Recruitment Process Outsourcing (RPO) is a form of business process outsourcing, more specifically outsourcing of the hiring and talent acquisition process. It is a long-term engagement, typically 12+ months. The financial risk decreases significantly with the more openings that need to be filled, yet cost savings and successful hires should not be the only ways clients and providers measure RPO success.
So how should you measure RPO success? Here are the top 4 KPIs you should be tracking during your RPO engagement.
Want a bigger list? Download our Measuring RPO Success white paper for a complete breakdown.
1. Time to Fill
Time to Fill is the amount of days a position is open before a candidate is placed: the clock starts ticking as soon as the job is open and stops when the client has a signed offer and a start date scheduled.
A lower Time to Fill indicates the talent acquisition team is identifying high quality candidates quickly. An RPO provider, which consists of a team of recruiters, researchers, marketers and the like, should be able to find, screen and submit candidates to your organization's hiring authorities faster and more efficiently than a single internal talent acquisition manager.
While the responsibility to manage this timing should fall onto the RPO provider's shoulders , if you (the client) are noticing a slower Time to Fill than discussed or expected, it's time to investigate the reason. Is your organization interviewing and responding in a timely fashion to the candidates who have been submitted? Are you communicating job openings to your provider quickly? If the answer is no, your organization could be the culprit.
2. Offer to Acceptance Ratio
Offer to Acceptance Ratio is the percentage of accepted offers an organization receives. If your company is extended offers that are routinely rejected by candidates, this is an indication your RPO provider is not delivering clear expectations to both you and prospective hires. Your provider should be coaching you on fair salaries and benefits packages for the market while also lining up the candidates' motivations and needs with what you have to offer.
A poor Offer to Acceptance Ratio can also indicate the candidates are not being properly vetted by recruiters. Your RPO provider needs to understand and evaluate a candidate's seriousness in making a career move through every stage of the hiring process. While it's impossible to know 100% of candidates' motives 100% of the time, a good recruiter knows how to screen prospective hires.
3. Source of Hire
Where are your hires coming from? LinkedIn, Monster, Indeed, your company website? This data saves time and money down the road and should be reported on throughout the RPO engagement.
4. Interview to Offer Ratio
This ratio determines how many interviews are converting into offers. Ideally, the submittal quality will be so high that a majority of your interviews convert into offers. This is a sign your hiring authority and RPO team are in sync.
Every interview takes a chunk of your valuable time away from actual work. If your RPO provider is shooting over a large number of prospective candidates rather than pre-screened, top tier talent and you interview a majority of those submittals, both you and your provider are not spending your time wisely.
Measuring your RPO engagement throughout the process and after completion is important for benchmarking and understanding true Return on Investment (ROI), a factor that is much deeper than a dollar figure.