HOW DO OFFSHORE RPOs WORK, AND WHY DO SO MANY AGENCIES USE THEM?

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  • HOW DO OFFSHORE RPOs WORK, AND WHY DO SO MANY AGENCIES USE THEM?

As a recruitment agency, you’d wonder how the offshore RPOs work and the reasons behind 100s of mid-to-large sized agencies using them? We all know, that recruitment is a highly competitive market and the pandemic has changed the recruitment cost model so fundamentally that it will never be the same again.

Given the Covid crisis, an oversupply of candidates and dampened flow of jobs, sustainability is highly imperative for every recruitment business. Posting jobs, sifting thru’ hundreds of applications, vetting and pre-screening the candidates, conducting reference checks, and ensuring the submissions on time is an exhaustive and time-consuming processes for the recruiters.

Ensuring the turnaround time is quicker, and the quality of candidate submissions plays a vital role in the recruiting process, ultimately deciding the agency’s fate if they will place the candidate submitted for the role.

Hence, having a slick operating model that enables the recruitment agencies to work within tight timelines, and maintain quality whilst ensuring sustainability, improving margins and reducing costs is critical to the future of recruitment agencies. In such situations, offshore RPOs come to the rescue.

Table of Contents:

Benefits of Offshore RPO

Myths about Offshore RPO

Steps to Starting a Successful RPO Partnership

RPO Engagement Models

How to Select the Right Offshore RPO Partner 

We have provided valuable insights into how offshore RPOs work, and how can you start working with one immediately?

What can an offshore RPO do for you?

Offshore RPOs benefit recruitment agencies of all sizes; i.e. small, medium and large corporates. The offshore RPO model has multiple advantages that not only enable the operations but also for the onshore recruiters. 

  1. 24x7x365 cover 

Want a 24x7x365 cover for your agency. Offshore RPOs easily manage this, mainly due to the time difference and availability of staff happy to work the hours you want to be covered. Especially for the sectors such as industrial, manufacturing, and healthcare, there is a need for the recruiters to be present in the out of regular business hours, i.e. post 5 pm and as in healthcare which requires round the clock presence.

  1. Cost-effective model

Employing staff in Asia or Eastern Europe is cost-effective compared to an onshore team due to the cost arbitrage. A low-cost model that reduces costs by 50% enables the recruitment agencies to invest and grow more. Cost reduction is the byproduct of working with an offshore RPO.

  1. No overheads

When you partner with an offshore RPO services company, there are no overheads such as office space rent, national insurance, sick pay, etc. Imagine the savings on time, and actual £s saved every year?

  1. Access to recruiting talent

Recruiting profession is booming due to the rewards it brings to people who put in the work. When working with an offshore RPO partner in India, the recruitment agencies access highly experienced recruitment talent across sectors. The abundance of highly educated professionals with excellent English communication skills and the hunger to learn, grow and make money opens up a vast pool for the recruitment agencies to recruit rookies and develop them into top billers in short-to-medium duration. Imagine having a computer science graduate who can understand the nuances of the trade, clubbed with good English communication skills and a sales aptitude recruiting IT professionals for jobs in London. They would do an equally great job (if not better in your perspective) than a recruiter operating out of your offices in the UK.

  1. Access to the tools of the trade

Many offshore RPOs have access to multiple job boards. Recruitment agencies get access to job boards without subscribing to them. Agencies looking to develop a candidate database without a hefty investment in the job boards take this highly cost-effective route. A CV sourcing service delivered with the job boards enables the agencies to have a resource that will source CVs for their requirement and get access to job boards without actually getting into a long-term agreement.

  1. Flexibility

Flexibility is one of the biggest USPs of an offshore model. The agreements range from per vacancy, per man-day and monthly rolling contracts. Many offshore RPOs also work on a zero-hour deal.

Secondly, the ability to adapt to the changes in operations with a core focus on delivery makes flexibility one of the most featured benefits of partnering with an offshore RPO. The flexibility is due to operational know-how, and the ability to deploy relevant professionals in a short duration.

