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Permalink Reply by David Mitchell on July 23, 2008 at 1:40am

Firstly, I would like to say how encouraged I am to find a RPO Group with whom I can share thoughts and ideas. We are pioneers of this approach in South Africa and I often feel very lonely in this market. We believe the concept has the potential to transform the way our clients acquire talent, but it is not an easy sell.
In my experience, the decision to move to a RPO solution usually takes 6-9 months. There is a significant amount of lobbying amoungst stakeholders that needs to occur, just to get everyone on the same page. Our philosophy is that even a single hiring manager, who is not onsides, can make life almost impossible once the deal is signed. We have even walked away from potential clients where a single, but significant stakeholder shows signs that they do not buy-in to the concept.
We also undertake significant research of our clients to gain a full understanding of what we are getting into. This process involves a meeting with each hiring manager to understand their specific needs, recruitment volumes, staff turnover, current process - what works and what doesn't and what they want from a Recruitment service provider. It is on this basis that we develop our proposal. All this work, incidentally, is undertaken at our cost. Our proposal is then discussed with each hiring manager, HR and senior executives to ensure that the solution we are proposing meets their needs. We would then present the solution to our sponsor within the organisation - in most cases the CEO. It is then tabled at Exco and Board meetings, where the final decision is taken.
If accepted, we then require a 3 month start-up period before we do any recruiting. During this period we agree on the Service Level Agreement, Redesign the recruitment process - including the development of templates for each step of the process, train our client's staff on the process and manage their expectations of what to expect and ensure that our staff going on-site fully understand what our deliverables are.
The 3 month period described above is over and above the 6-9 month sales cycle. It is, therefore, very unusual for us to start any actual fee generating work for 9-12 months from the first discussions with a client.
Like Bob, I would be very interested to know if our experience is similar to others operating in this sector.

Permalink Reply by Peter Brasket on July 29, 2008 at 12:33pm

Hi Bob - just joined this forum and am not surprised to see a lack of replies to this interesting question - folks keeping things close to the vest; but permit me to answer from a related industry perspective (we're not an RPO provider).

The average transaction value for Jobs2Web (enterprise web 2.0 talent acquisition services) is approaching $75K/annum, with a number of major accounts 2-3x that amount. The economic buyer is typically VP Recruiting/Talent Acquisition. Target organizations for the service are typically F1000, with many F100 users. Offering scales down to i.e. a hospital level with 100-200 open headcount.

The average length of sale may not be directly comparable to RPO services, but we're seeing sales cycles lengthen in 2008 vs. 2007, even as the # of inbound inquries has exploded. Sales are closing, but instead of a 60-day cycle we're seeing 90-120 day cycles typically. Unlike RPO space we typically do not have competing offerings in the cycle, so that helps our decision cycle.

I hear this is also the case within the reruitment advertising agency space, and within the large job-board space.