This document discusses the pros and cons of using an internal recruitment model versus outsourcing recruitment processes to an external Recruitment Process Outsourcing (RPO) provider for a large education company. The company currently experiences high teacher turnover of 48% annually. Using an RPO could help reduce turnover through standardized recruiting practices and free up management time spent on recruiting. However, building an internal recruitment team would allow the company to better embed its culture in new hires. A business case is recommended to compare the full costs and potential benefits of each model over 5 years to determine the best approach.

1. RPO Or Not?

2. Shanil Kaderali – Sr Director, Talent Acquisition, Knowledge Universe
 Recruitment Strategy & Management roles with Cisco Systems, WellPoint
 Developed internal models growing teams from 0 to 50+ recruiters for high volume and complex
hiring (high tech and health care)
 Worked within RPO – Hyrian
 Managed Talent Sourcing for United Health Group – 14,000 hires/year
 Managed clients like Kaiser, Disney Interactive Group
 Implemented RPO model at WellPoint for approx 2-3K jobs/year
Knowledge Universe
 Largest employer of early childhood education nationwide – 300,000 students
 Private Portfolio Company
 Multiple brands – KinderCare, Champions, CCLC
 $3B; 33,000 employees; 1700+ Centers in US
 Global division focuses on K-12, College. HQ is Singapore
 13,000 hires/year in US
2
INTRODUCTION

4. IMPACTING YOUR BUSINESS WITH EFFECTIVE
RECRUITMENT: WHICH IS BETTER? RPO VS.
INTERNAL?
Efficient
Recruiting
Increase
Consistency
Reduce Time-to-Fill
Reduce Cost
Effective
Recruiting
Increased Candidate
Quality
Improved Hiring
Manager Experience
Enhanced Selection
Process
Realize Greater
Business Impact
Increased New Hire
Productivity
Improved Employee
Engagement
Greater Revenue &
Profitability
TIME
BUSINESSIMPACT
4

5. 5
RPO PROVIDER LANDSCAPE
Recruitment Staffing Search
Originally RPO was ..
…with metrics
that affect Critical
Service Levels
Strategy & Assessment Pre-
Employment
Processes
InterviewingTestingScreeningSourcing Hiring Offer
Package
On
Boarding
…Today RPO has evolved into an end to end solution..
…Supported by
Applicant
Tracking
Requisition
Management
Candidate
Data
Management
Systems
Integration

6. 6
RPO PROVIDER LANDSCAPE
Legacy Temp Staffing
Organizations
> Spherion
> Kelly – HR First
> Momentum – Volt
> ManPower
> CDI
Specialty/Search Firms
> FutureStep
> Hudson
Pure RPO
> The Right Thing (ADP)
> Pinstripe
Origins
HRO Providers
> *IBM
> Aon Hewitt
Entering the NA Mkt
> Talent 2 (Asia)
> Alexandar Mann (Europe)
Subcontracting HRO providers
in RPO deals

7.  Blend of internal recruiters, sourcers and coordinators to fill hiring needs
 Based on current model and lack of technology, initial investment in staff
could be approximately 45 resources for 12,000 teachers
 Staffing would require 3 mos.
 Technology investment and implementation would require min 6-9 months for
enterprise system
 Does TA have leverage for economies of scale regarding job board postings
investment?
 Hiring teachers can (and should) be a source of competitive advantage which
may occur within internal – Internal recruiters learn the culture
 Internal models provide more control
 Internal model has demonstrated good understanding of culture
7
IN-HOUSE MODEL

8. 8
WHAT MODEL TO USE?
VS
Internal Model vs RPO Model
• Full Time Sourcing Employees as part of Recruitment organization or Outsourcing it to a vendor (ex, Right Thing, Aon,
Pinstripe, etc)
• Internal model works well for Senior level positions (Apple, WLP, etc) - This model generally has the recruiter as main
POC for hiring manager and managing the various recruitment processes
• RPO works very well for high volume positions (Call Centers, etc)
•
• Here’s a SECRET:
• You can do both!
• Blended Models work the best for overall needs