  1. Scalability

The comfort of having someone watching your back gives you enough confidence when building a business. Offshore RPOs empower the recruitment agencies to rely on winning and catering to high volume business, plugging inexperienced recruiters to manage the peaks, and outsourcing the portion of operations/projects that may be expensive, non-revenue generating, etc. to deliver inhouse.

The ability to rely on a partner that can get the ball rolling without you having to spend time recruiting, training and managing staff, scalability is one of the key features and benefits of partnering with an offshore RPO. 

  1. Increase fill rate

Have you ever come across a recruitment agency with a 100% fill rate? As a recruitment agency owner, there is always room for increasing the fill rate, irrespective of the desk; i.e. temp, contract or perm. Even if you are happy with your current fill rate, there is an opportunity cost for the jobs you are unable to fill; i.e. due to the lack of resources; i.e. experienced recruiters, tools or solely because you lost those jobs to the competitors.

An operational model where dedicated recruiters focus on the jobs your team has been unable to fill due to:

  • Low margins
  • Lack of candidates in those regions
  • Lack of support, i.e. Resources, recruiters, out of hours cover, perfectly cleansed and regenerated internal database
  1. Improve margins

What type of recruitment agency owner would not want to improve margins? Recruitment agencies can improve margins by deploying experienced recruiters with offshore RPO partners mainly due to the following reasons.

  • Cost-effectiveness of the model
  • Availability of experienced recruiters
  • No overheads (Infra, National Insurance, Staff churn cost, Management time, etc.)
  • Increase in the fill rate
  1. 10x the ROI

When you get the operating model right, you can yield excellent results. Agencies can get 10x the ROI. One of our clients averaged circa 12x the ROI in the last six months during the pandemic. One of the many reasons is the cost to serve from India clubbed with phenomenal output by the experienced recruiter that we identified and deployed on their account. 

  1. Output focused (Less management, more output)

Where would the business owner want to spend more time, micromanaging every little task or attending to the functions that would yield more significant output? Staff retention rates in the recruiting industry have always been a primary concern for most business owners.

Imagine not having to worry about that aspect of the business as someone else deals with it while ensuring both stability and 10x the output?

The amount of time spent on little tasks of management, staff churn, finding replacements, etc. when you calculate, the cost would run into thousands of £s every year. Seldom are these costs factored into the balance sheets. 

  1. No replacement costs 

Imagine the expense incurred towards replacements, i.e., recruiting someone when having the internal recruitment teamwork on finding new candidates or actually paying the rec-to-rec agency to identify candidates?

Imagine if you do not have to bear any of these expenses while investing your valuable time in the productive tasks of managing and growing the business.

Offshore RPO manages everything right from recruiting to scale to replacing candidates in the event of finding replacements due to any reasons. More often, the time to replace has an opportunity cost aligned, the longer it takes to find someone, the bigger the loss. Offshore RPOs generally recruit staff either on the bench or have candidates on books that can start at short notice. 

  1. Reduced training & development costs

Investing in training and development is a great value add for the business and adds to the bottom line; however, having experienced recruiters deliver from day one is a great advantage for every recruitment business.

Most of the time, offshore RPOs have access to skilled recruiters and back-office staff that can hit the ground running—eventually costing a lot less investment in training and development from day one onwards.

Secondly, when scaling the teams, the concept of training the Trainer enables the offshore team to be self-sufficient in training new recruits, leading to incurring cost reduction towards training and development.

Myths about Offshore RPOs

  1. Recruiters do not have great English communication skills

English is not the native language of people outside English-speaking countries. Agreed. However, times have changed. There is a complete overhaul in the system and the access to English medium education, media and the internet. The language barrier is bridged continuously, and there is a massive improvement in English language skills. Secondly, when recruiting, English is the priority. Hence, relevant tests for English speaking and writing skills can be conducted before onboarding the staff.

