To augment the labor load balance of supply and demand, talent acquisition leaders restricted by headcount and budget limitations are partnering with external suppliers. Recruitment process outsourcing or RPO service providers are seen as a logical choice to partner for recruiting labor support. However, RPO service standards do not exist, and vary between organizations. Talent acquisition leaders are left to decipher between service offerings to identify the right partners to align with. With the term RPO being uses loosely by many suppliers, the marketplace can be confusing.

To contribute to the confusion, many of the true RPO providers have evolved from pure outsourced providers to offering specific task-oriented services to support the individual steps of the recruiting process. I describe the move from broad scope to narrow scope as the emergence of micro-recruiting services. In an attempt to understand the change, I will explore the relationship between RPO providers and their customers and the catalyst for transformation.

The RPO industry is evolving driven by client demand. The need for full-scale outsourcing has shifted as hiring activity waned last year. By definition, the PO in RPO means process outsourcing or shifting the burden of day-to-day management of a process to an external supplier. The idea is that the process, albeit important, is not part of the core business offering and can be better managed by a specialized vendor. An example would be the outsourcing of call center recruitment or a short-term recruiting project to ramp up a new business unit. The value being that internal recruiting resources would remain focused on critical employment and not be distracted by spikes in demand or less strategic initiatives.

As many companies hunkered down in 2008 and 2009 and implemented cost-cutting measures, hiring slowed and corporate recruiting functions were fighting for relevance as the downturn continued. The broader RPO services were not needed and RPO suppliers found themselves in the dubious position of being perceived as a threat by corporate recruiting functions. The term “outsource” became a cause for concern for many talent acquisition leaders as layoffs cut deeper into organizations. RPO businesses needed to reinvent. In performance review meetings and sales calls, RPO representatives changed their language from touting the value of outsourcing to supplemental or support services. They positioned themselves as an ally and not a threat to internal corporate recruiting functions. They listened to their customers challenged by req creep.

Many talent acquisition leaders evaluated their current operations and looked for ways to become more efficient in handling the demand. The obvious challenge was to figure out how to balance the load. They found that most full-cycle recruiters working on 20 or more professional openings lose their sourcing effectiveness and become project and relation managers. The more innovative functions divided the labor into sourcing, administration, and recruiting but found limitations to scale as the req load increased. Contract recruiters are a viable option; however, training and workspace issues burden ramp up time and the cost of additional ads and sourcing tools burden tight budgets. Creative RPO providers jumped at the opportunity to close the gap on recruiting labor shortages. They unbundled their broad offerings and developed individual services such as full cycle, co-sourcing, response management, and pipelining to better meet their customer requirements.

In deconstructing the recruiting process, talent acquisition leaders evaluated the effectiveness of hybrid models, using a blend of supplier-provided services with internal recruiting resources. They found they could expand their recruiting teams with full-cycle services without expanding headcount. Internal recruiters at load capacity would benefit from co-sourcing assistance which allowed external recruiters to work with the internal recruiters to populate their pipeline of talent with qualified candidates, while internal recruiters maintained ownership of relations with the hiring manager. Sourcing and administration teams burdened by the candidate-rich market and the overwhelming response from their efforts, welcomed the extra support from external recruiters offering response management in helping to qualify resumes and phone screen qualified candidates. And for those functions with candidate relationship management strategies put on hold, pipelining support allowed them to reinitiate strategic talent efforts to help position their organizations for growth and finding key talent.

Talent acquisition leaders are attracted to three key value propositions of these micro-recruiting services: cost, scale, and intelligence. At this stage in the economic recovery, companies are varied in their levels of investment in recruiting. For example, technology companies are investing heavily in recruiting as product development and marketing initiatives increase demand for talent, whereas healthcare companies are cautious as they interpret the impact of reform but still look to position themselves for growth. In both cases, companies are investing at some level and hiring more recruiters is not always the answer. Talent acquisition leaders are looking for ways to maximize their investment.

