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The Recruiters’ Hub Conference (Rhub), held two weeks ago, provided lots of food for thought for the recruiters who attended.     

I was especially interested in the presentations by the respective representatives of Telstra  , Lend Lease   and Sanofi-aventis  . Each of these companies has undertaken a complete shift in the way they recruit, from a recruitment agency-centric model to one where recruitment agencies are, comparatively, marginal suppliers of recruitment services. The gap has been filled, in each case, with an RPO provider.     

What are these organisations, and others like them, who want to take greater control of their recruitment, interested in accomplishing by using an RPO solution?     

Here’s a summary of what Chris Lamb   (Lend Lease),  Ronan Carolan   (Sanofi-aventis) and Kristen Graham   (Telstra) shared with the Rhub delegates:   

1.      Reduction in agency & recruitment advertising spend

2.      Reduction in time to hire

3.      Enhanced candidate experience and employer brand protection & promotion

4.      Improved sourcing capability

5.      Build own candidate database

6.      Increased quality of hire ensuring greater candidate fit to organisational culture & values

7.      Improved hiring manager selection skill & capability

8.      Supplier margin control & consolidated invoicing

9.      Increased internal referrals

10. Reduced attrition

11. Enhanced compliance

12. Reduced administration

13. Higher quality data to inform business decisions

14. Provision of robust talent attraction reporting metrics

15. Scalability in line with business needs

16. A centralised view of recruitment activity

17. Career opportunities for recruitment consultants

18. Development/enhancement of careers website   

Smart companies who want to grow their sales and profit as well as enhance their employer brand have decided that recruitment has to be approached strategically, not tactically.   

Q:   How do you know a company is serious   about getting strategic with their recruitment rather than just talking a good game?     

A:   They start measuring   everything to do with recruitment, right from attraction and sourcing through to the long term performance of each hire.   

Companies measure everything to understand where they are now and then to decide where they want to be. The next step is deciding how to get there.   

The traditional recruitment agency has, 99% of the time, been of little use to their clients when those same clients have wanted to approach recruitment strategically.   

The traditional recruitment agency business model has been built on a reactive, transactional approach. Nothing wrong with that, as that’s, overwhelmingly, what the market has demanded.   

However when you consider the eighteen strategic recruitment objectives, listed above, it’s fair to say that most recruitment agencies, working to a traditional agency business model, have been unable to provide the overall ‘recruitment solution’ sought by strategic thinking clients.   

Companies who had built internal recruitment teams typically discovered that the expected improvements in capability and reduction in cost were not necessarily forthcoming. The recently released white paper from human resource consulting firm deliberate practice  revealed that 70% of respondents did not believe that their company’s internal recruitment function was effective at managing a database of candidates. Seventy per cent! If you cannot manage a database of candidates, then the recruitment activities are destined to be overwhelmingly reactive, as the white paper notes in its commentary.     

The solution turned up in the form of what we now know as the Recruitment Process Outsource   (RPO) provider.   

As Lend Lease’s, Chris Lamb, explicitly said to the Rhub audience, the RPO option promised (and delivered) a much quicker increase in the performance of the company’s recruitment function than building (or rebuilding) internal recruitment capability.     

Both Chris Lamb and Ronan Carolan said that based on their companies’ respective successes in RPO use it was very, very unlikely they would move away from the RPO model of recruitment.   

What made them so adamant?   

Here are the results achieved by each company in conjunction with their respective RPO providers.   

Lend Lease  (in the first 12 months using HRX  )  

·                Agency use reduced to approx 15% saving $1.8M

·                Time to hire reduced from 12+ weeks to 9 weeks

·                Candidate satisfaction 85%+

·                Hiring leader satisfaction 90%+

·                Delivery of an improved, more consultative service to the business

·                Robust pipeline of qualified talent built – and growing   

Sanofi-aventis  (first 5 years using Hudson  )  

·                10% improvement in new hire performance

·                Conversion rates improved from 10:1 in 2007 to 3:1 in 2010

·                Sales reps achieving 18% higher call cycle rates

·                20 percentage point improvement in engagement from 2007

·                Improvement in internal mobility from 30% in 2007 to 50% in 2011

·                Improvement in internal referrals from 10% in 2007 to 17% in 2011

·                Improvement in time to short list from 15 days in 2007 to 11 days in 2011

·                Improvement in time to hire from 30 days in 2007 to 25 days in 2011   

Telstra  (first 5 years using Talent2  )  

