Building the right governance framework for a successful RPO engagement

A recruitment process outsourcing (RPO) relationship is different than any other outsourced relationship you might have with a service provider because of its strategic nature - they are truly your talent partner, intrinsically linked to your business’ success. And only a healthy RPO relationship can deliver results. An RPO solution that is not managed properly can escalate costs, and more importantly, lead to missed opportunities in hiring quality talent for key positions.

A strong governance framework provides the best performance management model to drive results in an RPO engagement. It is therefore essential to negotiate and honour a robust governance framework as part of your deal with the RPO partner. The framework should support regular performance reviews and calibration. Focusing on the following five areas can get you off to a strong start on building such a framework:

1. Establish a strong communication channel

When it comes to hiring, the need to quickly fill positions sometimes pushes communication to the back burner. In an RPO program, the governance framework must be built around a strong communication channel, and continuous to and fro communication with the vendor. Key HR stakeholders, department heads, project managers, and hiring managers should all be included in the communication loop.

2. Enforce accountability and distribution of risk

In an RPO engagement, it is essential that both parties establish and work towards a common goal. The RPO, as an extension of the company, should work with you to manage both positive and negative outcomes. The commercial model should be built around equal distribution of risk and the governance framework should ensure that each party is committed to equal levels of accountability.

3. Define relevant KPIs and SLAs and specify incentives

Defining key performance indicators (KPI) for the RPO engagement based on the scope of services is a must-do. Service level agreements can then be set up based on the established results for each KPI. The execution of SLAs must be monitored regularly. By tracking KPIs as tactical measurements, you can assess the resulting SLAs and overall performance, as well as validate reasons for performance or non-performance. You can also use them to support action plans for performance improvement. SLAs should define focus areas and incentives for the RPO to deliver your essential recruitment requirements. A modern RPO services provider should offer real time monitoring capabilities and metrics using advanced analytics.

4. Drive regulatory compliance

In the face of growing risks from breaches, a mechanism to enforce compliance is essential. The governance framework should specify how the RPO provider will minimise the risks of regulatory compliance breaches. Compliance management is essentially process management and leading-edge RPO providers leverage advanced data management and analytics tools to mitigate risks.

5. Ensure RPO processes are aligned with internal processes

While defining the governance framework it is essential that your organisation has clearly defined end goals for the RPO program. You can align your cross functional teams with the RPO to drive synergies by defining goals, tasks, and deliverables - along with the cross-functional team heads. Processes and policies followed by the RPO should mirror that of your company. It is essential that you allow the RPO provider access to your processes and policies, to drive synchronised operations.

The right RPO governance framework reinforces trust

Open collaboration and communication at all levels are key to RPO engagement success. Flexibility is necessary to address dynamic requirements, and both partners should evaluate and accept changes to the governance framework, as and when required. Also, some leeway should be provided for factors that are outside the control of the partner. The governance framework ideally is decided early on and designed with the end in mind. By establishing reasonable expectations, measurable goals, and clear communication, the governance framework helps reinforce trust between the partner and your company.

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