With regard to cost, micro-recruiting services are significantly less than broader project-based or standard search fees. Micro-recruiting service fees are anywhere from $1,000 to $5,000 based upon project or monthly cost and include advertising, phone, and computer related burden. Versus hourly rate or percentage of annual salary, the cost is typically contained and predictable, allowing for accurate forecasting in measuring against cost-per-hire benchmarks. With regard to scale, as compared to hiring recruiters or engaging contract recruiters, micro-recruiting services can be engaged within 24 hours, if not sooner. It is a true plug-and-play resource with recruiters on call. Obviously size of project and volume of recruiting labor needed affects the time to engage, but in the spirit of the service, it is on demand. It can be disengaged just as rapidly when it is no longer needed. As for intelligence, the information gleaned from sourcing is not lost. Companies are paying for recruiting labor and the recruiting labor is an extension of the existing corporate recruiting team. Candidates sourced and qualified belong to the corporation, and that data or intelligence is shared and input into the client’s ATS. And in some cases, a seamless relationship is developed where the external recruiters work directly in the client’s ATS. Applicant and diversity tracking requirements remain intact.

This is an exciting time for corporate recruiting functions as they continue to evolve and define their value within organizations during the economic recovery. The ultimate goal remains the same: to find top talent as quickly as possible. But how they execute against that goal is rapidly changing, with the advent of suppliers offering new services to augment and support their initiatives. The challenge for talent acquisition leaders will be to identify, pilot, and find the right supplier with the right services. And as RPO organizations continue to partner closely with their customers, new services will be developed and the industry will continue to advance. Ultimately it takes a cataclysmic event such as the Great Recession to enforce change and the adoption of new ideas. We find ourselves in some stage of evolution of recruiting services and some experts are predicting full-scale outsourcing, but ultimately change is driven by demand. Today less is more, flat is up, and micro is in.

Hiring freeze is a subjective phrase which does not hold the same definition as the game “freeze tag” played on most playgrounds. Managers are not good at holding still for very long, and often work in slow, deliberate movements emblematic of practicing Tai Chi on the front lawn in the morning. It is easy to see them standing there, but unless you stick around and watch their collective movements you’ll miss the outcome of their efforts.

As HR professionals managing in a very challenging economic environment, it would seem that the definition of “freeze” would have stronger interpretation now than in cycles of the recent past. But similar to patterns of behavior in prior hiring freezes, we see the inevitable Requisition Creep. I have uncovered three theories (no research conducted) to help describe this phenomenon and lay out some ideas on how HR can best respond to this event as well as prepare for the eventual economic recovery.

In my coffeehouse discussions and conference-conferring, I have found common ground among HR professionals in my discovery of requisition creep. It truly exists. And in my reams of undocumented data, a few trends have emerged. It becomes a study of human behavior that would make Jung proud.

The first of these theories is caused by a common human defense mechanism when faced with adversity: Denial. Like a change-management project, poor financial results often take time to be absorbed and interpreted by an entire organization. But there are always those managers who choose to only hear what they want to hear and disregard any other information as unimportant or incorrect. You know: the same person who closes their door and ignores the alarm during a fire drill.

I’ve worked with these types of managers, and it’s as if they do not allow themselves to believe in what’s happening in the world around them. An example of this would be a time I reminded a manager attempting to get his requisition opened that all requisition approvals were under heavy scrutiny. He retorted that his project was not affected by the cost-containment measures because it was too important to the business. Unfortunately, he did not get his requisition approved, but attempted to manipulate our recruiting team to begin sourcing for the position regardless of the status of the opening. He felt if he found a qualified applicant he would be able to garner support for approval of the offer and the requisition. The recruiting team did not support his efforts, and he later was disciplined for working with an outside agency on the opening.

I read a similar story about a CIO who wielded his authority to support a project during a down cycle in his business and pushed through several hires to support the project. He essentially placed a bet on his career and was subsequently terminated when the project was unable to show an immediate return once implemented. I am not sure these managers wear rose-colored glasses, but they definitely wear a heavy set of blinders.

The second of these theories is caused by either a blow to the head or some other mind-altering event that creates disconnect from reality: Blissfully Ignorant. It is the opposite of chicken-little; a perpetual high of positivity that prevents any negative or constructive information to come through. It’s not inherently a bad management trait, but if left unmanaged, it will limit the logic or rationale of the manager. This also can be seen in the manager who can’t say ‘no’ or who can’t terminate poor-performing employees. They believe that it will always get better.

