the importance of an sla in rpo

©2008 ERE Media, Inc. Journal of Corporate Recruiting Leadership | crljournal.com | July 2008 9

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I n this article (with a partial SLA at the end), I will explore

some of the reasons why outsourced engagements fail,

and discuss one of these reasons in greater detail.

Let us start by understanding why companies

outsource, and identify areas where things could fall apart.

Why do companies outsource recruiting?1. An urgent need to fill critical positions that the

internal recruiting department is unable to fill.

2. An urgent need for temporary help on account of a

business acquisition.

3. New projects that they need to staff.

4. Difficulty finding quality talent.

5. Increased time-to-fill.

6. Retention.

7. Inefficient internal staffing processes.

8. Lack of proper communication between hiring

manager and recruiter.

9. Lack of metrics and accountability.

10. Lack of recruitment marketing/branding.

11. To lower costs.

12. To leverage best practices.

13. A directive of leadership.

14. To make the HR and recruiting functions more

strategic.

Why Engagements FailIn executing several large- and medium-scale RPO

engagements, I have learned several lessons on why they

fail. Listed below are a few that have been validated by

industry analysts as well:

• Improper analysis of the current state of the recruiting

function, leading to the creation and usage of an

improper delivery model.

• Inconsistent quality of services rendered by the RPO

provider—service level delivered does not match the

service level agreed to.

• Lack of support from the leadership to drive the

outsourcing initiative.

• Improper implementation—project goes live too soon.

• Us vs. them mentality between the client and the

service provider.

• Lack of improvement in candidate quantity and

quality.

• No sign of improvement in process efficiencies.

• Lack of cost savings.

• Inefficient staff.

• Metrics being tracked and reported against the wrong

baseline data.

A recent study conducted by Aberdeen Group indicates

that 53% of the customers that outsourced recruitment

cited inconsistencies in service-level delivery as the prime

reason for switching RPO providers.

This issue stems from the lack of clear understanding

on the priorities and expectations and the lack of clear

communication between the service provider and the client.

A good way to mitigate this is to structure service levels

that ensure operational compliance and success. A

comprehensive Service Level Agreement is one such tool

that will help achieve this goal.

The Salient Features of a Service Level Agreement A good SLA will cover supported services, charges for

services, service provider responsibilities, client responsi-

bilities, service measures, reporting and metrics, penalties

for noncompliance, incident reporting and management,

and change management.

Five parts of an SLA you should keep your eye on.

By Mr. Subramanian

The Importance of a Service LevelAgreement in an RPO Engagement

Some of the areas to pay special attention to are:

1. The in-scope and out-of-scope elements in the

supported services section.

2. The contracted time-to-fill days and pricing in the

charges section.

3. Timelines in the responsibilities section.

4. Data and metrics to be tracked and reported in the

service measures section.

5. The terms in the rewards and penalties section.

A well-structured SLA will ensure that the hiring

manager, the talent acquisition team, and the candidates

know exactly what is expected of them and how success is

measured.This helps set accountabilities to ensure success.

See the sample SLA for details. Please note that this is

just a template and may not be suitable for all types of

engagements.This will have to be part of a master services

agreement, which should be reviewed by your internal

legal counsel for correctness and compliance.

1. Executive SummaryThis is an operational level document that outlines

the type of services to be performed by the RPO Provider

with the understanding that the Service Level

stakeholders at _______________________. (Client) and

the project team fulfill certain obligations as listed later

in the Agreement.

On a broad scope, RPO Provider will provide

Recruitment Process Outsourcing (RPO) services -

consulting, recruiting, and other services (the “Services”)

and as described in the Services provided section below.

The terms of this Service Level Agreement will be

agreed to, accepted and executed by all the stakeholders

listed both at the Client and at _________________. Each

Statement of Work shall reference this Service Level

Agreement which shall specify the nature of the Services

to be performed, including target project commencement,

rates, deliverables and all other pertinent information

regarding the Services to be performed by RPO Provider.

2. General overviewThis Service Level Agreement (SLA) between the

“RPO Provider “and <CLIENT NAME> hereinafter

referred to as “Client” establishes a commitment for

Recruiting services as detailed in this SLA. This

document clarifies both parties' responsibilities and

procedures to ensure Client needs are met in a timely

manner.

This Agreement covers all of Hiring Managers and

the Director of Recruiting of Client and the RPO

Provider project team.

Terms

• SLA – Service Level Agreement

• RPO – Recruitment Process Outsourcing

• RPO Provider – <Name of Company>.

• Tracker – Document for tracking Candidate flow,

Metrics and Performance

• Dashboard – Document that reports the Perfor-mance,

Metrics, Initiatives, Resource changes and Risks and

their Mitigation

• ATS – Applicant Tracking System

• CTQ – Critical to Quality elements

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10 Journal of Corporate Recruiting Leadership | crljournal.com | July 2008 ©2008 ERE Media, Inc.

Service Level Agreements (SLA) for RPO Projects

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3. Terms and ConditionsAgreement period

This Agreement is valid from the effective date below

and remains in effect throughout the life span of the RPO

services rendered.

