One of the key themes from my conversations with TA practitioners on the podcast this year has been the importance of flexibility and agility. This isn’t surprising, as we seem to be bouncing between panic mass hiring and panic mass layoffs faster than ever when it comes to in-house recruiting teams. This situation can’t be sustainable! However, opportunity always comes out of chaos, and outsourcing to achieve the flexibility needed in these disruptive times is certainly something on the radar of many employers.
So how are RPOs evolving to meet the current market conditions, and what might the future of TA function look like?
My guest this week is Don Farr, Managing Director North America at Talent Works. Don is a highly experienced previous Head of Talent Acquisition and is the perfect person to talk to about the future relationship between TA and RPO.
In the interview, we discuss:
• Talent Acquisition challenges for 2024
• The evolution of RPO since the pandemic
• Hybrid, customized and project-based.
• RPOs versus Agencies
• Implementation and Onboarding
• Innovating with technology
• What will the TA Team of the future look like?
Listen to this podcast on Apple Podcasts.
Transcription:
Matt Alder: Support for this podcast comes from Appcast. You may have heard of Appcast. They’ve been the global leader in programmatic job advertising for the last 10 years, but now they’re so much more. Following their acquisition of Bayard, they now offer a whole suite of recruitment marketing solutions still driven by their industry leading tech, data driven approach and world class team of experts. Need to fill a funnel of qualified applicants? Head to appcast.io to learn more. That’s Appcast dot IO.
[Recruiting Future theme]
Matt Alder: Hi there. This is Matt Alder. Welcome to Episode 575 of the Recruiting Future Podcast. One of the key themes that’s come out of my conversations with TA practitioners on the podcast this year has been the importance of flexibility and agility. This isn’t really surprising, as as we seem to be bouncing between panic mass hiring and panic mass layoffs faster than ever when it comes to in-house recruiting teams. This situation can’t be sustainable! However, opportunity always comes out of chaos, and outsourcing to achieve the flexibility needed in these disruptive times is certainly something on the radar of many employers.
So how are RPOs evolving to meet the current market conditions, and what might the future of TA function look like?
My guest this week is Don Farr, Managing Director North America at Talent Works. Don has a huge amount of experience as a head of talent acquisition and is the perfect person to talk about the future relationship between TA and RPO.
Hi, Don. And welcome to the podcast.
Don Farr: Thanks, Matt. Really appreciate it. Really excited to spend some time with you.
Matt Alder: An absolute pleasure to have you on the show. Please could you introduce yourself and tell us what you do?
Don Farr: Yes. My name is Don Farr. I’m the Managing Director for North America at a company called Talent Works, which is a full-service talent organization. We’re based in the UK, have been around for 14 years. And then prior to that, I actually spent about 25 years in various TA leadership roles, so a lot of history there. Most recently, I led TA at Red Hat and then several startups, so saw a lot of scale at Red Hat. Over 10 years, the company grew from about 5,000 to 25,000 while I was there, and it was quite exciting.
Matt Alder: Yeah, absolutely. That is a huge amount of growth.
Don Farr: It was. Red Hat had some golden years while I was there. They had over 60 quarters of continuous growth, both on the revenue side but also on the people side. And they were a very global company. By the end, we were hiring in over 50 countries at a rate of 7,000 to 8,000 hires a year. So it was quite a lot of hiring for the team.
Matt Alder: Absolutely. So it’s been yet another interesting year in the field of talent acquisition with huge amount of things going on that are disrupting the industry and making it very challenging for talent acquisition leaders. As we move into 2024, what do you think the biggest challenges coming up are going to be, or the biggest challenges that are going to continue to be relevant into the new year?
Don Farr: Yeah, Matt, that’s a great question. I get asked that question quite often, and I really think of it in two ways, really internal challenges and then some of the market challenges that we’re going to face. On the internal side, what we’ve seen is unprecedented reorganizations and reductions within talent organizations, especially in technology. In my mind, that’s caused a lot of brain drain. You’ve got a lot of good people who’ve been displaced, and even entire organizations that have been displaced. So I think with that, as you move into 2024 and hopefully the economy improves, which we’re starting to see a little bit.