9.  RPO has become much more sophisticated in last 5 years with advancements in sourcing,
technology and globalization
9
CASE STUDIES
• Wall Mart reduced <90 day
turnover from 54% to 30%
(Over 4,000 hires )
• Pepsi - Turnover in first 12
months reduced from 28% to
6% for bottling plant
employees (over 2,000 hires)
• Decreased Agency spend by
70%
• Decreased Sourcing Costs by
47% in Six Months
• RPO Examples
• Good with high
volume,
replicable
positions (Call
Center, Retail,
Finance)
• In-House Models have leveraged strong assessment technology and enterprise ATS
• During tech boom, Cisco
Systems hired close to
19,000 professionals in 1
year with internal
recruitment, sourcing teams
(FTE & Contractors)
• Successful high volume
recruitment – 10,000+
• Decreased Sourcing Costs
with internal hiring team
• In-House
• Complex roles,
strong culture
tied to brand

10. 10
COMPARE THE MODELS FOR YOUR NEEDS
In-House
• Enhanced quality of hire
• Reduced time to fill
• Control over recruitment processes
• Potentially lower cost for KU over long run
• Reduce turnover
• Recruiters embedded into culture
• Large recruiting team would need to be put in place*
• Higher start up costs
• Technology upgrade needed?
• Is it scalable quickly?
• Longer timeframe to implement for labor, technology and
branding if lack of infrastructure?
RPO
• Enhanced quality of hire
• Reduced time-to-fill
• Scalable Model
• Reduce technology investments*
• Standardized processes
• Reduce turnover **
• All inclusive Pricing/ Fees At Risk of SLAs not hit***
• Learning culture to manage internal hiring process
• Disconnect b/w company and vender goals
• Dependent on vendor quality
Benefits
Concerns
* When technology is bundled into service
** Vendors with standardized process, testing and resources
improve quality
*** Fees of approximately 5-10% at risk if turnover is not
reduced per Service Level Agreement (SLA)

11.  Define your business problem
 Compare the models for your specific needs
 Determine total cost of the problem
 Develop a business case
 Compare the baseline (current approach) to RPO and Enhanced Internal Model?
 Apples to Apples check
 Cost per each model
 5 year analysis
 Review Price of Postings to Job Boards are covered (ex, Monster & Careerbuilder) – Reduce KU
advertising spend by 50-70% (Est. Savings would equalize
 Review technology advantages of each
 RFP, Visit the RPO firms
 Change Management: Ensure there is EVP HR, Client & CEO level support
 Decide and Just Do it
11
NOW WHAT DO YOU DO?

12. WHAT IS YOUR BUSINESS CHALLENGE?
TURNOVER? QUALITY OF HIRE?
12,200
Teachers left us and required backfills!!!
25,318
Teachers worked for us
In 2011…
For RPO vs. Internal Hiring model,
1) Define the problem
2) Compare Pros/Cons of the models to help with your hiring needs
3) What is the problem costing the company?12
What type of teacher issue did you have (KinderCare)?

13. 13
Teacher
Turnover
- 48% in 2011
- 12,200 teachers
Unhappy Parents
• Parent Retention
• 20% of parent issues involve teacher
turnover
Future student achievement weaker due to teacher turnover
Accreditation
challenges
Labor issues – ex, Managers in classrooms
(Finance)
Hard Costs
$12M/year
$900 turnover
cost per hire
Lost
Revenues:
$2-$18M/year*
Productivity
Losses:
$8M/year**
Negative
Brand Impact:
$TBD M/
year***
TOTAL COST APPROACH – COST OF THE PROBLEM:
Negative Social Media Brand impact
Longer time to fill positions
* Estimate from Ops (Kindercare Regression Analysis)
** Estimate from TA – High Time to Fill teacher roles (+35 days)
***Estimate from Marketing
• Finance costs include advertising, EA costs, training time (Hard Costs)
• Estimate for Interviewing time costs for CDs (20 hours – Soft Cost)

14. 14 8/29/12
DEVELOPING THE BUSINESS CASE
1. Provides a common point of measurement to compare
Service Provider pricing to WellPoint’s cost of providing
the in-scope activities.
2. Provides “apples-to-apples” comparison between
Service Providers (generally with a moderate amount of
“normalization”).
3. Becomes the primary yardstick to measure both the
“total cost of delivery” and helps to determine the
general size of the transaction.
4. Determine if there is a business case to move forward
with an RPO model for WellPoint
 Focus on RPO vs Internal

