July 11, 2023
Companies tend to streamline during times of economic uncertainty, looking for ways to cut fixed costs without losing functionality. As a result, HR initiatives—including recruitment functions—are often the first to go.
Labor and labor-related costs can account for up to 70% of your total business expenses. It makes sense why companies reduce headcount, downsize recruiting teams, and slash budgets during turbulent economic periods. However, doing so can also cause difficulty in filling open roles and vacancies that result from natural turnover.
Thankfully, companies can lean on recruitment process outsourcing (RPO) to streamline their recruitment strategies and maximize ROI in uncertain times. But what is RPO? How does it work? And what can an RPO partner do for your company?
Since the jolting Covid-19–induced business downturn in 2020, business leaders have felt mounting pressure to reduce overhead expenses. The impact on recruiting has been particularly severe. Internal talent acquisition teams have had to do more with less just as the “war for talent” intensifies. Making matters worse, increasing economic uncertainty as we enter the second half of 2023 has caused companies to commence hiring freezes and layoffs of non-revenue producing staff [impact economic uncertainty will continue to have on recruitment processes.]
But cutting recruitment resources can make your company look uninviting and out of touch to candidates who have come to expect a “high touch” and efficient experience. Cuts in talent acquisition resources will likely deter top-talent candidates who would have made valuable team members; too much trimming can also hinder your company’s productivity.
Instead, consider how much of your recruitment cost is fixed and how much is variable. Fixed costs of internal resources are expensive to maintain as the number of new hires declines with economic conditions. These costs include full-time staff, advertising, management, tech, and so on.
On the other hand, variable recruitment costs tie into hiring volume. They can decline on a sliding scale as you dial back your hiring needs. During periods of economic uncertainty, you can easily convert your fixed costs to variable ones by leveraging recruitment process outsourcing (RPO).
RPO helps companies streamline recruitment processes while maximizing their return on investment (ROI). By relying on RPO recruitment experts, you can continue to have a robust, world-class recruiting effort and allocate your limited internal resources to your highest priorities.
Let’s unpack three ways RPO will help maximize ROI during times of economic uncertainty.
Given the importance of attracting and retaining top talent, a successful recruiting strategy must ensure that recruiting is an “always on” function that can scale rapidly up and down based on economic conditions.
While there is a strong rationale for companies to have some level of internal talent acquisition resources, the associated costs are fixed, difficult, and slow to scale. RPO, on the other hand—when properly structured—presents a variable cost “pay-for-performance" model, is highly scalable, and delivers a very strong ROI.
RPO is a robust solution for all market conditions. During periods of high growth, RPO companies can scale their efforts quickly to keep pace with clients’ needs. During periods of slowdown or high uncertainty, RPO, as a variable cost model, naturally results in declining costs as hiring needs diminish. What’s more: RPO partners continue to remain active in the employment market promoting the clients’ brands and value propositions as they seek replacements related to natural turnover.
Think of the RPO team as an extension of your internal processes. They take on hiring responsibilities while you remain in full control. In fact, you’re in more control regarding your business, as you’ve eliminated the need to grow or shrink recruitment head counts. Instead, your RPO partner scales up and down to meet fluctuations in hiring volumes.
Business leaders know they need to control hiring costs. At the same time, these costs are hard to pin down. Without accurate data, you’re fighting an uphill battle trying to analyze expenses.
RPO partners (in most cases) will provide signed cost-per-hire agreements over a contract period. As such, hiring costs won’t suddenly spike by external market forces—a real threat to in-house teams. The RPO model increases your cost visibility, while performance data on KPIs help quantify your ROI. Now you can alter your budgets based on outcomes—not inputs.
Data shows that filling an open position takes about 27 business days. When offer letters finally go out, 47% get declined because that candidate accepted an offer from someone else. Like you, these applicants are also facing economic uncertainty. They won’t wait around forever to hear back from your company.
Slow recruiting processes can cause you to miss the boat on top talent. When productivity demands require you to scale up, RPO can help you fill those positions within days instead of weeks.
The right RPO partner will work at your ideal speed to keep pace with the fast-moving times. Their expertise will improve TA functionalities to achieve desired results. Furthermore, your internal teams will be more likely to embrace change, knowing that an expert team of consultants—who have been there and back many times—is leading the charge.
RPO partners also scale with leading technology. They’ll combine cutting-edge innovation with the current best practices in candidate attraction and assessment. For example, they’ll constantly tweak candidate sourcing channels based on results. Doing so allows you to focus your budget instead of casting a broad—and expensive—net.
One common pitfall for many organizations is that they have a solid recruitment strategy, but need more resources to execute it. Their current TA team might be too small. Their HR department might not have the experience. Perhaps they’ve struck out several times with different staffing agencies.
RPO can solve those issues and more. During economic uncertainty, RPO will provide immediate access to skilled recruiting experts who can take and execute your strategy better than you ever thought possible. Here are a few business-critical tasks an RPO partner can perform for your company.
An RPO partner will examine every inch of your recruitment strategy, including current technologies, people, and processes.
They’ll study your company culture and dive into your growth goals. Once they know everything about you, they’ll lay out an effective recruitment plan to get you from start to finish.
RPO partners will help develop marketing strategies that connect your company with the candidate you’re looking for. They’ll help you:
Suitable candidates will arrive in droves once you fine-tune your messaging and aim it in the right direction. From there, all you need to do is choose.
RPO partners will help screen and assess your pool of potential hires. They can conduct pre-interviews to save you valuable time, only sending the best of the best to your office door.
Pre-screening ensures that only qualified candidates make it to the next stage. You’ll never waste time and money again on a fruitless interview.
Economic uncertainty has everyone on edge these days. Business leaders are looking for any means to cut costs and save money. One of the most effective solutions they can leverage is leaning on an RPO partner to manage recruitment needs—a partner like Source 2.
Source 2 can manage your entire recruitment funnel, ensuring you only receive the best for your open positions.
First, Source 2 fills the funnel with qualified candidates through target social media ads and programmatic marketing. From there, they engage and pre-screen candidates to find your ideal hires.
Finally, Source2 will conduct interviews and background checks before sending you (on average) three qualified, top-talent candidates. From there, the choice is yours!
Contact Source2 today to maximize your ROI with an industry-leading RPO partner.
Written By: Source2