There’s going to be an increase in hiring, but not necessarily the capacity to meet those hiring needs, or even the leadership and the ability to create the new strategies for 24 and beyond. So I think that’s a big challenge. I think overall as well, the planning has been very vital within organizations. So workforce planning is really challenged. And therefore, as a talent leader, it’s hard to determine what kind of capacity that you need.
Matt Alder: And do you think that volatility is going to get worse, better, or stay the same as we move forward?
Don Farr: That’s hard to say. When I was at Red Hat, and then after that at a couple of startups, I saw that it was always challenging to get an accurate staffing plan even a quarter out. So you had to be incredibly agile almost on a week or monthly basis. I think for a lot of organizations, that’s going to continue because there’s so much unpredictability in the business. I see this across industries. So I think it’s going to continue, and I think that there’s going to be a premium on organizations that have the flexibility to move their hiring capacity up and down as needed frequently.
Matt Alder: And tell us a little bit about the evolution of RPO. What’s been happening in the RPO sector over the last two or three years?
Don Farr: Yeah, that’s a great question, and one that I think is evolving. But when you think about RPO and many people think about RPO, I think they think about high volume. They think about the easiest vanilla roles. They think about sectors, like, the consumer sector where you have a lot of seasonality. Think about Macy’s, trying to hire for the holiday period.
What we’ve seen is that there are other companies in the tech markets, in the healthcare industry, in the financial industry that are needing to supplement their internal recruiting teams with external help. And so RPOs have really started to evolve into much more customized project based or hybrid RPO capabilities where they customize to the needs of whatever company they’re working with. That’s still evolving, but it’s certainly something that’s needed, especially given the flexibility I mentioned earlier that’s so important.
Matt Alder: Can you give us some examples of the type of projects or the way that works in practice?
Don Farr: Yeah. So I think when we meet with a customer, we’re always trying to understand what their challenges are, and then every single engagement is different based upon that. Sometimes it’s a point engagement to hire a dozen or two dozen specific project-based roles. Sometimes it’s based upon a large initiative within a function, whether that’s the go to market side of a business or the technical side of a business. But it’s not the three year, “We’re going to handle all your recruiting.” It’s more, “We’re going to be an extension to your team, partner with you, and really be a solution for you for a period of time.” And often, it’s not years, but it’s months.
Matt Alder: What’s the kind of mindset that a TA leader needs to have or develop to work effectively in this hybrid RPA model?
Don Farr: Yeah. I think what I in talking to TA leaders, the challenge is that they still have a vendor mindset when working with RPOs. And therefore, they’re rushing to set the projects up instead of really thinking through the implementation more in a partnership mindset. And that’s really critical to the success of these projects I mentioned.
Matt Alder: Particularly, I suppose, with these shorter projects, what are the advantages for using an RPO as opposed to, for example, a more traditional recruitment agency?
Don Farr: Yeah. The agencies are focused on driving fees and revenue, and they typically are higher cost, where the RPO is really focused on really the needs of the customer. Typically, they are lower costs, and they have an ability to really be focused, you have a dedicated team that’s helping you fill these roles. So I think in terms of that flexibility, it’s often a better model than you see with trying to plug an agency in and find the talent that way.
Matt Alder: What are the core elements that need to be put in place to make this work? If you’re setting up a project, what has to be established to make this a really successful relationship?
Don Farr: Yeah. I think, first, you have to really spend the time to do the proper implementation and onboarding of the RPO team. That includes creating a really clear process for, both that team as well as how it’s going to work and interact with your internal team. You need to really understand roles and responsibilities, set up a RACI model that really brings clarity to that. And then also be very inclusive in the way that you’re partnering. They need to be connected to your technologies, whether it’s the CRM or ATS. They need to be included in even team meetings. There’s got to be a very clear path for escalation and really solving problems together that come about with the business and with the existing team.
