economics;

The above points are crude comparisons but the question comes down to access – if you are serious about accessing the very best taken in the market, and pooling that talent over the longer term, you need to employ a specialist service provider who is best placed to deliver exactly what you need, not just what is available.

Put very crudely, in-house delivery teams are recruitment consultants who do not have to ‘sell’……….

Q – Why is this relevant?

A – Selling a message about your company appropriately to an individual you wish to attract is the fundamental first base in any successful hire.

The RPO model has a fabulous theory but so often fails due to poor execution - the proverbial surface isn’t being scratched, and the results are plain for all to see.

If you are reading this and you operate in the medical devices or healthcare market then I hope I have provided some food for thought.

If you operate in other niche markets, I encourage you to take a step back, take a realistic appraisal of your market and the availability and access to talent, and actively seek out a dedicated partner who “knows your industry” and is able to execute a plan to deliver the talent that matches your aspirations.

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