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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In 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 Fail
In 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 Level
Agreement 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 Summary
This 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 overview
This 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 Conditions
Agreement 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 Charges
Services 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 Responsibilities
Client 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 Reporting
The 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 Enhancement
Service 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 Incident
Reporting & Management
Incident 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 & Management
Incident 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 Management
Change 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 approval
By 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 international
experience 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 of
staffing/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, Coram
Healthcare,Yoh HR Solutions, Kelly IT Resources, HR First, Illuma,Allscripts, eLoyalty, Zorch, and Norvax.

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