So change management needs to be a part of the plan, because for a lot of internal TA teams, they view sometimes this new presence of an RPO as threatening, when really it should be really a partnership and a way of working that’s really effective together.
Matt Alder: You mentioned technology there. Tell us more about the role of technology. I suppose, in particular, how AI is changing things or is going to potentially change things in the future?
Don Farr: So technology has always been an important part of recruiting. So for sure, the RPO team needs to be connected and leveraging the ATS, your talent CRM, if you have one. And then also, RPOs are really at the forefront of trying to figure out how to fill difficult positions, and they’re thinking through how to leverage AI to do that. So I think AI is becoming much more prevalent. Some of the RPO firms are at the forefront of looking at the innovative tools that are out there to help with screening candidates or even generating interview questions.
An example of that is, recently, I had a client who asked if we could create a culture assessment based upon the core values of the company, they had five. We were actually able to leverage some AI technology to generate behavioral interview questions to create that assessment for them and do it very, very quickly, a one-day turnaround. And they were really happy about that because they hadn’t had an assessment like that prior, and I think AI played a big part of being able to turn it around quickly.
Matt Alder: So it’s obviously been an interesting few years in terms of how TA is structured and the potential changing of relationship between TA and RPO. What do you think the future looks like? What’s the balance of the TA team in the future? What would your advice be to TA leaders listening in terms of how they should be planning for the future and visioning where their function is going?
Don Farr: Well, that’s a great question, Matt. I think the first thing is the challenge that everybody is faced with is this how do you meet the capacity when planning and staffing needs are always moving up or down very quickly? So the flexibility, agility that you need to have in your organizational structure is critical.
You have a few choices there. Traditionally, people have used agencies, maybe they’ve used some contractors, and often, they’ve just added to their team only to have to let that team go later on. I think RPOs and this new breed of RPOs can be a great solution to the flexibility that people need. And in order to do that, you need to be willing to have a partnership and really think about RPOs not as a vendor, but as a partner and the possibility of it’s being an extension of your team.
Therefore, if you’re thinking ahead as a TA leader, you need to really investigate what are the RPO organizations out there that can be that strategic partner for you and have those in place before you have a senior executive come to you with hundreds of hires that you’re not prepared to make. And if you’re really smart about it and you’ve got those partners lined up, then you’re in a better position to meet the needs of the business.
Matt Alder: I suppose as a final question, I’ll little bit of a follow up to that and coming back to AI again, do you think that AI is going to replace recruiters? Will we see a future where RPO companies are plugging in specialist AI stacks to deliver on projects?
Don Farr: I think that there’ll be components of the recruiting responsibility and model that do get replaced, but I think that for the foreseeable future, people are always going to be a part of hiring. So where I see AI really impacting things is really on the screening side, at the top end of the talent funnel, perhaps in the selection component, making interview processes a little bit more efficient, and maybe less bias. And then eventually, I think they’ll also help with making decisions on things like compensation and offers, where the AI tool actually has all the competitive information, market information, etc., to really guide an organization or a recruiter on what offer should be made. So I think there’s lots of different areas that AI will become prevalent within recruiting, but I don’t foresee a time, at least right now, that we won’t have people involved.
Matt Alder: Don, thank you very much for joining me.
Don Farr: Thanks, Matt. I really appreciate it.
Matt Alder: My thanks to Don. You can subscribe to this podcast on Apple Podcasts, on Spotify or via your podcasting app of choice. Please also follow the show on Instagram. You can find us by searching for Recruiting Future. You can search all the past episodes at recruitingfuture.com. On that site, you can also subscribe to our monthly newsletter, Recruiting Future Feast, and get the inside track about everything that’s coming up on the show. Thanks very much for listening. I’ll be back next time and I hope you’ll join me.
