<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=2059727120931052&amp;ev=PageView&amp;noscript=1">

Doubts About RPO

Posted by Colin Kingsbury

Find me on:

Jan 23, 2007 10:38:00 AM

Cross-posted on RecruitingBloggers.com

John Sumser gives a big thumbs-up to the concept of Recruitment Process Outsourcing in today's post. It's an idea I've flirted with before but in the end I don't believe it's likely to amount to anything close to the promises being made.

The first problem is that recruiting is a viciously cyclical business, as thestock price of Korn Ferry illustrates well. When things get tight companies freeze hiring, and the contractions can hit hard and fast. The vast rabble of 1-5 person staffing firms that blink in and out of business like fireflies on a summer night is arguably the perfect evolutionary response to such a market. They make hay while the sun shines and go into low-cost hibernation during the famines.

The second problem is that of regressing to the mean. In order to deliver scale, you need to enforce standardization. Payroll outsourcing can deliver services both better and cheaper because doing payroll for me and payroll for the guy next door is pretty much the same job. Staffing services like Manpower and the many mom-and-pops have long provided RPO to the segments of the market in which people are as interchangeable as payroll forms. I'm open but yet to be convinced that the same can be said for recruiting in general, and high-value recruiting in particular.

Of course, no one thought you could build a business delivering packages around the country overnight at a fraction of the cost of courier services until FedEx figured out how to do just that. There is an equally large prize awaiting for anyone who cracks the RPO code.