Understanding RPO: How is RPO different from staff augmentation? - Understanding RPO: How is RPO different from staff augmentation?
UNDERSTANDING RPO: HOW IS RPO DIFFERENT FROM STAFF AUGMENTATION?
7th November 2019
The recruitment landscape is ever shifting for most organisations around the world, and doubly so in the dynamic and often complex labour markets across Asia. While Recruitment Process Outsourcing (RPO) is gaining traction as a long-term solution to hiring challenges in the region, unlike more mature markets like the U.K., U.S. and Australia, much ambiguity remains around its actual value proposition. In this series of blogs, I will both simplify and exemplify how RPO can help organisations strategically source the best talent for their company, build employer branding, enhance productivity and agility, and ultimately, provide a tangible return on investment by driving timely and cost-effective results.
In this first blog, I will address the question I encounter the most when speaking with clients based in Asia: How is RPO different from staff augmentation?
One of the earliest lessons I learned when I assumed my role as Managing Director for Hays Talent Solutions in APAC, was that unlike Australia or New Zealand, RPO means something different to people across the Asian region. In a very mature marketplace such as Australia, RPO means outsourcing the end-to-end recruitment process of your entire talent acquisition function or a defined part of it. But in a less mature marketplace such as China or Japan, several organisations interpret RPO as a provision of a recruiter with no commitment on service delivery or headcount.
This is what we and others in the industry refer to as ‘staff augmentation’. This essentially puts both services at either end of the outsourcing spectrum: at one end we have RPO, which is a contract that could last maybe three years, and involves a customised, bespoke solution consisting of people and technology; and on the other end we have staff augmentation or the addition of a recruiter to an existing team who would not act independently, but under the direction and supervision of the client.
Staff augmentation or hire a temp?
Once a client understands this difference, they often ask, “What is the difference between staff augmentation and hiring a contractor or temporary employee to do the same thing?” This is a more valid question, considering the two functions sit closer on the spectrum. The difference here, is that staff augmentation typically involves the deployment of a permanent member from your RPO partner’s team or recruitment bench. This way, you, the client, can still have confidence in the specialist experience and quality control the individual will bring. In the case of a contractor or temporary employee, the individual would be somebody sourced from the marketplace and would be subject to the same potential pitfalls and benefits of any new employee. The best approach here would be up to your appetite for risk and desire for control.
RPO vs staff augmentation in Asia
RPO is maturing at different speeds in different regions across Asia. In Hong Kong SAR, Singapore and Malaysia, for example, clients are gaining a better understanding of the benefits of RPO versus staff augmentation and are looking for providers to contract for services between 12 months or two to three years. In other parts of Asia, the maturing process is slower as many organisations still interpret RPO as simply a recruiter on-site. We have received expressions of interest from organisations in Japan who want true RPO services, but most of those organisations are MNCs or global organisations that have been exposed to RPO services in other regions. In places like China and Thailand, there is a mixed demand currently but also an emerging appetite for full RPO services.
Staff augmentation can be a stepping stone to RPO solutions
While the two are certainly very different, staff augmentation is often an insightful way for clients to be introduced to the value of recruitment outsourcing. After understanding the value of the service and strategic orientations of an RPO provider through staff augmentation, many clients begin to understand the benefits of more robust, longer term outsourcing arrangements and the value it can add to their business. This is especially the case in challenging circumstances like hiring for new offices in a remote location, for example. Many regional and global organisations across Asia are expanding into countries such as Indonesia, the Philippines, Vietnam, Thailand or South Korea; but they may not want or be able to place recruiters of their own in those locations. It is times like these that RPO truly shines as a strategic and capable solution to complex and voluminous problems that cannot be solved by a single recruiter.
In my next blog, I will address the second most common question I encounter when speaking with clients in Asia: What technologies can RPO partners provide along with their services?
In the meantime, please feel free to share your own experiences with, thoughts and comments on how the world of RPO is evolving in Asia.
Managing Director ANZ and APAC, Hays Talent Solutions
Having worked in the recruitment and staffing industry for 15 years, Shane has a track record of running successful staffing businesses across a variety of different sectors. Shane takes pride in his ability to identify and develop talent whilst at the same time creating lasting partnerships with his clients.
As Operations Director for ANZ and APAC at Hays Talent Solutions, Shane is responsible for the delivery of market leading Talent Solutions to a range of clients across Australia, New Zealand and Asia. This involves the leadership and development of talented sales, delivery and operational teams whilst maintaining senior client relationships. He has a unique insight into contingent workforce models having been involved in early stage PSL arrangements, first generation programmes and mature solutions looking to take the step into SOW management.