Priorities are shifting for businesses that want to hand over their staff recruitment to a dedicated provider with specialised technology and know-how. There’s now a demanding list of conditions for any potential recruitment outsourcer (RO).

“Early deals focused on putting in one-size-fits-all processes, with cost savings the biggest focus,” says Sue Brooks, director of the RO business Ochre House, which in 2006 secured a large recruitment deal with supermarket chain Somerfield.

“Although that is still important, now it’s more about improved quality of hire, getting better people into the business who stay and add increased value, while reducing attrition.”

RO providers now need to demonstrate real expertise to win contracts, and innovative methods are key, she says. “We have introduced ‘narrowcasting’, which helps organisations move away from trying to source candidates from the widest possible talent pool to sourcing them from a specific population, using attributes and behaviour as indicators. We have also developed a planning tool, called Scenario, so that companies can look at trends within their businesses to help decision-making.”

RO, also known as recruitment process outsourcing (RPO), should be an all-encompassing proposition, according to Paul Knowles, engagement director for Everest Group Consulting, a sourcing advisory firm. “RPO providers today are doing it all: internal mobility, talent management and branding.”

Everest Group Consulting recently conducted an analysis of RO management involving studies with buyers and suppliers in the UK and USA. “It’s estimated that the RO market will be worth $10 billion to $15 billion globally by 2010, with anywhere from $1 billion to $2 billion a reasonable proposition in the UK,” Knowles says.

RO providers vary in scale and expertise. They include high-street agencies, head-hunters — who often deal in executive searches — and specialist operators such as Capital and Alexander Mann Solutions (AMS). “Each offers different perspectives and each has different constraints,” says Knowles.

AMS has been working with Vodafone UK since 2005, helping deliver specialist employees in areas such as IT, finance and HR. Of the 3,500 specialist permanent positions recruited every year, AMS fills about a third, says Anna Tomkins, resourcing operations manager, Vodafone UK.

Tomkins says that having a team of eight AMS people on site at Vodafone has been a “cost-effective model for us”, although no figures are available. “They are going out in the market and attracting people directly, rather than depending on agencies. They are responsible for everything to do with that recruitment, from when the roles are authorised and we start the attraction for it, to supporting the hiring manager until they make the offer.” Two other RO providers are also on board with Vodafone UK, Tomkins says: Adecco is responsible for retail recruitment and Reed for contact centres.

As the war for talent increases, Knowles says, the trend is becoming global. “If you cannot find it in the UK you find it elsewhere, and the ability to manage that process on a pan- European or global basis is an ever-increasing challenge,” he says.

Outsourcing part, or all, of a business’s recruitment workload can help a company to better track and manage their recruitment expenditure, suppliers and processes. Benefits can include reducing costs and optimising return on investment, freeing HR managers from administrative tasks so that they can concentrate on strategic issues and improving competitiveness by better brand management.

But it’s not right for everybody. “You shouldn’t outsource a process that is broken. But we tend to find that companies tend to ignore that, they outsource because they have lost control,” says Paul Mallinson, managing director of Hays Resource Management.

“Fix it, then outsource it, depending on the strategic importance of talent acquisition. If an organisation believes that’s a core function to its business, it shouldn’t outsource. Or outsource core services, so the process is outsourced but the strategy remains in-house.”

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