What is Recruitment Process Outsourcing (RPO)
Recruitment Process Outsourcing (RPO), which is the initiative taken by a business to outsource its recruitment process – in part or entirety – to a third-party expert or a service provider, is quickly replacing all other models of recruitment to provide a more holistic workplace.
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You have heard of the term, BPO or Business Process Outsourcing; but what about the term RPO?
A seasoned HR would be quite familiar with the concept of Recruitment Process Outsourcing or RPO. For those who are not aware of it, let us discuss this crucial part of workforce planning and whether or not your business needs it.
What is RPO?
RPO can be understood as a specialised subset of BPO, where a business outsources its recruitment process – in part or entirety – to a third-party expert or a service provider. This third-party expert acts on behalf of the company to maximise the efficiency and ROI of the hiring process. An RPO service provider assumes more responsibility than a recruitment firm in the design, management and results of the recruitment process.
How does RPO work?
From in-house recruiting to a staffing agency, the hiring processes of companies have come a long way. And at the top of this chain is the RPO solution.
In the RPO model, a consulting team works with the company to understand their hiring needs and architect a solution based on it. The RPO team then takes ownership of a part of or the entire recruitment process in generating and qualifying candidates, filling current roles and, possibly, managing the future needs.
Why is RPO important?
Most leaders worry about outsourcing such a critical function to an external party. But the following reasons explain why businesses need RPO services for their survival:
- With clearly mapped strategies, RPO prevents bad hiring decisions, bringing more stability and effectiveness to the process.
- RPO offloads the hiring responsibility from your HR teams’ shoulders and allows them to work on vital day-to-day tasks.
- RPO partners with the company and works as an extension of the internal team. They are just as invested as any other member of the organisation in onboarding the right people.
- RPO providers come up with talent acquisition strategies that give businesses an edge over their competitors.
What are the common RPO models?
RPO isn’t a “one-size-fits-all” hiring solution. Based on the needs of the company, there are several models that RPO providers offer:
- On-demand model
In this model, the company has a sudden and immediate hiring need. With RPO providers already in line with the organisation’s processes, they are able to fulfil these requirements accurately and in a timely manner, saving them a lot of time and money. - Function-based model
The company that opts for this model outsources the hiring for a particular division or a project to an RPO provider. The other hiring needs are taken care of by the internal recruitment team. - Full RPO
This model is a little different; wherein the company outsources all the hiring strategies, processes and decisions to the RPO provider. Here, the RPO provider practically serves as an internal recruiting team.
What do the RPO services include?
The above models can cover one or more of the below services:
- Workforce planning
Perfect to forecast short-term and long-term hiring needs - Hiring manager engagement
Improves channels of communication between a hiring manager and the account teams - Strategic sourcing
Helps to identify the platforms where high-performing candidates are available - Pre-employment screening
Conduct thorough background checks, employment history and other records of the candidates - Early careers or graduate recruitment
Can be used to develop outreach programmes for graduates, internships, vacation schemes, apprenticeships and more - Talent engagement
Aids in positioning the company and its culture such that they can acquire the right talent - Candidate management
Delivers an efficient end-to-end experience starting from targeting the candidate to their onboarding - Recruitment analytics support
Helps to develop checklists and processes to measure and identify the metrics of the recruitment process - Compliance and risk management
Needed to ensure that all processes and operations of recruitment are legal, ethical and in line with regulations
What are the key stages of RPO?
In implementing any of the above RPO services, there are some aspects that a provider typically follows:
- Data collection – The RPO implementation manager obtains information on the company’s existing recruitment processes (e.g., trackers used, internal hire vs external hire and interview formats) and conducts a stakeholder analysis. This is the most critical milestone in implementing an RPO service and can take up to even three weeks.
- Process mapping – Based on all the responses to the above process, the RPO provider architects an exhaustive process map that identifies all the actions that will be undertaken by the internal recruitment team, HR, hiring managers and the RPO team. This document is as good as the Bible for the hiring teams and can take up to a week to be completed.
- Change management – As new teams start to expand or focus on their responsibilities, there needs to be a change management plan in place. This will clearly outline how the company should handle the internal messaging and timelines for the smooth onboarding of the RPO teams.
- Training – Every stakeholder from the company and the RPO team will undergo training to ensure the success of the process. The goal of the training is for everyone to be on the same page with the updated hiring process, technology and responsibilities.
What are the benefits of RPO?
- Scalable solutions – RPO works on the principle of a scalable and flexible solution where a business has to pay only for what they need when they need it.
- Reduced time & cost to hire – RPO providers follow strict timelines to meet the recruitment needs. Further, in the long run, RPO can offer a minimum of a 30% reduction in the cost-per-hire.
- Quality of hire – RPO providers design and follow extensive protocols to ensure hiring those people who meet the organisational needs, not just on paper, but also in practice.
- Analytics and reporting – RPO providers measure, analyse and highlight the insights from every stage of the process to allow for effective decision-making.
With its ever-increasing popularity, RPO is quickly replacing all other models of recruitment to provide a more holistic workplace. If the RPO provider and the company work hand-in-hand, there is a potential to create a win-win environment for employers, managers, HR and the candidates.
1. What is the general outlook of the business community regarding recruitment outsourcing?
Recruitment outsourcing is well received by the community. In fact, according to studies, more than 90% of hiring managers — from small, mid-sized and big companies — partially or fully outsource their recruiting function. When recruitment is outsourced, companies gain the freedom to divert their resources and attention towards other activities like product development, marketing, finance and so on. Partnering with an RPO is even more beneficial to smaller companies and startups as they do not have to spend time, effort, and funds building an HR team and on hiring. They can concentrate on their businesses, focusing on growth and expansion while the recruiter handles hiring.