15. 15
VALUE PROPOSITION
Speed
Cost
Quality
Recruitment Process Outsourcing vs. Internal Model
Managing Processes
• Enterprise Workflow Management
• Best Practice Consulting
• Sourcing Channel Management
• Vendor Selection
• Process Mapping
• Paperless Operations
• Robust reporting and metric
distribution
• Data Analysis
Reducing Costs
• Pre-Employment Selection
• Success Profiling based on your high
performers
• Reduction in turnover through selection
reduces refilling of positions
• Direct Recruiting provides a dedicated
team at a fraction of agency fees or
temporary employee costs
• Sourcing Channel Effectiveness
Analysis
• ROI Analysis will tie hiring practices
into business outcomes
Improving Quality
 “Single Source” Accountability
 Continuous Measurement and
Improvement
 Revalidation of Selection
programs and retention
performance
 Holistic program approach
 Overall performance accountability
management
 State of art technology and staff
training
 Retention Services to reduce
turnover and staffing costs

16. RPO
$4,200K
$800K
$5,000K
$426
In-House
$3,600K*
$2,200K**
$5,800K
$484
KU Baseline
$6,000
$1,600K
$7,600K
$633
16
COMPARISON – FUTURE STATE – RECRUITING COSTS
PER HIRE MODEL
RPO Includes posting costs;
metrics (daily, weekly); technology
KU doesn’t have; sourcing and
branding expertise and scalable
resources . Cost is $350 per hire
KU would invest in ATS
Technology, Sourcing,
Branding
Baseline would eventually
require investment in TA
foundation (ATS, Sourcing,
etc.)
Total Labor/Service Costs =
Non Labor Delivery Costs =
(Advertising, Sourcing, Technology,
Background Checks)
Total Costs =
Cost Per Hire =
(KU CD Time vs. In-House
Recruiters VS RPO Fees)
Based on 12,000 Hires

17. CURRENT VS RPO MODEL
Current
Model RPO
(2013) Variance
Total
Delivery
Cost
(12,000
Hires) 4,200,000
4,200,000
Recruitment
Technology/Transi8on
Costs 79,000
79,000
Hiring
Costs
(EA,
Training)
-­‐
$486
per
Hire 5,830,000
5,830,000
-­‐
Sourcing/
Adver8sing
459,000
272,000
187,000
Interview
Time
Costs
(SoN
Costs)* 6,000,000
1,200,000
4,800,000
Turnover
Reduc8on
Benefit (1,125,000)
Total
Recruitment
Costs
$12,289,000
$10,456,000
$1,8433,000
Turnover 48%
43%
5%
17
 $1.8
Million
LESS
cost
than
current
baseline
approach
 Technology
–
We
would
incur
a
cost
for
technology
maintenance
with
the
RPO
 Sourcing
costs
are
reduced
with
RPO.
Es8mate
is
$272K
reduc8on
 RPO
Model
will
save
16
hours
from
CD
Time
(20
hours
with
current
model
and
4
hours
with
RPO)
–
Source:
Finance*
 Turnover
Reduc8on
Benefit
–
The
is
a
guarantee
of
5%
points
(48%
to
43%
ex)
–
Turnover
Reduc8on
with
Fees
at
Risk
in
CY1
–
For
1
year,
es8mate
is
1,250
hires
saved
@
$900
per
replacement
hire
–
Source:
Finance

18. 18
8/29/12
RPO VS BASELINE– 5 YEAR SUMMARY –
TEMPLATE BUS CASE
(in
1,000's) CY0 CY1 CY2 CY3 CY4 CY5 5
YR
TOTAL
Baseline 0
2,029
2,029
2,029
2,029
2,029
10,146
Supplier
Price 0
1,325
1,325
1,325
1,325
1,325
6,627
Normaliza8ons 0
(227) (227) (227) (227) (227) (1,135)
Retained
to
Go-­‐Live 0
97
0
0
0
0
97
Retained
Organiza8on 0
820
820
820
820
820
4,100
Governance 0
0
0
0
0
0
0
Turnover
Benefit
Impact 0
0
0
0
0
0
0
Total
OperaYonal
Savings 0
14
111
111
111
111
457
Savings
% 0% 1% 5% 5% 5% 5% 5%
Supplier
Transi8on
Costs 0
0
0
0
0
0
0
Wellpoint
Transi8on
Costs 200 0
0
0
0
0
200
Total
TransiYon
Costs 200
0
0
0
0
0
200
Net
Savings
Before
Tax (200) 14
111
111
111
111
257
Savings
% 0% 1% 5% 5% 5% 5% 3%
•
One
Time
TransiYon
Costs
in
Yrs
0-­‐
1
for
severance
•
Total
transiYon
esYmated
cost
of
approx
$200K
(Severance
&
Taleo
expenses)
•
RTI
soluYon
will
save
WLP
approx
$111k/year
from
years
2-­‐5
&
$14K
in
year
1
• WLP
will
save
approx
$257K
over
5
years

