Squeezed margins are a price worth paying to satisfy clients and build business, according to the chief executive of Resource Solutions, the RPO arm of Robert Walters.

Oliver Harris told Recruiter that clients were increasingly looking for RPOs that were strategic partners, and this required RPOs to make significant investment in the support they provided to consultants. While this led to bigger head offices, and squeezed margins, those not prepared to make this investment would lose out to their competitors.

As an example, Harris said Resource Solutions now had a team of marketers providing them with the relevant tools for direct recruitment, and updates around social media. Other staff worked on social networking reports that provided clients with information, including how they were perceived across social media.

Harris said that ultimately, the driver behind the need to provide greater support for consultants, came from clients, who were demanding more from RPOs than just recruitment.

“This is what sophisticated clients want, and for those RPO providers that are focused on the cheapest way of providing candidates, my personal opinion is that they are going to be left behind.

“I believe the direction the RPO is moving in you have to offer clients this level of support, and if you are unable to offer this level of support, I think they will be looking to other competitors to provide it.”

Harris added: “It is an investment, it does squeeze the margins. However, it is paying dividends already, by helping us to have a close rapport with our clients and by raising our profile with a number of target clients.”

His comments came as Resource Solutions unveiled its Annual RPO Insights 2011 report.