how a multi-country RPO can minimize the impact of talent scarcity for European companies

May 2, 2016 Ron Bosma

In a highly diverse labor market such as Europe, talent scarcity is increasingly a concern for business leaders across the region. Having posted strong growth last year following economic stagnation since 2010, the region is now primed to get on solid ground, with demand for skills rising. I see this as being good and bad news for you talent leaders

According to the UK’s Telegraph, the 28 economies of the EU reported GDP growth of 1.9% in the third quarter of last year from a year ago, just slightly behind the US economy. The EU unemployment rate is now 9.3%, which is the lowest it has been for more than six years. Weaker economies such as Spain and Italy are still struggling with high (youth) unemployment, but they are improving. Meanwhile, talent demand in countries such as The Netherlands, UK and Germany remains strong; these economies will need lots of skilled workers to keep their markets moving forward. Here’s where the good and bad news come in.

The good news for business leaders in the region is that with strong markets come strong opportunities for your companies. Germany, for instance, is expected to grow 1.5% this year, slightly lower than 2015 but nevertheless a healthy level. The UK last year grew at a red-hot 2.2%, and even Ireland bounced back with a GDP growth of 6.9%. This is all encouraging news for business leaders who hope the rising European tide will lift their boats along with everyone else. And that takes us to the bad news.

As companies across the region capitalize on growing markets, they will compete for the same talent. That’s bad news for you. You know firsthand that recruiting top talent and scarce skills is difficult in this environment, and it’s only going to get tougher. I increasingly hear HR executives lament the scarcity of talent. It’s a situation impacting the business and raising concerns among the C-Suite. In our 2016 Talent Trends Survey, 63% of talent leaders with responsibilities for European operations said the scarcity problem is having an impact on business, and 89% say their executives have made talent acquisition a priority.

a new direction for RPO

So I get asked a lot, “How can you help? We've been supporting customers through recruitment process outsourcing solutions for many years, but the urgency I see in their eyes today is taking RPO down a new direction in Europe. Buyers in the past often experimented with RPO in a single market, wanting to establish a proof of concept before they make deeper investments in the solution. Some of the more mature, multi-country programs we administer took years to establish, but many deals inked today are skipping the experimental stage to a full-blown program covering multiple countries and even multiple regions. RPO, for a growing number of buyers, is the expedient remedy for their talent scarcity headache. There are several reasons behind this trend.

  1. Companies need recruitment help. Many European organizations simply haven’t kept up with investments in recruitment. As a result, they are falling behind competitors who have. They see multi-country RPO’s as a holistic solution that can address multiple talent pain points.
  2. It’s a well-proven solution. RPO has been around for more than a decade, and today’s solutions are mature and highly sophisticated. Although the biggest market is the US and UK, some of the most mature programs originated in Western Europe. In the past, European adoption was sluggish for a variety of reasons (regulatory barriers, union consent, market structure), but many of those barriers have been minimized so buyer confidence today in RPO is high.
  3. Providers have “glocal” capabilities. Many service providers operate under a global governance structure but have local expertise to optimize their recruitment effectiveness. To European buyers, this is especially important because they want consistency of process across all of their markets but also an understanding of each one to account for local differences in employment regulations, talent and cultural preferences and employer brand strategies.
  4. Increased talent mobility. More than half of talent leaders we surveyed said they have changed their definition of “perfect” talent by expanding their geographic area of search. A multi-country or multi-region RPO enables employers to broaden their search criteria, which is especially important in Europe as there has been significant migration of skills from Southern Europe to Northern Europe and Eastern Europe to Western Europe in recent years. With geography less a barrier to finding quality talent, organizations need to have recruitment capabilities across the region in order to compete.

Multi-country RPO is an ideal approach to recruitment in Europe because it addresses many concerns that talent leaders have around talent sourcing and engagement, compliance with numerous jurisdictions, talent mobility and process consistency. Just recently, we’ve seen numerous clients in industries such as science and engineering, automotive, life sciences and others adopt such an approach. Of course it’s a more complex solution than single-country RPO but the gains are well worth the investment. So is it a solution fit for your needs?

  1. To start off, does your organization operate in numerous countries and does it recruit and hire through a convoluted processes using disparate technologies? If so, multi-country RPO can help standardize and optimize your recruitment efforts.
  2. Does your recruitment and hiring process offer a consistent candidate experience across your European footprint? A multi-country RPO can help ensure your candidates have the same experience in Budapest as they do in Barcelona.
  3. Are hiring costs spiraling out of control across all markets? This is often an indicator of a recruitment process not working effectively, leading to increased agency usage.
  4. Finally, is there consensus among key stakeholders that your program isn’t delivering talent when business leaders need them? Again, if talent scarcity is impacting growth, it’s time to look at an external solution.

As talent scarcity continues to grow in Europe, you don’t need to be troubled by the trend. Consider how an external solution across numerous countries can help you standardize your processes, reduce costs, improve your employer brand and win the talent you need to capitalize on the better times ahead.

About the Author

Ron Bosma

Ron has 24 years experience in the staffing and Consulting industry. Ron joined Randstad in 1986 and has been responsible for Randstad Sourceright in the Netherlands since 2009. In this capacity he is closely involved in the ongoing development and implementations of Randstad Sourceright and specialized sourcing models at national and international customers. He has an extensive understanding of implementing customer made sourcing models including supporting applications like VMS systems. Philosophy in life: "Every day new challenges and opportunities..."

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