  1. Offshore teams are not well managed

An effective management structure is in place in most businesses. However, it is also down to the client (recruitment agency) to review the partner, management practices and delivery methodology when entering into an agreement.

Depending on the team’s size, a multi-layered management approach is in place for effective delivery.

  1. Having remote teams means losing control

Covid-19 busted this myth in 2020 that having staff working remotely leads to loss of control. It is all about having remote management practices to deliver respective objectives. When expectations are set, deliverables are mutually agreed upon, and management structure is in place, control is no concern at all.

  1. We work in a niche market, and offshore recruiters don’t understand the jobs

An agency is as good as its recruiter irrespective of where the recruiter is based. If the recruiters have past expertise and understanding of the recruitment process, sector clubbed with English communication skills, understanding the jobs and ensuring quality submissions is as good as someone delivering it from the UK or anyplace else.

  1. They do a keyword search and source candidates.

How you recruit the recruiters on your offshore team matters more than anything. Well experienced recruiters always follow a thorough recruiting process and don’t rely on keyword search to find candidates.

6. They don’t understand the recruiting process.

Offshore recruiters do understand the recruitment process. However, every company has a unique process of how things work in their agency that might not entirely match your company’s process. Hence, your involvement in driving the offshore recruitment team as an extension of your business is a must for the success of the offshore RPO model.

  1. They contact candidates without actually matching the CVs to the job.

When you lay out a detailed structure and recruiting process, it is easy for the remote/offshore team to follow the standard operating procedure. Not every offshore recruiter will contact candidates without matching the CV to the job irrespective of the geography.

  1. Offshore Recruiters cannot build rapport with the candidates.

This entirely depends on the region and sectors recruiters are deployed to deliver. IT, Healthcare, Construction and Engineering are some of the sectors offshore recruiters do exceptionally well. Factors such as experience and seniority of the recruiter matter more than anything else.

How to work with an offshore RPO? 

What steps will you take if you were to set up a new vertical or recruit new staff on your team?

Developing the team onshore or offshore, the fundamental steps are critical for success in both these situations.

  1. Identifying the objective: Start with why?

Why do you want to develop an offshore recruitment team?

Generate a large pool of CVs without investing in multiple job boards, increase fill rate, improve margins, reduce costs on support functions, overall cost reduction, etc.

  1. Buy-in from the key stakeholders

Once you have figured out, it’s time to propose your plan to the board and get buy-in from key stakeholders on the team. We have experienced that when you have buy-in from your operating board members, the success of the project increases manifolds.

Having an expeditor and a champion(s) that drives the initiative and is accountable for the project’s success, leads to quick wins and works as a confidence booster for others with reservations.

  1. Firming up the scope

Once you’ve got the green signal from the board and key stakeholders, it’s time to sit down with your team and drill down the functions you want the offshore recruitment team to work.

A thorough process review of all the functions will give you visibility of the scope. When the scoping activity is in the process, documenting the scope and outlining procedures will help when you finally decide to work with an offshore RPO partner.

  1. Time to find a team

Once you’ve firmed upon the scope, it’s time to identify the team responsible for the training, day-to-day delivery, supervision, and overall accountability for the offshore model’s success.

Depending on the overall scope and size of the offshore recruitment team, you’ll need:

Trainer: In a small setup, Sr. Recruiter or a Manager takes up the onus of training and handholding the offshore recruitment services team. In large setups, there are dedicated trainers that train the staff on Skype/Zoom or even visit the offshore RPO centre for a short duration.

Expeditor: Responsible for managing and controlling the overall scope of work. Most imperative task as when the staff work directly with the dedicated offshore team, chances are they will work on jobs which are entirely out of the scope. Frequent instances like these derail the objective and only lead to failure.

Manager/Director: Mainly responsible for the overall delivery and management of the offshore team. Their participation is imperative from a supervision and review perspective, exactly like the role they’d play for their onshore team’s success.