Effective date: _________________, 2008

Agreement review

The RPO Provider's designee will initiate a review of this

SLA with the Client 90 days after the effective date above.

A representative of either party may submit a written request

for review of the Agreement to the RPO Provider-Delivery

team at any time. The Agreement should be reviewed

annually. In the absence of the completion of a review, the

current Agreement will remain in effect.The RPO Provider

will incorporate revisions into the Agreement if both parties

mutually agree to the proposed changes.

New review: <EFFECTIVE DATE> Next review: <FUTURE DATE>

Note: The RPO Provider will be responsible for making

any necessary revisions to the internal incident-resolution

escalation process (for example, the individuals or groups

to be notified and the order in which they are notified)

through the Change Management Log. These revisions

could be exempt from Client approval.

Days and Hours of coverage

The services under this Agreement will be provided

Monday through Friday from ______ A.M. to _____ P.M.

<Eastern/Central/Pacific> time (except on Public holidays

or any other holidays as prescribed by the Client). Client

may request services on an emergency basis after the regular

scheduled days and hours outlined above at an additional

cost which will be mutually agreed upon.

4. Supported Services and ChargesServices provided

This Service Level Agreement describes RPO

Provider's commitment to provide the following

services:

• Overall management of the Recruitment

lifecycle through the on-boarding stage

• Sourcing and Recruitment for all the

Business units of the Client

• Full Life Cycle Recruiting entails all phases of the

recruiting process and the sub-processes that fall within

(i.e., planning, sourcing and preliminary screening,

screening and selection for interview, pre-interview,

interview and verbal offer). Full Life Cycle Recruiting

Service is delivered for both internal (processing of

internal transfers & promotions) and external hires.

• Recruiting and staffing activities will be driven by

the business unit's strategic plans and associated

workforce requirements

• Client's Brand and Image—communicating and

marketing Client's image to the talent market

must be consistent with industry standards

• Data collection and information gathering—

recruiting activities will be tracked and reported

using consistent data standards and industry best

practices

• Meeting the commitment to fill the open positions as

per the conditions of this SLA

The agreement does not cover services outside the

scope of the Statement of Work and/or the Service Level

Agreement.

Out of Scope (Examples)

• Returning retiree recruiting

• Production and Maintenance recruiting (union)

• Non US locations

Charges

In conjunction with the Program Management and

Implementation fee as specified in the Master Services

Agreement the following fee structure will be applicable.


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Roles & Responsibilities

• Project Manager—Project Management oversight to

ensure successful delivery

• Recruiter—Handles all Hiring Manager interactions at

the candidate level, Requisition Strategy Meeting with

Hiring Mangers for establishment of CTQs, Manages

requisition load and balancing, Offer Strategy Meeting

with Hiring Managers, Candidate Verbal offer,

Responsible for delivery of services as per the

Recruiting Timeline.

• Sourcing—Provides complete (active & passive)

sourcing support to the Recruiter

5. Party ResponsibilitiesClient Responsibilities

Client stakeholders agree to:

• Provide workforce planning—give a clear listing of

requisitions for the year on a quarterly basis detailed by

Functional and/or Business unit areas

• Provide clear cut and industry

standard Job Descriptions

• Provide a salary structure for open

positions that is commensurate

with the required experience and

industry standards

• Have an established Employer

branding policy

• Require the Hiring Mangers to be

accessible and available (within 48

hours of the requisition being

open) to the Recruiter for a strategy meeting to

establish the Critical to Quality (CTQ) elements and

the profile of an ideal candidate

• Require Hiring Managers to provide timely feedback

(within 48 hours) on candidates submitted

• Require the Hiring Managers and the interview team

to be available for candidate interviews in a timely

manner

• Require the Hiring Managers to provide feedback on

candidates interviewed within 48 hours of the interview

RPO Provider Responsibilities

RPO Provider and its team agree to:

• Complete the Strategy meeting within 48 hours of the

release of the position

• Provide candidate flow and submittals to Hiring Managers

per the established recruitment timeline as specified in

the table in the Charges section of this document

• Submit a minimum of 5 candidates to the Hiring

Manager that meet the job specifications.

• Have verbal offers extended to selected candidates

within the agreed time frame from the date of approval

by the hiring manager to achieve the service level

objectives on timeliness and quality

• Provide reports and dashboards at a frequency level

that is mutually agreed upon

• Work on only formally approved requisitions

• Execute the client's referral program as per the Referral

Process

6. Service Measures and ReportingThe Critical to Quality Report Outlines the Following

Areas:

Notes:

1. Each candidate must be routed to the hiring manager

by the Recruiter to be included in the above metrics

2. The RPO Provider's Time to fill clock will stop every

time there is a delay on the Hiring Manager's part

beyond the stipulated delivery times mentioned in the

Client Responsibilities (Item 6) section of this

Agreement

3. The RPO Provider's Time to Fill clock will stop

whenever there is a change in the scope, salary or

location of a position or a reporting relationship

4. Once a candidate is in the Client's database, they

cannot be submitted by a vendor within a period of 6

months from time of entry


Measurement and Reporting

1. RPO Provider will also track and provide the client with

the following overall program metrics:

a. Requisition activity

b. Time to submittal days

c. Submittal to Hiring Manager Feedback Days

d. Hiring Manager Feedback to Interview

Scheduling days

e. Submittal to Hire days

f. Submittal to Offer days

g. Formal Offer to Candidate Accept days

h. Candidate Accept to Start days

i. Overall Time to Fill

j. Source of Hire Analysis

2. RPO Provider will provide the Client with the following

reports:

7. Client Requests for Service EnhancementService enhancements are Client requests for planned

changes in service, for example:

• Setting up of a new process within the Recruitment life

cycle

• Benchmarking and write-up of Job Descriptions

• Providing new salary and compensation data

• Increasing the number of job requisitions without a 2

week prior notice

• Extensive increase (10% or more) in the number of

positions from the number originally agreed upon

Client should request services by sending an e-mail

message to the RPO Provider's Delivery Contact who will

provide an estimate of the impact of the change in the

scope of services.

Such a request must be sent at least 2 weeks in advance

of the proposed execution or implementation date.

RPO Provider will respond to requests for service

received with appropriate advance notice (see Client

Responsibilities) within 2 business days.

Financial Impact

The RPO Provider will assess and negotiate Client service

enhancement requests, taking into consideration the

enhancement's impact on existing budget and staff

resources. If delivery of service enhancements can only be

provided with funding from the Client, RPO Provider will

provide Client with a cost estimate in writing. Client will

then have the opportunity to determine whether to

proceed with enhancement.

8. RPO Provider IncidentReporting & ManagementIncident Reporting

The Client will report all

incidents to the Professional

Services Contact and should the

incident remain unresolved after

two business days of such

reporting it must be escalated as

follows:

• For all operational issues—the

Delivery Contact as defined in

the Client & RPO Provider

Contact section of this document

• For all agreement and sales related issues—the Sales

Contact as defined in the Client and RPO Provider

Contact section of this document

Incident Management Service Goals

The RPO Provider's subject matter expert or other

knowledgeable staff member will respond by e-mail or

telephone to the Client's incident within:

• 1 business day (during coverage hours) for issues

classified as urgent.

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• 2 business days (during coverage hours) for issues

classified as high priority.


classified as normal priority.


classified as low priority.

9. Client Incident Reporting & ManagementIncident Reporting

The RPO Provider will report all

incidents to the Hiring Manager/

Business Unit heads or any

appropriate Client contact as

designated by the Client. Should

the incident remain unresolved

after 2 business days of such

reporting it must be escalated as

follows:

• For all operational issues—

The Client contact whose

contact information is

mentioned in the Client &

RPO Provider Contact

section of the document

• For all agreement and sales

related issues—The Client

contact whose contact

information is mentioned in

the Client & RPO Provider

Contact section of the

document

Incident Management Ser-

vice Goals

The Client—Director of Re-

cruiting and /or Business Unit Leader will respond by

e-mail or telephone to the incident within:

• 1 work days (during coverage hours) for issues

classified as urgent.


classified as high priority.


classified as normal priority.


classified as low priority.

10. RPO Provider Change ManagementChange management refers to any event that alters the

existing state of affairs both at the RPO Provider and on

the Client side. RPO Providers seek to minimize

disruption of services by using a standard process to

communicate and implement changes.

in the table in the Charges section will be applied to

cover costs incurred. All costs will be assessed and

charged back to the Client as per the billing cycle

4. If a candidate leaves during the specified period of 30

days, a replacement will be provided at no additional

cost to the division / business (except for candidate

travel and expense)

12. Signatures of approvalBy signing below, all parties agree to the terms and

conditions described in this Agreement.

11. Rewards & Penalties

Rewards for Compliance:

1. RPO Provider will provide a _ % discount on the total

invoice amount for the month if the Client meets all the

service level terms

Penalties for Non-Compliance:

1. RPO Provider's Time to submittal clock will stop and

be reset:

a. every time there is a delay on the Client's part and

deviation from the stipulated delivery times detailed

in the Client Respon-

sibilities section of this

Agreement

2. RPO Provider will make

a 15% upward revision in

price whenever there is a

change in the scope,

salary or location of a

position or a reporting

relationship

3. Settlement of canceled

requisition to hire: If the

requisition is cancelled

for any reason after 10 days of the requisition being

released, a charge of 50% of the price per hire as stated

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Mr. Subramanian is a leading subject-matter expert and a consultant in the areas of RPO, Staffing, and HR. His internationalexperience includes work assignments in Asia,Africa, Europe, and North America. He has over 22 years of operations experience,15 of them in the human resources function that spans the gamut of RPO implementation, setting up and management ofstaffing/recruiting functions, staffing/recruiting process improvement, creative sourcing strategy, metrics and reporting, implemen-

tation of HR policies and procedures, employee management and retention, employee development, and employee referral programs for small-and large-cap companies. Subramanian has provided recruiting and RPO-related consulting services to GE Healthcare, Freddie Mac, CoramHealthcare,Yoh HR Solutions, Kelly IT Resources, HR First, Illuma,Allscripts, eLoyalty, Zorch, and Norvax.

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