What is RPO (Recruitment Process Outsourcing)?
RPO (Recruitment Process Outsourcing) is kind of a workforce solution in which a business transfers or contracts all or part of its recruitment process to third party specialist or to an external business service provider. This business model allows organization to scale resources as the need fluctuates so they can meet hiring demand without increasing budgets to pay for in-house recruiters or recruitment agencies. Apart from RPO, learn more about Different types of Services offered by Staffing Agencies.
How does RPO (Recruitment Process Outsourcing) work?
An RPO (Recruitment Process Outsourcing) service provider acts as an in-house recruitment team for a business or an organization providing efficiency and flexibility to the recruitment process with their expertise. It relieves employers and HR professionals of extra administrative burdens and delivers a seamless, high-touch experience to the job applicants.
A comprehensive RPO (Recruitment Process Outsourcing) partnership offers daily administration and big-picture, strategic guidance across the entire recruitment process from talent consulting to on boarding support to the organization. These services are typically underpinned by a flexible Applicant Tracking System (ATS). All sourced and recruited candidates are exclusive to the client that they are partnered with and are not shared with any other clients.
Three basic types of RPO (Recruitment Process Outsourcing) Engagements
- End-to-end RPO - 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 for the organization, as well as technology investments. End-to-end RPO typically offers the biggest cost savings and efficiencies for businesses and typically leads to greater client satisfaction with the seamless results. End-to-end RPO service evolves, value-added services such as employer branding increase the quality of permanent hires.
- Project RPO - A Project RPO also utilizes an end-to-end process but is deployed to quickly bring in experts to fulfil an unexpected staffing need, on a single project work basis. For example, launching a new sales or digital transformation team. It means business will take help of third party to build their specific teams, sales or digital transformation.
- On-demand RPO - Similar to a Project RPO but more short-term, an on-demand RPO involves recruiters joining organization for a short period of time to rapidly attract and hire the talent they need. Often, an on-demand RPO is sought out during spikes in hiring needs. 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.
How much does RPO (Recruitment Process Outsourcing) cost? RPO Pricing Models
Employers generally pay for RPO in one of the following ways:
- Cost-per-hire - Businesses pay a fixed cost per hire for different levels of positions.
- Cost-per-resource - Each resource assigned to a client is billed at a fixed monthly rate.
- Hybrid - Blended models combine cost-per-hire and supplemental, resource-based pricing.
- Transaction-based - Employers are charged for each interview, background check, etc.
Of these options, most employers prefer the cost-per-hire model because of the flexibility it affords. As hiring volumes increase or decrease, so do recruitment expenses. Cost per transaction, on the other hand, can be expensive for businesses that process a high number of candidates for the open jobs positions.
Why consider RPO (Recruitment Process Outsourcing)? Benefits of RPO.
At any time, but especially during rapid change, RPO can help employers maximize their budget and improve productivity and retention at the same time. Other benefits to outsourcing talent acquisition include:
- Reduced Recruitment Costs - Due to its scalability, among other factors, RPO may lead to hard and soft cost savings that multiply at a similar percentage each year for the business.
- Compliance Support - RPO providers who can keep pace with changing regulations may build automated compliance support into all stages of recruitment for the organization.
- State-of-the-art Technology - Some RPO providers supply an ATS or will support their client’s existing technology so they can track candidate statuses, improve communication between employers and applicants, and deliver a seamless positive hiring experience.
- Faster Time to Fill - The right RPO provider will help in identifying barriers, continually tweak processes and ensure accountability so that positions are filled faster than expected.
- Decreased Turnover - When hiring and on boarding processes of an organization are consistent and streamlined, new employees tend to be more engaged and less likely to leave the organization.
- Diversified Talent Pools - RPO providers may have established partnerships with diverse organizations; networks and colleges that can help employers attract underrepresented talent.
- Advanced Analytics - Real-time data and benchmarks, both of which are generally available with RPO, can help guide an employer’s recruitment tactics and provide valuable insights.
Is RPO (Recruitment Process Outsourcing) right for your organization?
When considering RPO, employers must carefully evaluate their people, processes and technology. If any of the following challenges are uncovered during the assessment, outsourcing recruitment may be warranted:
- Limited hiring team bandwidth
- Compliance risks
- Seasonal hiring demands
- High recruitment costs
- Lack of specialized recruitment expertise
- Decentralized or inefficient processes
- Lack of data and reporting capabilities
- Organic growth, mergers, acquisitions or expansions
- Limited applicant tracking system functionality
How is RPO (Recruitment Process Outsourcing) different than other outsourced recruiting options?
Traditionally, organizations hire through one of three recruiting options: internal recruiters, staffing agencies, and contract recruiters. Until recently, few organizations were aware that Recruitment Process Outsourcing could be a viable or available solution to their recruiting.
Unlike other outsourced recruiting models, Recruitment Process Outsourcing is a strategic partnership that brings additional value-added benefits to the organization, including:
- Analysis and Planning. When run effectively, RPO providers work with the clients to understand the business side of recruitment or business goals. They help clients forecast staffing needs and plan the necessary resources to respond to these needs, which help achieve those business goals.
- Extensive Job Marketing. RPO providers market client jobs through job boards, social media, referrals, and networking to drive candidate exposure to jobs and employer brand (a major differentiator from staffing solutions).
- Sourcing and Engaging Talent. In addition to finding talent, RPO providers build up employment brand and recognition; engage future potential top talent through talent communities and talent pipelines; and source candidates in advance and with multiple sourcing assessments.
- Candidate Assessments. RPO providers assess candidates, guide them through the whole recruitment process, and make sure they have the core skills, competencies, and motivators to do the job.
- Candidate Care. Managing the candidate experience is very important as it reflects on the employer brand. RPO providers help clients take care of the candidates and manage their experience throughout the recruitment process, whether they are being interviewed, hired, or considered for the job.
If you have understood RPO well then here are two more articles we would suggest you to go through, What is BPO? Complete guide about BPO and What is KPO? Complete guide about KPO.