Recruitment Process Outsourcing: Why Every Enterprise Needs It

Recruitment Process Outsourcing: Why Every Enterprise Needs It

Every recruiter wants to be able to bring on board the smartest and the brightest hires, and do so quickly else they could lose out on great talent. A lengthy and prolonged recruiting process can be expensive, inefficient and, frustrating. If the structure and resourcing aren’t in place to effectively screen and source candidates for key requirements, it will eventually have a negative impact across the business. There can be a knowledge gap between internal recruiters of different departments, in addition to high pressure to ensure that the talent supply chain functions smoothly.

That’s why many organizations have been considering outsourcing parts or all of, their recruitment process.

What is Recruitment Process Outsourcing?

Recruitment Process Outsourcing (RPO) is about an enterprise outsourcing large parts or all of their recruitment process to a specialized vendor. RPO goes much beyond traditional staffing outsourcing. It encompasses a much wider scope of the recruitment process to include functions leading up to, as well as following the actual hiring. RPO is also about enhancing the overall recruitment process in the organization, thus reducing internal HR time and allowing HR teams to focus on other strategic tasks.

How does RPO work?

An RPO provider assumes ownership of the design and management of the recruitment process and the accountability of results. The vendor works as an extension of the HR team and could be located off-site or on-site. The RPO partner invests time in understanding the structure and culture of the organization and outline the key characteristics of the ideal employee for the job.

An RPO engagement is never purely transactional. It includes everything from the advertising and sourcing for the role, to each stage of the interview process to ensure that all of the skill and culture requirements are met to the highest standard, to the required background checks and reference checking, all the way to the formal offer, contract duties, placement and, onboarding.

RPO vs a recruitment agency

The traditional recruitment agency is involved with the recruitment process only as much as the client wants. Typically this means sourcing candidates for vacancies, communicating between the organization and the candidate, screening and shortlisting candidates for an interview, and helping the candidate with salary negotiations, CV refining, etc.

In the case of RPO, the agency manages the entire recruitment process. In addition to the duties of a traditional recruitment agency, the RPO provider will also take on tasks like recruitment marketing and advertising strategy, candidate screening, interviewing and shortlisting, testing and selection, background checks, placement, and onboarding, etc. And each of these services can be amped up or reduced throughout the year depending on the organization’s needs.

The benefits of RPO

Better quality hires

RPO providers invest their time and resources into sourcing, screening, and presenting the highest quality available talent for any vacancy. The aggregated talent stream offers a curated pool from which to search. 

Cost efficiency

Every day that a position remains vacant could cost an organization. Filling vacancies fast is better for productivity and reduces the number of HR resources spent on sourcing candidates. The hiring process is faster and more targeted when an RPO agency is engaged. RPO helps organizations save money in the long run. An RPO engagement can be scaled up (during expansion) or down (downsizing) to match the fluctuating hiring needs of the client. RPO providers can calibrate their structures to adapt to any situation. The client only pays for successfully filled vacancies.

Faster hiring

RPO resource models can also scale to overcome the challenge of tight hiring deadlines thanks to established models.

Talent Pooling 

A key reason supporting shorter hiring times is that RPO providers tend to have a ready talent pool of strong candidate profiles ready and actively engaged for future hiring.

Reporting

RPO providers actively track and analyze every aspect and stage of the recruitment process. These analytics allow for real-time reporting and detailed insights for prompt decision making, auditing as well as enhancing future recruitment activity. 

Regulatory compliance

RPO agencies need to stay tuned into the latest labor laws, regulations, and standards; and are guaranteed to implement fully-compliant, auditable processes and methods. Internal HR teams are involved in a multitude of other activities and may not always be aware of changes in federal rules.

Reduces advertising costs

Recruitment advertising can be very costly, especially if the HR team is not clear about their requirements. This expense gets drastically reduced when an RPO provider is engaged because they will assume responsibility for finding the candidates and bringing them to you by using their existing resources for finding suitable prospects.

When do you need an RPO provider?

Here are some possible reasons that indicate an organization may need to engage an RPO firm

High-volume and project-based roles

RPO is useful for high-volume recruitment, roles on a project-to-project basis, or when an enterprise needs to replace its internal recruitment function altogether.

Long hiring cycles

Long hiring processes impact business goals, drives up recruitment costs, and reduces productivity. Another reason why it could be taking too long to fill roles is you might not have access to enough candidates. RPO firms can provide the expertise needed to fill vacancies from a larger talent pool, and even identify and improve problem areas in the recruitment process.

High churn rate

There can be several reasons why employee churn is high in an organization, but quite often it happens due to poor screening of candidates resulting in unsuitable hires, a mismatch in culture and/or a poor onboarding process. An experienced RPO provider takes ownership of these duties and looks at every step of the recruitment process to find the best fit.

Varied needs and specific roles

Some organizations offer a wide range of services with lots of different skills needed. Relying solely on an in-house recruitment team in such a scenario is never a good idea. RPO providers have wider experience and have created pockets of industry expertise within their firm so that they can help fill a variety of roles and meet different skill requirements.

Market Dynamics

According to a Grand View Research study, the global RPO market is expected to reach USD 20.8 billion by 2027, fueled by a growing demand for streamlined recruitment processes, reduced talent acquisition spend, and efficient hiring practices. A Deloitte study shows that 59% of businesses are using outsourcing to reduce expenses, while a Computer Economics report highlights that 65% of businesses are likely to increase their RPO efforts in the future.

Popular website Glassdoor estimates that unfilled vacancies in the US technology market alone add up to a total value of USD 20.1 billion. For every position that remains vacant within an organization, a business is losing money. RPO helps quickly fill even the most difficult roles with their dedicated expertise, established practices and ready-made talent pools.

Remember that RPO is more than just filling vacancies. It is also about forging a partnership and enhancing an organization’s recruiting process with both short and long-term results. RPO providers work with businesses across the globe and thus have the knowledge, experience, and best practices required to deliver the best results. That’s why RPO is becoming an increasingly popular hiring solution for employers who want access to the best talent in an efficient, professional and cost-effective way.

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