Why Compliance Really Matters in RPO

490654035As an RPO provider, if your compliance processes aren’t as slick as they should be, you and your clients may be at risk of fines, loss of business or worse.

Compliance isn’t often seen as an exciting side of recruitment, but it is of immense strategic importance because it impacts all the key-critical areas of RPO. Consider the implications:

Regulatory risk. The risk of a compliance breach is the single most compelling reason for RPO providers to pay attention to compliance processes. Look at Right to Work, safety, data protection, or employee competence in an increasingly freelance market. Increasing complexity of governance frameworks, and an accelerating rate of change, pose a growing threat from new penalties or increasingly severe sanctions. Depending on different sectors and geographies, this can include direct accountability for Directors even up to the point of corporate manslaughter.

Reputation. Professional standing really matters in recruitment outsourcing: what happens if you got something badly wrong? First you could lose a client, secondly a damaged reputation may impede your ability to replace the business. In a sector like healthcare, the business could even lose its licence to operate, spelling the end of the road.


ROI and reducing costs. Compliance can be a constraint on value-creation within a business because admin costs are structural, they scale as your business grows. Could you double your processing volume without significantly increasing your resource overhead? The cost of demonstrating compliance also hits the bottom line hard. Seventy percent of respondents to the U.K.’s ‘Compliance in Recruitment Survey’ last year, highlighted compliance audit as a major cost.

Requirements and retention. The bigger you grow, the more compliance you need to do. But can your systems scale-up to meet the demand, or would they start to impair speed of response? This highlights the potential pitfalls around delivering on client SLAs, retaining the clients you win, and closing out competitors. How many times have we heard of a business expanding rapidly, only to find its reputation eroded by a failure to maintain performance standards?

How to approach the compliance process conundrum. Technology ought to be able to help, because compliance is essentially all about process management – and so the opportunity to leverage automation is huge. But research in the U.K. indicates* that 40 percent of firms manage compliance by using Excel to store records. Many others do so via a CRM/ATS system.

But these are poor solutions because ultimately they are systems for recording data, and only work by consuming energy and resources within the business. And crucially, they fail to mitigate risk adequately – leaving the door open to a potential compliance breach, with all the attendant business, professional and commercial consequences.

So, the responsibility lies with RPO business leaders, who own the strategic vision and the purse-strings to move their organisation to a smarter platform for compliance – one that reinforces quality, integrity, consistency and performance.

* Source: The Compliance in Recruitment Survey 2013

MORE: The Great Convergence: MSP and RPO models coming together?

Ben Stoneham

Ben Stoneham
Ben Stoneham is founder and CEO of NowWeComply and specializes in compliance process automation and other cloud-based services for HR, staffing and recruitment industries.

Ben Stoneham

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