What is Recruitment Process Outsourcing (RPO)?

Recruitment process outsourcing is the process of a company transferring all or part of its permanent recruitment to a third-party service provider. The RPO provider is responsible for the management of the permanent recruitment within a business, and typically has outsourced recruiters based onsite — embedded within the HR function for the business. An effective RPO programme installs a talent acquisition team, the latest technology, and flexible processes within an organisation.

What are the benefits of RPO?

 

  • Higher quality talent
  • Cost efficiency
  • Scalability
  • Compliance
  • Reduction in advertising expenditure
Recruitment process outsourcing is a solution that has enormous potential. The growth in the RPO market in recent years is a testament to this. As with many new ideas, there is some buzz that cloaks RPO, but there are also a number of clear benefits for businesses who embed RPO within their workforce planning strategies.
1. Higher quality talent

Finding the right talent for your business is becoming increasingly difficult. An RPO provider’s main purpose is to ensure that your business gets the best permanent hires, even in markets which are notoriously difficult. With an RPO, the time, energy and expertise in sourcing, screening and onboarding new permanent staff ensure that a business gets the best talent. They can also create talent pools to ensure that if a new position becomes vacant, there’s a ready-made line of talent ready to join a client’s business.

2. Cost efficiency

Not only does an RPO provider ensure that you hire and retain the best talent, but it’s also more cost-effective than traditional recruitment. As RPO providers are most often measured on time-to-hire, cost-of-hire and quality-of-hire, their role is to ensure that permanent vacancies do not remain open for months at a time. Every day that a vacancy remains open leads to increased costs and decreased productivity. A fully optimised RPO ensures that these negative factors remain at a minimum.

3. Scalability

In any business, hiring is rarely consistent. If your business is opening up a new department, it may need hundreds of permanent staff as quickly as possible. Likewise, there can also be months that pass without a single hire. RPO providers build structures within a business that’s adaptable to any situation, scaling teams up or down whenever necessary.

4. Compliance

Though compliance is not the most interesting benefit of RPO, it’s critical. Employment laws change all of the time, and an RPO ensures that all hires are compliant with local laws. As business becomes global, this is particularly important. Hiring permanent staff in a compliant way in India requires a very different approach to hiring in the US. A global RPO provider’s expertise ensures that businesses don’t get their fingers burnt when hiring new talent.

5. Reduction in advertising expenditure

Job ads are expensive, especially when trying to attract the most competent permanent staff. Buying an RPO solution hands the pressure of finding this talent to the service provider, and spending money on advertising is eliminated. 

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How RPO is different from traditional recruitment

The recruitment process outsourcing industry may have emerged from the recruitment sector, but there are significant differences between RPO and traditional recruitment. An RPO service provider doesn’t just fill permanent roles on an ad hoc basis, it embeds itself within an organisation, fundamentally changing the way a business hires permanent talent.

Though no two solutions are the same, a good RPO solution is strategic. It should take ownership of the design and management of the recruitment process. It should embed the latest technology to ensure maximum efficiency, it should provide regular data analysis, and it should provide regular reports on the effectiveness of the solution.

What are the typical RPO services?

1. End-to-end RPO

An end-to-end RPO can be used in a single business division, a single market, or a global enterprise. It encompasses all permanent hiring services, as well as technology investments. An end-to-end RPO typically offers the biggest cost savings and efficiencies for businesses and typically leads to greater client satisfaction. As an end-to-end RPO service evolves, value-added services such as employer branding increase the quality of permanent hires.

2. Project RPO

A Project RPO also utilises an end-to-end process but is deployed to quickly bring in experts to fulfil an unexpected staffing need, on a single project basis. For example, launching a new sales or digital transformation team.

3. On-demand RPO

Similar to a Project RPO but more short-term, an on-demand RPO involves recruiters joining your team for a short period of time to rapidly attract and hire the talent you need. Often, an on-demand RPO is sought out during spikes in hiring. Though it allows businesses to move quickly, the benefits aren’t as extensive as an end-to-end RPO solution as it lacks technology implementation and added benefits like employer branding.

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Securing a genuine RPO

RPO is one of the fastest-growing solutions for businesses looking to make permanent hires, but there are things to watch out for. Some recruitment businesses may claim to offer genuine RPO solutions but are only riding the crest of the wave, without actually having the expertise or technology embedded within their offerings. Simply recruiting permanent staff is not an RPO solution, it’s recruitment.

If the RPO solution you’re offered is not strategic in its outlook, doesn’t embed itself within your organisation, and doesn’t incorporate data analysis and reporting, it’s not an RPO solution. Though the industry is more mature than it was ten years ago, there are still some temporary and permanent staffing agencies seeking to expand their business simply by following trends.

What technology is used in RPO solutions?

Technology is changing our world. It’s also changing RPO. From talent analytics to machine-learning, candidate screening to automated sourcing, the best RPO providers harness advanced staffing technology to provide a highly-efficient, cost-effective hiring process. And as technology advances, genuine RPO service providers will too.

Typically an RPO would incorporate technology such as:

1. An ATS (Applicant Tracking System)

2. A CRM (Candidate Relationship Management) tool

3. A dedicated careers site

4. An internal talent community platform

Increasingly, businesses within the RPO sector are also seeking to harness the power of artificial intelligence (AI), optimising solutions for big, global businesses in a way previously seen before. Though it’s implementation is in its infancy, AI is likely to play a big part in the development of RPO in the next five years.

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What is the cost of an RPO solution?

The cost of an RPO solution depends on the scale of the project, and which model is used. It is impossible to put an authoritative figure on this, so it’s best to contact an RPO service provider to get a real understanding of the cost-effectiveness of an RPO solution for your business.

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Is RPO a good fit for your company?

For most organisations, an RPO can be a boon to business. Historically, only large organisations used an RPO. But over recent years — especially with the rise of technology — medium-sized businesses are using RPO solutions to their advantage. For any business that hires permanent staff on a regular basis, an RPO makes a great deal of financial, structural and strategic sense.

Looking for a non-permanent, contingent workforce solution? Click here to determine if an MSP solution is right for your business.

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Need a workforce solutions partner?

If you’re looking for a workforce solution that exactly meets the selection criteria for your organisation but not sure where to start, look no further! Based on our experience of responding to 1000s of RFPs from organisations across the globe, we’ve put together the first instalment of our ‘Creating an RFP for outsourced workforce solutions’ guide.

The aim of this guide is simple: to help you understand and structure an RFP in a way that gives you the highest likelihood of finding an outsourced partner who delivers the right outsourced solution for your organisation.

Download our guide to get started

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