blogs & articles

A complete guide to understanding Recruitment Process Outsourcing (RPO)

April 26, 2023

TL;DR

It is almost impossible to maintain a constant need to hire. Whenever there is underutilization or overutilization of an internal recruitment function, Recruitment Process Outsourcing (RPO) comes in as an efficient alternative to increase hiring without having to constantly either expand or shrink your workforce. This resource will help you understand what RPO is all about and when it can be applied.

In today’s uncertain economy, HR professionals are facing a tougher-than-ever talent market. As hiring fluctuates, businesses are necessarily downsizing their talent acquisition teams, only to be met with a sudden need to rapidly assemble a larger talent function. A global talent shortage is making it hard to find the candidates.

Now organizations need to have more strategic, holistic, and innovative approach for recruiting and retaining the talent. They also need team that can respond quickly and adapt as hiring demand changes.

Thankfully, this is not a challenge that organizations need to tackle alone. Now organizations don’t have to address these hiring challenges alone. A Recruitment process outsourcing (RPO) partner can help to us  amplify your talent acquisition processes and optimize your hiring power in an increasingly competitive market.

An RPO service company can enhance the hiring process because it will be able to bring in recruitment expertise and technology to acquire talent acquisition efficiently. However, how does recruitment process outsourcing operate and differ from traditional recruitment? This guide to RPO covers all this.

What is Recruitment Process Outsourcing?

The Recruiting Process Outsourcing (RPO) model involves collaboration between an organization and an outside service provider to handle certain aspects or the whole recruiting process of the organization. Based on the needs of the organization, the RPO provider can assist with the particular phases of the recruiting process or the complete recruiting process itself, this includes:

Job advertising
Candidate sourcing
Resume screening
Interview
coordination
Offer management and onboarding

Or, if you go for hiring instead of onboarding, an RPO provider can support every stage of the hiring process, including:

Advertising open roles
Sourcing qualified candidates
Screening resumes
Coordinating interviews
Hiring and Onboarding Management

RPO partners can manage certain processes in your recruiting process from assisting your ATS to collaborating with your hiring team and even maintaining your compliance requirements. There can be levels of management that you would need depending on whether you hire via RPO only for specific processes or all the recruitment process.

In recent years, RPO has evolved beyond simply supporting foundational tasks in hiring processes. Today, many RPO providers have more holistic expertise that ranges from Talent Acquisition advisory, to employer branding, and diversity, equity and inclusion (DEI).

How does Recruitment Process Outsourcing work?

The RPO suppliers can be seen as the extension of your HR team so that they integrate into your hiring function seamlessly. With the right RPO partner in place, once you do everything properly, neither your team nor the candidates will feel like they are being outsourced but instead, it will feel like your team’s expertise has grown along the way and your RPO partner has integrated with your organization.

This one is non-negotiable too because the RPO supplier must have good understanding of your culture and try to build a strong relationship with your organization.

What is the difference between RPO and in-house recruitment?

The primary distinction between RPO and internal recruiting lies in the fact that the RPO partner will be an external company that will be integrated into your organization. The RPO partner will be deeply involved in your organization and will work in close collaboration with your HR and talent acquisition team.

What are the key performance indicators of RPO?

RPO providers use key performance indicators (KPIs) to measure their performance. Some of the most most commonly used KPIs for RPO are:

Improved candidate quality
Improved time to hire
Reduced costs
Candidate and hiring manager satisfaction rates

An RPO partner’s goal is not simply to fill headcount. Armed with an in-depth understanding of your business and unmatched expertise in the talent market, they will work rigorously to secure the very best people for it, whether that’s filling current vacancies or building your future talent pipeline as efficiently and cost-effectively as possible.

What are the different types of RPO models?

When it comes to the simple question, ‘how does RPO work?’, there is no one-size-fits-all answer. While there are  three main RPO models, all can be tailored to meet your unique needs. An RPO provider will work alongside you to determine which model best suits your organization .Here is an overview of the different models you may encounter. For a more detailed review, check out this article: What are the different types of Recruitment Process Outsourcing (RPO) models?

RPO Model	Duration	Description
Enterprise RPO	Over two years	Long-term partner handling all recruitment, ideal for ongoing, high-volume hiring needs. Enterprise RPO manages the recruitment lifecycle.
On-demand RPO (or Project RPO)	Six months to two years	Agile solution for short-term recruitment projects. It provides flexibility to adapt to changing business demands and bridges talent gaps.
Hybrid RPO	Custom	Tailored mix of Enterprise and On-demand RPO, adapting to different needs across the business for varied support where needed.

Benefits of Recruitment Process Outsourcing

Partnering with an RPO partner means harnessing decades of market expertise across a wide range of global industries and recruitment campaigns. Whether you are hiring for a team of thousands or just a few, if you are seeking permanent or contingent, hourly or executive talent, your RPO partner has seen it all.

Rather than replacing your TA team, partnering with a trusted RPO provider will future-proof and supercharge your existing in-house capabilities. If you need support in just one or all the below areas, outsourcing your recruitment process offers a range of benefits:

Increase agility
Reduce costs
Access the best and widest talent pool
Discover more diverse talent
Improve your employer brand
Build the right tech stack
Craft the best candidate experience
Reduce time to hire

1. Increase agility

To mitigate the uncertainty caused by a fluctuating talent landscape, RPO partners are masters of scalability. They can support HR departments in managing these peaks and troughs, moments of high growth or a hiring surge, followed by periods of employee reduction, at speed.

Crucially, an RPO partner will also take on internal hiring risks, allowing businesses to scale their own TA capabilities as the market demands. This helps avoid any rapid decreases or increases in team headcount, which can be a hit to brand reputation.