These managers have similar characteristics to those in Denial but have one clear distinction: they can’t stop themselves. A good example of this is when I was working with a Director who could not help himself from approving requisitions for his team. We had just sat together in the same management meeting where a hiring freeze was announced, and direction was given to put everything on hold. No new requisitions could be opened until further notice. Not a day later, a requisition with his signature came across my desk. When I questioned him, he remarked that he had no choice. If he did not approve the requisitions for his team, they would leave. He was a solid manager with a strong team but he lacked leadership skills. He improved later with coaching and development but is a good example of the manager who would rather ignore than face reality.

The third of these theories is caused by group thought and the gravitational forces of attraction: Herd Mentality. I do not intend to compare managers with Water Buffalo, but I dare to compare them to Wal-Mart shoppers the day after Thanksgiving. Managers operating under Denial or Ignorance often stand alone when attempting to push their openings through. The Herders do not act alone and wait for an invisible trigger to push their openings through. Typically the trigger is rumor that a manager in denial or ignorance attempted to get their requisition approved. I think they must figure en masse that some of them will be denied but that many will get through. This is an interesting strategy during a hiring freeze where most job requisitions require executive-level approval; bombarding the executives might work. I must admit it never worked in the organizations I worked; however, it was interesting to observe.

Inevitably business conditions improve and/or attrition causes the approval of requisitions in the organization. Because hiring freezes are often the precursor to layoffs and HR is often viewed as a cost center, the function is typically impacted, with recruiting being an easy target. And HR is often left flat-footed to respond to the recruiting needs when they arrive. Strategic HR leaders have a few options in their cache to answer the call of business.

The obvious solution is to hire recruiting support. But recruiting support has evolved from the agency-dominated period of the 80s, through the fledgling Internet onslaught of the 90s, into the post-modern (err recessionary) period of Y2K. An HR director can literally select from a menu of organizations and services to help with recruiting, and can order the combination plate or a la carte. However, with the evolution of recruiting support, the advancement of technology, and the proliferation of talent acquisition tools and techniques, one thing remains constant to drive effective talent acquisition programs: human labor. Nothing can replace experienced recruiters. It’s like attempting to build a business without sales or marketing professionals.

To strip it to the core, an HR director has three options to study when developing a recruiting strategy that requires recruiting labor to drive the process: full time, contract, or outsource. Each solution has its advantages and disadvantages; however, each will suffice to drive the process predicated upon the budget, culture, expectations, and demands of the business.

Hiring a full-time recruiter is a well known approach. The benefits of full-time recruiters are that they are a part of the culture, they drink the Kool-Aid, and the business intelligence gained stays with them. The challenge of hiring a full-time recruiter during a down business cycle is the irony that a job opening might not be approved. It is important to note that the salary and burden, including facilities, systems, and advertising spend (e.g. job boards, databases, etc.) all adds to the expense of this solution.

Hiring a contract recruiter is another well-known approach and offers similar benefits to that of a full-time hire but offers greater flexibility in cost. Notice it is not a burden; rather, the hourly rate paid is deemed a cost of doing business and typically an easier sell to management during down business cycles. However, although the labor cost is flexible, the requirement of facilities, systems, and advertising spend can be viewed as a detriment.

Hiring an outsourced recruiter is a novel approach that offers a blend of the benefits of contract and full-time without the high cost. Not to be confused with retained executive firms or agency recruiters who provide a limited slate of candidates for a fee calculated by percentage of annual salary, outsourced recruiting provides recruiting labor to drive the process in partnership with HR and the manager. And it can be broken down into parts such as just sourcing support or full-life cycle. All business intelligence gleaned from the search is reported, and systems, facilities, advertising costs are all part of the fee. The detriment to outsourced recruiting is that it is a low-touch approach in that most outsourced recruiters are located virtually.

I ask you, what kind of manager are you: in denial, blissfully ignorant, or a herder? Of course, this was a satirical look at workplace behavior during a down economic cycle, but the good news is that all cycles rotate and business growth will return. Whether or not you agree the phenomenon of Req Creep is real, down times are often good times to experiment and pilot new services. Those who innovate and prepare for the inevitable positive rotation will find themselves ahead in the race for talent. The war for talent ended with layoffs; it will inevitably turn into a race for talent in the next upswing — another observation worth exploring over coffee!