Supercharging recruitment processes has long been RPO’s calling card but with AI promising to transform recruitment, where does that leave the RPO model?
Recruitment Process Outsourcing (RPO) has long been positioned as a partner for internal HR teams, that can reduce time-consuming manual tasks, time to fill and costs, while freeing up HR teams to focus on the business.
Supercharging people analytics, anticipating workforce trends, and improving the quality of hires and candidate experience have long been RPO’s calling card.
But as AI surges into HR operations, touting many of these same benefits, the question is: in the age of AI, where does that leave the RPO model?
HRD spoke to Pip Eastman, Managing Director of APAC, for RPO and Market Leader for Financial Services for RPO globally, at Korn Ferry about the impact AI could have on RPO partnerships.
“I think AI is changing the way that all technology and automation is changing the way the recruitment process works,” Eastman told HRD.
“Whether that’s an outsourced function or an insourced function, it's fundamentally changing the way we work and that's really through all steps of the recruiting process from sourcing and screening to onboarding and has an impact on both the hiring manager and the candidate experience.
“I think there's opportunities … to boost speed, scale, flexibility and quality around them … regardless of how you do it.”
Opportunities and risks of AI
While AI is set to transform HR and the businesses it supports, no-one is sure yet what the end point will look like, leaving CHROs to navigate an uncertain path and with the risk of investing in AI tools or skills that may quickly become outdated.
“The investment in technology and the speed in which AI is changing the way that things are done and the different platforms that are available are moving at such a rapid rate, it's actually quite hard for organisations to think about where do I start, where do I embed it, where does it have the most value and impact for our organisation?,” Eastman said.
“And if the core components of AI for recruiting aren't your bread and butter, it's very hard to work out where you might invest.”
Eastman said her discussions with business leaders suggested organisations may decide to direct capital investment in technology, automation and AI into areas of the business that were unique to them and make a real difference to the bottom line.
“If they're going to have limited dollars to spend on capital expenditure, that's where they're going to go - to how that creates scalability, efficiency and profitability for their organisation,” she said.
Pressure on talent and acquisition teams
Talent and Acquisition teams are on the frontline of AI transformation in recruitment processes.
As candidates harness the power of AI, they are facing an avalanche of applications, and risks around fake candidates and work samples and AI being used during interviews.
At the same time, they are managing the expectations of businesses to deliver at speed the talent and skills to power AI transformation, productivity and cost savings.
Eastman believes this pressure on T&A teams to transform themselves at the same time as managing volatility in hiring volumes, the ability to scale up – and down – to meet demand, is a key consideration in the decision over external and internal resourcing of recruitment.
Cost benefits and ROI
Eastman said in some industry sectors organisations could be on their fifth generation RPO and have already realised the cost savings of outsourcing.
Beyond cost savings, Eastman says the measures of ROI on an RPO versus internal are innovation, and that currently means technology and AI, continuous improvement, efficiency and standardisation of the recruitment process to ensure a consistent employer value proposition.
“If you're an organisation that has a consumer brand to market, then that is absolutely paramount that regardless of whether you hire that person, the experience of that candidate is going to have a direct impact on how they see your consumer brand in the market," Eastman said.
“Good talent is always in high demand, regardless of what the economic conditions are. So, the employer value proposition and the brand to market and the consistency and the experience of that for a candidate become paramount.
“If that is disaggregated in an organisation because you don't have a standardised process, then that has risk to business in terms of bringing in good talent. I think that's also a really key consideration."
The ability to utilise market data and insights to develop a talent acquisition strategy should also be a consideration.
“I think for organisations, I've got to think about all of those things in terms of do I have it? If I don't have it, how do I invest in that? And then do I partner with somebody to bring that in or do I make that investment?" she said.
“I think at the heart is around quality of hiring.
"So for any organisation, regardless of how you do it, that's the end outcome which drives business performance."
