Can Client Satisfaction Lead to Outsourcing?

I recently met with an executive from a large HRO firm. We were talking about the outsourcing concept. Our conversation eventually reached the shock that most staffing departments feel when they hear that some or all of their organization is getting outsourced. Almost inevitably they fall back on the “But our hiring manager’s like us!” argument. According to the HRO exec, what most staffing departments fails to realize is that hiring manager satisfaction is not a measure that really matters to the executive who decides to cut costs through outsourcing. But even if they did care, it is obvious that hiring manager feedback is not a reliable measure of customer satisfaction.

Hiring managers are usually asked whether they like the staffing department’s service right after the hire is completed. Since most hiring manager’s believe that they just hired the best and the brightest, they are happy with the service they received. There might be some grumbles about the time it took to source, or coordinate interviews, or close the deal. But all that tends to pale in comparison to the joy of getting the hiring monkey off their back.

This lines up pretty well with how most staffing departments think about their work. Their job stops when the candidate accepts the offer. Most recruiters don’t think that they should be liable if the new hire quits after a couple of months, or otherwise turns out to be a dud. Their rationale is that they are accountable for finding people, not for filling jobs. Hiring managers fill jobs.

But most hiring managers don’t think of it that way. Most hiring managers will at least partially blame recruiting if a new hires bombs. The staffing department’s effectiveness is almost always viewed through this lens: am I getting great hires, and are they staying great hires?

The moral of the story?

• Most executives who decide to outsource the staffing function don’t care whether their hiring managers are happy or not. They are outsourcing to decrease cost and risk, not to increase customer satisfaction.

• Even when the executives do care about hiring manager satisfaction, they are getting a different story than the staffing department is. The staffing department gets the warm fuzzies right after the hire. But the executive gets the negative comments about the how many of the recruiter’s hires have gone sour down the road.

How do you fix this?

Become accountable for the hire’s success. Like a salesperson that doesn’t get paid unless the new customer is still referencable three months after the close, recruiters should want to be accountable for the success of the hire three months after they start.

Comments

[Double Dubs]

Jeff: A slightly (but not totally) different opinion at my blog. http://hrtech.blogspot.com/2005/11/business-case-for-rpo.html

I think your perspective about an exec's view of the hiring function is interesting. Even in other parts of the HR function, I've never really heard many complaints about how quickly a new hire turns over. Perhaps the field generalists get more of this, but certainly you're right - recruiters hear the good remarks directly after hire.

My opinion, RPO is here to stay. There are some fundamental cost factors that drive these decisions. Whether or not RPO organizations will provide the same quality and adaptation to the client's culture is yet to be seen.

[Bpo services]

Outsourcing is subcontracting a process, like product design or developing to a third-party company.The decision to outsource is often made in the interest of lowering cost or making better use of time and energy costs, redirecting energy directed at the competencies of a particular business, or to make more efficient use of land, labor, capital, technology and resources.