  1. Documentation

Ensuring your process documents for respective functions, training and evaluation material, etc. is in place when you start helps in a smooth transfer of the process.

This is a must-have before you transition the process and initiate the relationship with an offshore recruitment company.

If you can’t conduct a pre-sales review, scoping and documentation, you can always have the offshore recruitment partner do that for you. Of course, there will be a cost attached, but given the experience, it is worth every penny as it makes your job much more comfortable.

Once you’ve got the above-mentioned factors covered, it’s time to search for the right offshore partner that meets your requirement. Assigning this task to someone on your team helps to expedite the process in a quick turn-around.

  1. Timeline

Defining the timeline is another critical aspect of this project. How much time will you spend in finding the offshore recruitment partner, time spent on due diligence, presentations, proposals, etc. to the day the project goes live. Every factor must have a stage-gate to your benefit. 

How do offshore RPOs work? 

Offshore RPOs mainly operate as per the engagement models outlined below.

  1. Dedicated Resource Model

An operational model where staff deployed on the respective account only works for them, very much like recruiting someone in the office on a permanent basis. They are your staff and do not work for any other agency.

  1. Shared services

A model when staff resource is deployed to work on more than one agency/client.

  1. Built Operate Transfer

The model comes from the construction industry where the supplier builds the team for you, makes it operational and transfers it to the recruitment business when they are ready to manage and operate on their own. 

Finding and working with the right offshore RPO partner

Define your criteria – The first step.

  1. Depending on your requirement, i.e., do you want to be a client who gets dedicated attention, are you ok to be one of the many clients, i.e., what type of offshore recruitment partner are you looking to work with, small, medium, large?
  2. What are the must-haves and desirable factors you want the offshore recruitment partner to have? i.e., previous functional/sectorial expertise, trade certifications, etc.
  3. Are you looking for someone who meets the timeline or before?
  4. Is it all down to pricing? 

Set expectations:

Being clear about what you are looking for the offshore recruitment team to work on and the numbers, i.e., KPIs in terms of productivity, efficiency, increase in sales, cost reduction, etc. at the end of the specific period paves the way for the success of this model. 

Visit the Offshore Recruitment Partner Facilities:

Visiting the offshore recruitment partner’s offices will give you absolute clarity if you want to proceed with them or look for an alternative. Visiting the facilities will provide you with a clear idea about their systems, professionals, leadership team, facilities, etc. 

Put a Communication Plan in Place:

Failing to communicate effectively is starting on the wrong foot. Would you now discuss, give feedback, and listen to feedback from your onshore/inhouse staff? If your answer is, of course, yes, it is advisable to put a communication plan to cover the following.

  • Rewards and recognition
  • Weekly reviews/Feedback
  • Monthly reviews/Feedback
  • Quarterly Business Review (QBR)

Don’t entirely take a transactional approach. Communicate freely with the team. Making them feel like a part of your team garners bonding that directly results in positive output.

Smooth Transition:

Once you’ve agreed to work with a respective service provider, it’s time to work on the agreed tasks’ overall scoping and transition. Knowledge Transfer (KT) is one of the most critical pieces of the plan. The recruitment agency must ensure all the respective training and process documents are in place with the Trainer.

Remember, “Garbage in, garbage out”.

A typical transition plan will include knowledge transfer

  1. Who, What, When?
  2. Stage gates for respective process completion and evaluation
  3. Parallel run – Mirroring the onshore team
  4. Go live.

Conclusion

It is essential to understand that situation is volatile in the new normal era, requiring agility and responsiveness. Flexibility is the key to the success of the RPO partnership. RPO service provider company and recruiters will need to collaborate cohesively to chart out an effective strategy and understand the strengths they bring to the table to be truly successful.

Recruitment agencies need to remember RPO is not a makeshift arrangement or just about filling a job requisition. Recruitment Process Outsourcing is a long-term strategic partnership to manage the people, process, and strategy for your recruitment functions and growth.

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