The typical RPO in Japan struggles to deliver on expectation and we look at some of the factors behind this.
I previously outlined the common problems behind the high cost of recruitment in Japan and argued that the chief problem is really a macro one related to the maturity (actually immaturity) of the Japan talent acquisition market and the scarcity of high quality recruiters. Ultimately what we end up with are unacceptably high costs becoming “accepted” as there seems to be no other way.
While the problem often gets thrown into the “too hard” box and solutions seem in short supply, some companies look to outsource the solution to a Recruitment Process Outsourcing (RPO) provider. Due to the immaturity of the Japan talent acquisition market RPO delivery also presents challenges that I want to highlight here.
Polling a Tokyo seminar audience made up of HR and talent acquisition leaders from various industries we found that among those currently using an RPO service (n=10), the level of satisfaction with the “status quo” was very low: High (0), Average (4) and Low (6). In fact the level of satisfaction with agencies for all third party recruitment services was poor, but having no-one at all respond with high levels of satisfaction for RPO was a surprise! It was obvious that cost was a major concern, so at the end of the day the overwhelming evidence points to a poor service failing to address the pain point of high cost per hire. This is the “status quo” RPO. (At this juncture I should of course point out that none of the attendees were from our existing client pool!!)
Looking into answers for why this is so, I strongly believe that all three parties involved in Japan RPO – clients, RPO recruiters and RPO providers – very often lack the experience required to deliver a true “value added” solution. While many excellent people do their level best, general market immaturity means they are up against a lot of challenges.
Let’s start with the recruiters. While of course there are some excellent recruiters working in RPO, finding quality recruiters is the one single bottleneck to expanding successful programs in Japan. It’s all too easy to go out and sell RPO’s but delivering on them successfully uncovers a serious weakness in the market. The Japan market is flooded with low value recruiters who cannot handle end-to-end recruitment from candidate sourcing through to stakeholder engagement; even if the recruiter is capable they often have few resources to get the job done. Thus they end up remaining dependent upon high cost agencies, which provides very limited value other than closing the reqs. We very often pick up excellent recruiters who have essentially been dumped into an RPO and left to struggle on their own, but our real mission is to grow the next generation of RPO recruiters who have the “direct first” mindset. We need to create genuine careers in talent acquisition.
RPO providers often sign their clients from afar and the people selling the deal are not even on the ground in Japan. In some cases they have an agency operation on the ground but once their recruiters are dispatched to an RPO they are essentially on their own. The “solution” that is proposed to the client is simply to put a body on site and get the reqs closed. Through the first wave of RPO’s in Japan there doesn’t appear to have been much ROI in it for the client, though on the other hand some RPO proposals we’ve seen discounted so aggressively that it must be impossible to get a quality recruiter to agree to the deal. We’ve never seen those deals work out for anyone involved.
On the client side, in a relatively immature recruitment market like Japan where the local talent acquisition team often has limited experience in direct sourcing beyond referrals, and may have always been dependent on agencies for the rest because, well, that was the norm. Given this benchmark I’ve noticed that the local team often struggles to understand what a better “solution” might be. What is often seen as an acceptable “solution” is simply to throw a body at the problem and hope for the best.
Let’s wrap up by taking a look at what all of this means. If any of the three parties fail to recognize what a real solution should look like then we end up with the “status quo” where the success or failure of the RPO program lies fully and squarely on the shoulders of the RPO recruiter. That recruiter may or may not be prepared, enabled or even capable to handle the challenges that fly their way and the expectation heaped on them from the client may also be completely out of touch with reality. It’s a hellish position to be in when things don’t go your way and is the key reason my many RPO programs fail. There are no winners in this scenario: the client is angry, the recruiters are stressed, and the provider is feeling the heat.
Our mission is to help our industry shift beyond this early stage of RPO delivery and it will take education on the client side, significant development of young recruiters, and the willingness of RPO providers like ourselves to invest so they can deliver a solution that reduces the risk that the only success factor is the recruiter that gets assigned. This will all take time.