·                Minimal use of agencies now, down from nearly 100% in 2007

·                Recruitment based on skills and behaviours rather than skills and experience

·                Co-ordinated employer brand activities covering EVP, women’s brand,  LinkedIn and  Facebook, all contributing towards substantially reducing recruitment advertising costs

·                From no capability to submit resumes directly to now having 40,000 careers site visitors per month and 15,000 direct applications

·                All vacancies advertised company-wide driving internal redeployment, promotion and internal referrals

·                From localised on-boarding to now having company-wide Telstra On-boarding Portal providing a consistent experience for all employees   

Recruitment is not core business for Lend Lease, Sanofi-aventis or Telstra. None of them want the distraction of building their own recruitment capability. The RPO providers offered a seemingly perfect solution and it seems that these same RPO providers now have a growing roll call of satisfied clients. Each satisfied client provides a compelling case study of how business results can be enhanced by looking at recruitment in a strategic, not transactional way.   

Does all this mean the end for recruitment agencies?   

No. Far from it.  

Clearly there are hundreds of thousands of companies in Australia that are far too small to generate the returns that would outweigh the costs of committing to the RPO approach as offered by Talent2, Hudson, HRX, Alexander Mann, Hays, Futurestep and others.   

Innovative small recruitment agencies such as Sydney CBD agency people2people  have taken the initiative and  now offer a smaller scale RPO service (onsiite  ) that complements their traditional fee-for-placement recruitment service.   

Melbourne headquartered executive recruitment consultancy Mindset Group   present to their, predominantly SME clients the three ‘Ts’ approach to recruitment and talent.   

Transformation  aligns business, people and process strategies to drive and sustain a change in the organisation’s mindset.  
Talent   – secures an organisation’s capabilities to ensure they have the correct skill sets now and in the future.  
Technology   – drives the engagement of the workforce by implementing a tool set(s) for improved capability and increased engagement.   

Although Mindset don’t label this service as an RPO (and technically it isn’t an RPO because Mindset are not offering an end-to-end solution for all recruitment activities), I certainly believe that this approach demonstrates that Mindset are offering a strategic approach to recruitment and related issues such as workforce capability and engagement.     

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Miles Thresher

Really interesting article. As an ozzie and owner of a boutique recruiter in the UK, we work with a small number of RPOs. These are typically on enterprise size accounts where the model is polarised between RPO or in-house. I have noticed every dog has its day in this market. Or as every good recruiter knows "nothing is forever". The RPO solution does seem to get turned over with regularity in the UK market with regular re-tender. It would be interesting to know the average contract length of individual RPOs. I still see many smaller sized operations making a good living on the leakage in these bigger accounts.

Gareth Flynn


Interesting read, thanks for sharing the insights. By way of background – I have worked for agencies in the past (UK and Aus) and more recently one of the large global RPO firms here in Australia.

I set up my new business TQSolutions (www.tqsolutions, in 2009 to cater for smaller scale 'plug-in' or 'on-demand' outsource services. Since then we have grown and developed our model to cater for whole of business recruitment outsourcing; hybrid models where our services complement (rather than compete) with internal recruitment team; and finally for managing campaigns, projects and other bulk recruitment exercises.

We have worked with large MNC and Australian businesses as well as more SME oriented organisations in the public and private sector.

Most clients we engage with are currently looking at ways to improve their capability and capacity without introducing significant fixed costs; they are also looking to significantly reduce their recruitment costs (especially agency spend), hence the basic principles of outsourcing and partnering with RPO's is attractive to them.

The crucial point is there is no cookie-cutter model – you need to genuinely build a solution that drives the outcomes required by the client – whether it be insourced, outsourced, hybrid etc. Small businesses like TQSolutions can provide this solution focused mindset without the commercial / corporate restraints of the larger players. Equally important is knowing when to let go – many corporates use RPO to fast track their internal build processes, it is important to accept this strategy and be prepared to deliver solutions that will 'build-operate-transition' without any regret or bitterness.

Rather than divorcing at the end of a services contract, this mind set allows for continuous consulting opportunities and other services if handled correctly.

RPO themed businesses (like TQSolutions) will grow here in Australia and generalist recruitment firms will undoubtedly suffer because of this. I personally think this is a good development for the industry and will professionalise how recruitment is conducted in Australia which will benefit clients and candidates alike.

For more information about the TQSolutions model, please go to or read our blog at to find out more about what we do.

Would love your thoughts, please comment.x
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