19. 19
WHICH MODEL OFFERS MORE SCALABILITY?
Requisition
Volume
Peak Season/High Volume Low Volume
Resource Baseline
Incremental
resources are
deployed to
handle peak
volume
Enables provider or internal to deploy resources as needed.
The ability
to adjust
increases
efficiency
reducing per
hire cost

20. Teacher
Hiring
Strategy
BIG PICTURE – COST, QUALITY, COMPANY IMPACT
Enterprise
o Align sourcing channels to
strategic direction/talent goals
o Increase of quality hires
o Create hiring consistency
across LOBS
o Potential $180M in revenue
gains
o Significant benefits from 5%
turnover reduction (improved
retention rates)
o $1.5M in savings vs.
current approach
Candidates
o Understand a clear
and compelling
Candidate Value
Proposition
o Experience a
seamless recruiting
process – their
expectations are
surpassed
o Generate positive
feedback about KU
Hiring Leaders
o Experience a seamless
recruiting process – with
superior customer
service
o Have an increase in
quality hires
o Cost-effective process
o Increased productivity
through 10% Time to fill
reduction
Recruiters
o Understand and
support strategic
vision and innovation
o Provide seamless
recruiting process
o Deliver extraordinary
service and
experiences
o Support cost-effective
process
o Track key metrics and
trends
• 10% reduction in time to fill
(SLA) would potentially yield
$8.8 million in productivity
gains
• Hires would be onsite on
average, 5 days earlier
• For every 1% reduction
in turnover, there is a
$18m potential revenue
gain & hard cost
savings of $228,000
• Pilot cost are
manageable TBD) given
ROI
• Recruiters can
scale and manage
larger number of
requisitions as
needed – Improved
Productivity
• For every positive
interview experience,
candidates generally tell
3 other individuals -
approximately 40,000
face-to-face interviews
resulting in positive brand
impact with 120,000
individuals
• Approx. 192,000
hours or 13 days
given back to CDs
to spend with
teachers and
families
• Build interviewing
skills working with
recruiters

21. Value to Families: HappyChildren/Higher Parent
Retention
RPO is $1.8M less cost vs.baseline model
Hire Better Teachers/Less
Turnover
$2-18M in Potential
Revenue Gains
Big Change Management
$3-4M Annual
Incremental Cost
MAKE THE DECISION: WEIGH PROS AND CONS
Benefits = Highly Efficient, Scalable, Maximum
Support for Hiring Managers, Cost Effective
21

22. 22 8/29/12
WHEN SHOULD YOU USE
INTERNAL MODEL VS. RPO?
1. Complex, niche based positions (Statisticians at senior
levels)
2. Roles which require sensitive political savvy within an
organization
3. Directors and above
4. For ALL your hiring needs
5. TA/HR Strategy (today) – that is for TA professionals to
provide the strategy and have RPO execute it

23. 23 8/29/12
PerformanceMgmt.
SuccessionMgmt.
LearningMgmt.
TOTAL TALENT MANAGEMENT – FUTURE
CONSIDERATION
Manage the entire talent pipeline (Internal & External) – What supports TM better?
RPO or Internal?
Talent Reporting & Analytics
ATS
Talent
Managemen
t

24. 24 8/29/12
24
Anticipated change in labor flexibility techniques over the
next three years: How does this impact RPO vs Internal?
7%
4%
4%
10%
9%
Hiring part-
time workers
Off-shoring
Bringing back
retired workers
Outsourcing 37% 56%
40% 56%
43% 53%
Using temporary /
contingent workers 40% 50%
59% 32%
Decrease No change Increase
Source: IBM 2010 CHRO Study
Which model is better with systems for these alternate
sources?

25. 25
And will you succeed?
Yes! You will indeed!
(98 and ¾ percent guaranteed).
Today is your day!
Your mountain is waiting.
So... get on your way!
— Dr. Seuss
(“Oh! The Places You’ll Go”)