In NelsonHall’s 2015 RPO Market Analysis report, innovation was identified as a key vendor selection criterion. RPO clients are increasingly seeking vendors who will continually introduce new ideas and recommend new services, with continuous process improvement.

However, in our parallel RPO NEAT vendor evaluation study, when we interviewed clients of 15 leading RPO vendors, ‘innovation and creativity’ scored the lowest in terms of client satisfaction (68%), while ‘ability to be proactive with ideas for change’ scored just 73%. Verbatim comments from clients interviewed included:

“They provide us with the quarterly business review, but the topic isn't focused on improving, it's usually on current state and issue resolution.”

“Suggestions keep coming up in our business reviews, yet when I ask for data to support those things, it’s not there.”

“They don't drive anything to us that we can see.”

“That's the piece that's really missing.”

The good news is that ‘improved recruiting processes’ scored well at 81%. But clearly innovation is an area where vendors can improve and seek to differentiate themselves.

The November edition of HRO Today magazine featured an article by Beth Gilfeather, CEO of Seven Step RPO, entitled ‘Pinpointing Innovation, Three Ways to Determine if Your Talent Acquisition Process is Ahead of the Curve’, in which she identified the following criteria:

• It must be breakthrough
• It must be proven
• It must be continual.

In effect, vendors need to have specific mechanisms in place to address innovation – it just doesn’t happen by itself.

To ensure there is a dedicated focus on breakthrough innovation, several vendors have launched Innovation Centers, including:

• ADP Innovation Lab in Chelsea NY, with focus on new product development within HCM, including creation of a new user experience
• Ochre House, now Cielo, launched a COE to drive innovation and growth, to focus on new talent developments
• Kelly Services launched an office of innovation, to develop and implement custom workforce services
• The Infosys Innovation Lab, which functions as a place to innovate and co-create apps with clients
• Accenture establishing a Center for Innovation in Dublin, with R&D and design expertise in cognitive computing, IoT, advanced analytics, security and digital marketing.

Innovation is also a critical determinant in the client’s decision-making process when it comes to contract renewal time. Not only for RPO, but across HR service lines, lack of innovation has been cited as one of the primary reasons for changing vendor.

As Beth states in her article, innovation needs to be continual, and certainly it should be an agenda item for discussion at every joint vendor/client operational team meeting and every governance team meeting. From my own client outsourcing and governance team experience, innovation is most likely to occur when it is a shared responsibility between client and provider with both parties contributing to the process.