2. Hiring manager or in-house recruiter — who works directly with the RPO contact?
That is, in fact, a business call. Having said that, the best RPO agencies nowadays always try to always work directly with hiring managers. In fact, the reason why they pick hiring managers is that they’re capable enough to maintain a healthy and a working relationship between the candidates and the hiring manager.
But again, who works with an RPO partner is a business decision. RPOs typically work with in-house recruiters when the hiring manager isn’t available or in situations where mass hiring needs to be done (which involves a lot of candidate processing) in the shortest time possible. Even if the in-house recruiter is the point of contact, the hiring manager must always be involved from the get-go as it can free the in-house recruiters, who can divert their attention to more critical tasks and focus on understanding how they can leverage their RPO partner’s services for their benefit.
3. Startups have small recruiting and HR budgets — wow can RPO partners help?
RPOs cater to businesses of all sizes. Their experience working on tight budgets without compromising quality is particularly of great help to startups that cannot spend big on recruitment. Startups today have a huge variety of requirements, such as onboarding, employer branding, single search, ATS, as-needed configurations, career pages and the like which today’s RPOs can easily handle.
There is no hard and fast rule — startups can opt for in-house recruitment, contract recruitment, contingency recruitment and the like. However, by partnering with an experienced and reputed RPO partner, they can experience cost and quality optimisation like never before.
4. RPO provider and a headhunter — what is the difference?
Given below are some of the areas related to recruitment that can be addressed by an RPO agency. In the case of a headhunter, they’re mostly adept at single search solutions often focusing more on filling the vacant role with a candidate.
- Employer branding
- Administrative support
- Service level-agreements
- Compliance management
- Training and development
- Change and program management
- Digital sourcing tools and channels
- Consultation, scalability, governance
- Partnership and service beyond hiring
- Real-time reporting and data analytics
- Consistency, accountability, digitalisation
5. Can RPOs handle volume hiring?
They do. Given the hiring landscape where workers are often hired on a project-basis, RPOs know that companies struggle if they are to handle volume in house. They offer mobile-friendly solutions that allow companies to assess and hire in volume quickly. They screen the candidates and allow you to scale while providing the best hiring experience to both the candidate and the hiring manager.
6. Why should an organization opt for an RPO?
There may be many reasons why an organisation would want to partner with an RPO form .But usually the reasons are either tactical or strategic. A firm, for instance, could approach an RPO if they feel that their in-house team is not up to the task. Limitations in hiring as a result of obsolete technology or bandwidth issues could also be the reasons. Companies could also be looking at changing their talent acquisition process.
7. Can RPOs integrate solutions with ATS?
Many RPO partners know the ins and outs of working with various applicant tracking systems. In fact, experienced RPOs provide and optimise their services on the basis of different tools and recruiting software used by companies. They also go as far as helping companies set up, develop and manage recruitment technology which, in the long run, eases the process of processing, sourcing, and managing employees.
8. Is partnering with an RPO provider ideal when the requirement for manpower is seasonal or temporary?
When working with an RPO partner, companies have no headcount commitment. In other words, an RPO partnership offers flexibility. If you didn’t know already, RPOs allow startups and conglomerate partners to leverage their expertise and benefits. There are no time and resource requirements at play which is ideal when recruitment is seasonal or there is a need for temporary personnel.
9. How is cost optimized through an RPO partnership?
To be clear, the cost that you will have to bear by partnering with an RPO agency depends on the services that you want. But going by public opinion, there are enough testimonials out in the open about how clients actually optimised their overall spend and cost by choosing an RPO partner over a traditional recruitment agency, headhunter or an on-site recruitment team. Your requirements will need to be assessed by an RPO partner first who can then tell you how exactly you can optimize your spend.
10. Will any of the current staff be replaced by opting for RPO services?
Not necessarily. By partnering with an RPO agency, the leadership can decide if the on-site recruitment requires either restructuring or downsizing. But you might not need to since an RPO partner will handle the recruitment process, freeing up the on-site recruitment team and the resources they use for other important HR functions.
11. Contract (Corporate) Recruiter or an RPO partner — which one is better?
The common assumption when it comes to working with a corporate or a contract recruiter is that they will quickly start off the recruitment process and start filling positions. But when working with one, you should know that they’re basically a solitary function and one person integrating with the organisation. And they call the shorts — completely. They gain complete control of the management and administrative side of the recruitment funnel. And this can be a problem as there is very little or no time left for deeper sourcing of the candidates.
Now, let’s talk about partnering with an RPO. They will manage the complete recruitment process. Furthermore, they will completely understand the recruitment solutions thats have been prepared and split the roles and responsibilities to improve efficiency and effectiveness of the recruitment plan.
What’s more, they will emphasize the overall scope and need to come up with flexible solutions that consistently provide superior results.
12. What is the minimum or maximum threshold for annual hires that justifies partnering with an RPO agency?
There are no minimum or maximum thresholds. Your need will depend on the number of candidates you want to add to your workforce. If the on-site recruitment team has their plates full and cannot dedicate the time and effort for other HR activities, then partnering with an RPO agency makes total sense. Your RPO partner will take over recruitment and offer some breathing room to the HR team.
Also, partnering with an RPO agency has other benefits apart from recruiting quality candidates. You can improve the overall candidate experience, reinforce your company’s branding activities, reduce attrition (improve employee retention), and optimize recruitment costs.
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How Can You Measure Your RPO Service Provider’s Performance?
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