At GE, the human resources department found transaction work was creeping into the workday. They found themselves bogged down in adding people to Oracle, phoning candidates to schedule appointments, processing candidates’ expenses, and updating the company’s compliance folder. “We want our HR members to be strategic and work on more high-end projects,” says Mary Lou Gibson, a member of GE’s Technical Program and Center of Excellence Leader for Interns and Co-ops.
Outsourcing the routine details of recruiting allows GE’s HR department to stay strategic. “A company like GE feels employee selection is its core competency,” says Geoffrey M. Dubiski, Director of Operations, Yoh HR Solutions, GE’s outsourcing supplier. “We are GE’s volume engineer, screening and testing candidates for its managers.” Yoh literally presents resumes to GE managers and says, “You can hire them.”
Yoh ensures the candidates it presents to GE are all a good fit. It makes sure candidates have the requisite skill set and will work within the prescribed salary band. They must be ready to relocate if required. And Yoh makes sure they are a good cultural fit, too.
If GE is hiring an engineer, using another engineer to handle the entire process can be an expensive undertaking. “We interview ten people to get one good candidate,” says Dubiski. “That can eat up a significant chunk of an engineer’s work time. On a yearly basis, that adds up to a large amount of money.” Outsourcing the screening means the engineer gets into the picture only when there’s a candidate worthy of hire.
“Companies today are trying to do more with a limited amount of resources. Outsourcing the recruitment process allows the central HR staff to do more strategic recruiting tasks. HR specialists with a master’s degree don’t need to spend valuable time populating spreadsheets. Their job is to get the right people before the right managers. Then, they have to retain them. That’s HR’s core mission,” says Rob Brown, Gartner’s Research Director for Human Resources Outsourcing Worldwide.
RPOs Handle Federal Compliance
Yoh does more than find the right people for GE. It also maintains GE’s compliance folder, a federally mandated task that can have huge repercussions for American employers. The Office for Federal Contract Compliance and Programs (OFCCP) issued regulations that requires corporations to keep detailed records on how they select candidates. Corporations who fail to comply face fines and must operate under a conciliation agreement.
“Today employers have to document why they chose to put one candidate in front of managers but chose to eliminate another one,” says Dubiski. “Recruitment process outsourcing (RPO) suppliers are taking on this task and assuming the risk that goes with it.” “Yoh serves as our clearinghouse to make sure we are compliant,” says Gibson.
Technology now allows recruiters to look at three major criteria, which the OFCCP requires:
- The minimum qualifications for a job
- Critical skills and functions for that job
- Preferred criteria
In addition, employers must take into account affirmative-action requirements and diversity initiatives. “Outsourcers with best-in-class processes ensure their buyers are in compliance,” says Brown.
How RPO Works
Yoh specializes in RPO, one of the fast-growing sectors in human resources outsourcing (HRO). “If you look at recruiting in the pantheon of HR, it is still in its embryonic stages,” says Brown.
The Gartner analyst says buyers who use an RPO provider are looking for process improvement. “Most companies have home-grown recruitment processes. They looked for employees in their home market. Today, they have to search for candidates in multiple states or countries. Now they need an outsourcer who can bring in processes,” he explains.
GE uses Yoh to:
- Set up all interviews, including flights and hotels
- Collect all paperwork
- Provide weekly reports on all open positions
- Produce a list of all employees who are starting every Monday
- Calculate diversity metrics
“We get two-thirds of the hiring process out of the way,” says Dubiski. “That leaves GE’s HR department more time to work with the finalists.” Gibson says Yoh works closely with nine GE departments to implement their recruitment strategies. Yoh interviews between 1,500-4,000 candidates a year for each division.
GE’s HR departments selects the talent, completes performance management assessments, and forecasts talent needs in either expansion or reduction mode.
Gibson says her staff now has the time to concentrate on crucial, harder-to-find candidates. But Yoh even helps there. “If we have trouble finding a candidate and decide we don’t want to use a headhunter, which might cost us 20 percent of the salary, Yoh helps us search for the candidate,” says Gibson. “Since Yoh has such a huge network to draw from, this has been a huge help to us.” She says this “happens a lot.”
“We do the meat and potatoes as well as the hard-to-find recruiting for GE,” says Dubiski. He says Yoh scours network groups, mines the Internet, and does “a lot of smiling and dialing” to find appropriate candidates for GE. “We are good at finding the purple squirrel,” he adds.
Yoh keeps an extensive database. When GE needs a new engineer, Yoh reactivates its engineering file and contacts candidates it has already talked to. “In this demand-pull environment, we have to keep a constant pipeline of people,” says Dubiski.
Gibson views her recruitment process outsourcer “as an extension of the HR department and part of our team.”
Gibson says her HR team has a very low turnover rate. She attributes outsourcing tasks to Yoh as one reason why she’s able to keep her staff for the long term; they are excited about the more challenging work they do.
But RPO also lowers the turnover rate in GE’s other departments, too. A December 2005 article in the Harvard Business Review reports companies that recruit well end up having better employee retention.
“Yoh has been a great partner. If they say it’s possible, they always deliver,” says Gibson.
How Companies Use RPO
Dubiski says the RPO market has two distinct needs. Some companies just need recruitment help. Dubiski says they typically are large companies that already have efficient processes and workable technology.
A growing pool of buyers sits at the other end of the spectrum: companies that want the outsourcer to facilitate the entire recruitment process. This includes the standard outsourcing troika of people, process, and technology. The RPO provider also helps these companies with recruitment strategy and design, including how to brand the company to become the employer of choice.
RPO providers typically use technology to automate the process, particularly the reference checks. Yoh’s desktop automatically launches the background check. Yoh has an automated skills survey. “Automation allows my recruiters to spend more time with candidates,” says Dubiski. Yoh partners with ASPs for programs like RecruitMax, HireDesk, and Virtual Edge.
Automation also helps with the most time-consuming part of the process: candidate scheduling. Yoh has a Web portal; candidates select times themselves.
Last year Yoh facilitated 12,000 hires for its 14 clients. “We will exceed that this year,” Dubiski declares. Its most difficult search was for a molecular biologist for Givaudan, a fragrance and flavors manufacturer. He had to have the degree and a good nose.
Lessons from the Outsourcing Journal:
- Recruitment process outsourcing is the newest and fastest-growing segment of HRO.
- RPO providers help HR departments spend more time with candidates and do more strategic functions by doing two-thirds of the hiring work, which includes screening, testing, and background checks.
- Companies use RPO providers to find the purple squirrels, the hard-to-find employees. This saves them a headhunter charge. RPO providerss have worldwide contacts.
- Companies that use RPO want better recruitment processes.
- RPO providers help companies navigate the challenging waters of federal compliance.