Recruitment process outsourcing is a business arrangement in which a company transfers all or part of its permanent recruitment to an external service provider.
An RPO provider acts as an extension of a company’s HR or people function and assumes responsibility for the management of permanent talent acquisition within a business. Typically, a team of outsourced recruiters from the RPO provider will be placed onsite at the client’s business to install the latest recruitment technology and flexible hiring processes across the business.
What is the difference between RPO and traditional recruitment agencies?
While the scope of traditional recruiters is to source and place candidates in specific roles, an RPO service provider takes control of the entire recruitment process — from talent management and candidate engagement to employer branding and supply chain management. In other words, RPO is inherently strategic.
Rather than focus on ad-hoc or short-term goals (as is often the case within traditional recruitment), RPO also strives to develop and deliver a long-term talent pipeline for a business.
What is the difference between RPO and BPO?
Owing to similarities in their respective names and methods, recruitment process outsourcing (RPO) and business process outsourcing (BPO) can often be the source of confusion.
RPO — when an employer transfers recruitment processes to a recruitment agency — is actually a type of BPO. A BPO solution is when a company outsources non-essential tasks to a a third-party vendor.
What are the most common RPO services?
This is an ongoing solution that encompasses all permanent hiring services. Though it is the most complex model to implement, end-to-end RPO typically offers the biggest cost savings and efficiencies for businesses — resulting in greater compliance and client satisfaction. As this model evolves, value-added services such as advanced workforce analytics and employer branding increase the quality of permanent hires.
This is when end-to-end RPO is applied to a specific project. Typically deployed quickly to fulfil an immediate, short-term demand for talent, project RPO is a flexible option that enables businesses to extend their in-house talent acquisition teams.
This model is similar to project RPO and involves outsourced recruiters joining an internal recruiting team to help them accelerate hiring and meet business demand at speed. While on-demand RPO is an effective reactive approach, the lack of long-term strategic planning means the benefits aren’t as far-reaching as end-to-end RPO.
Also known as point-of-service RPO or limited RPO, this model sees an RPO provider isolate, address, and strengthen specific elements of a client’s internal recruitment process — providing targeted resources to business units that have specific talent needs.
What are the benefits of RPO?
With the STEM talent market being more competitive than ever, calling on the expertise of an experienced RPO provider carries several key benefits for a business.
Better quality talent. RPO providers invest time, energy, and the resources at their disposal to find clients the best candidates on the market. Ultimately, supplying client withs a stronger quality of hire is the main purpose of an RPO provider.
Cost efficiency. The strategic and goal-orientated approach of an RPO provider aims to reduce critical hiring metrics such as time-to-hire and cost-per-hire. By honing in on these aspects, RPO frees up HR to focus on strategic goals — saving businesses money in the long run and proving far more cost-effective than traditional recruitment models.
Global compliance. Because RPO providers are experts on labour legislation, they are guaranteed to to implement fully compliant processes and methods. And with employment laws changing all the time, having this expertise to hand is vital for businesses that operate in several geographies.
Enhanced employer branding. Through excellent management of all stages of a company’s recruitment process, RPO ensures high-touch, consistent messaging to candidates. This, in turn, boosts candidate engagement and drives high levels of candidate satisfaction — reinforcing the perception that your company is a great place to work.
Innovation. To ensure they equip clients with the best possible candidates, RPO providers routinely invest in state-of-the-art technologies such as people analytics tools and high-tech VMS platforms. The deployment of these technologies provides businesses with real-time reporting and detailed insights — helping to prompt better decision-making.
Agility. The experience of an RPO provider enables you to effectively respond to external market changes, as well as anticipating and preparing for future changes.
Scalability. By adopting an agile approach to recruitment, RPO models are calibrated to accommodate any possible scenario. As such, they can be scaled up or down according to your immediate or long-term business needs.
Ultimately, RPO makes sense for any business that hires permanent talent on a regular basis. Aside from reaping the benefits of having handing the management of recruitment over to an expert partner, you’ll also have the final say on all hiring decisions.
How much does an RPO cost?
It depends. The cost of an RPO solution is calculated according to the size and scale of the solution. Other factors that affect cost include your company’s specific needs and goals, as well as the cost model of your RPO provider. Typically, RPO rates are based on monthly management, placement, and/or an agreed-upon project fee.
Because it’s hard to pinpoint a general figure for RPO solutions, it’s best to get in touch with your RPO provider to better gauge the cost-effectiveness of a prospective RPO project at your business.
Is an RPO solution right for my business?
In the past, only large companies tended to use an RPO. But with the rise of technology changing the face of modern work, small and medium-sized enterprises (SMEs) are also starting to see the benefits in partnering with an RPO service provider.
If you’re looking for a non-permanent, contingent workforce solution, a flexible MSP solution might be the best fit for your business.
Still not sure whether RPO is the right fit for your business? Get in touch to speak to an expert >