Working closely with an RPO expert, you can always be ready for what’s next.

2. Reduce costs

The built-in agility afforded by an RPO partner allows businesses to scale cost up and down in line with demand, as well as your TA function. Consequently, companies have realized that recruitment outsourcing provides them substantial cost savings, particularly when compared with the employment of a staffing firm, through better procedures, economies of scale, and the utilization of lower-cost recruiting channels and technology.

3. Access the best and widest talent pool

An expanded pool of talent is available to the RPO provider. Their large pool of recruitment specialists makes it easy for them to locate, reach out to, and recruit the right talent for the job.

An RPO partner will also help organizations tap into hidden talent streams. These include existing internal networks – nurturing and upskilling talent already inside the organization. They will also have data-led insights on different industries that are ripe with skills-adjacent talent, which your TA team may not have considered before.

Rethinking internal mobility and bringing in more strategic, skills-based hiring practices has huge advantages in terms of loyalty and recruitment cost, leading to increased productivity and reduced turnover. An RPO provider will be a close advisor in the journey towards a more skills-focused talent function.

4. Discover more diverse talent

Some RPO providers specialize in DEI. This enables them to help companies source talent by actively thinking about underrepresented individuals and forgotten demographics.

A strong RPO partner can review your current attraction strategies and routes to market against in-depth market data to pinpoint exactly where this diverse talent is. What’s more, they have access to sourcing channels that are specifically aimed at minority groups.

With a partner that is truly experienced in DEI, inclusive recruitment becomes standard for your business. RPO providers can also help to implement any changes made to your DEI strategy and ensure they are long-lasting with real impact.

5. Strengthen your employer brand

It has long been known that an effective EVP is associated with lower attrition rates as well as improved productivity and impact on the bottom line. However, in a challenging talent environment where candidate evaluations of the organization are increasingly stringent, standing out has never been more crucial.

Many RPO providers can improve employer brand as part of their expert service. An RPO partner knows how to develop an authentic and compelling EVP. Being fully immersed in the organization’s brand, they will be able to tell your story in a very convincing way in a compelling and convincing way that resonates with candidates.

6. Create the right tech stack

Among thousands of different talent technology solutions available, it can be difficult to identify which are right for your business.

A qualified RPO partner will identify the best technology stack for your business goals, whether that’s streamlining candidate processing, or insight-led sourcing. RPO providers regularly trial, rate and rank new solutions on behalf of their clients, giving them deep insight into the talent tech landscape. They can also train TA teams on using the resources if businesses decide to embed them in house.

7. Craft the best candidate experience

The experienced recruiters that come with working alongside an RPO partner will expertly navigate candidates through every stage of the hiring process. While accessing powerful talent technology is important, RPO partners understand that technology alone will not help you hire better but optimizing how people use it will.

With the right mix of tech and touch, RPO services allow you to find candidates quickly and efficiently, without missing out on the real, human connection that attracts them to your business. Many RPO partners have expert teams dedicated to candidate experience advisory services.

8. Reduce time to hire

A broader and more diverse pool of talents an efficient technology-driven approach, Market insights powered by data and modern-day approaches to sourcing.

All of the above means that organizations partnering with RPO experts typically find that time to hire comes down. Working with a close partner on these key business elements allows you to find the right candidates faster and move them into roles with ease.

Why hire an RPO?

A recruitment process outsourcing (RPO) partner is a cost-effective, scalable solution to recruiting, hiring and onboarding talent. An RPO partnership is one that can act as an extension of your HR team to enhance your team’s agility and responsiveness to market conditions.

If you are unsure whether you should partner with an RPO provider, it’s helpful to ask the following questions:

Do you find your hiring constantly fluctuating with business demand?
Do you have hard-to-fill roles?
Is time to hire and cost to hire going up?
Do you receive complaints from hiring managers about candidate quality?
Having a problem with retaining your employees?
Are you seeking data and insights or information that can guide your hiring process?
Are you trying to make your hiring process more data-driven?
Having difficulties with meeting your DEI targets?
Do you struggle to keep up with the fast-moving talent technology landscape?
Are you looking to build a more effective and agile talent acquisition team?

If the answer to any of the above is ‘yes’, an RPO partner can be an invaluable addition to your talent team. Discover how to build a business case for RPO in your organization today.

FAQs

How is RPO different from recruiting?

In-house Recruiting Team is run by the organization itself, whereas in Recruitment process Outsourcing, the organization works with the third-party external partner and treats the third-party partner as the extension of the organization to handle the end-to-end recruitment process from sourcing to onboarding.

What is the difference between recruitment process outsourcing and staffing?

Recruitment Process Outsourcing (RPO) refers to the outsourcing of the complete recruitment process to an external partner for a long period of time. Meanwhile, Staffing Agencies assist in hiring both temporary and permanent employees whenever there is a need without being a part of your internal team. The RPO Partners operate similar to the conventional HR Teams and assist in the whole process of recruitment from beginning to end

What is the difference between RPO and HRO?

Recruitment Process Outsourcing (RPO) refers to the outsourcing of the complete recruitment process or its parts to an external partner. On the other hand, Human Resource Outsourcing (HRO) refers to all HR processes and services such as payroll, benefits administration, etc.

What are the different types of RPO models?

The three types of RPO models are Enterprise RPO, On-Demand RPO, and Hybrid RPO. In enterprise RPO, recruitment requirements are handled on a continual basis. In on-demand RPO, short-term project recruiting needs are catered to. Hybrid RPO is a combination of both.

What is the difference between MSP and RPO recruitment?

MSP is managed service provider, which focuses on the management of contingent staff, temporary staffing, and vendor management. RPO is recruitment process outsourcing that caters to the process of recruitment for permanent positions.

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