Recruitment process outsourcing, or RPO, allows agencies, startups, and large enterprises to grow their workforces, hire at scale, and maintain a high caliber of talent without overextending their internal resources. Because modern recruiting involves multiple complex, interconnected steps, many businesses rely on RPO to achieve their hiring goals, whether they outsource the entire recruiting operation or insulated portions of the process. As outsourced solutions become more prominent, employers of all sizes are beginning to explore a critical question: “What is RPO?”
By exploring the basics of recruitment process outsourcing and how it works, employers can determine if an outsourced solution is right for their team and, if so, what extent of support makes sense for their organizational goals.
What Is RPO?
RPO is the process of hiring a specialized third-party company to take over some or all of an organization’s talent acquisition functions. It’s a specialized form of business process outsourcing (BPO) that homes in on hiring and recruiting activities, from scouting and sourcing all the way up to onboarding and training. It acts as a scalable solution that enables internal HR professionals to quickly and efficiently fill talent gaps, regardless of how hiring demands fluctuate over time.
How Recruitment Process Outsourcing Works
In a nutshell, recruitment process outsourcing works by integrating directly with a company’s existing recruitment processes. RPO firms will collaborate with their clients to identify hiring needs and establish metrics for success. Based on initial alignment meetings, providers will take on key elements of the hiring process, ideally creating a seamless, efficient talent acquisition engine.
RPO encompasses several core aspects of recruiting: advertising, sourcing, screening, interviewing, and onboarding. Because providers understand how to recruit employees who fit well with any given role, they can leverage each of these elements to help their clients secure qualified, reliable hires.
For example, a business may hire a third party to provide an out-of-the-box, end-to-end recruitment system, where outsourcing professionals independently post job ads, screen candidates, conduct interviews as representatives of their clients, and even begin the training process. Meanwhile, another business may hire the same third-party provider to exclusively source and screen applicants and then feed approved candidates back into their internal interviewing systems. Outsourcing professionals can also offer strategic recruitment consulting and administrative support to bolster existing talent acquisition processes without fully offloading those tasks.
Benefits of Using a Recruitment Consultant
Common Types of RPO Models
RPO providers specialize in these recruitment tasks, so they cultivate systems, sources, and tools designed to fill a high volume of roles at any given moment. This enables them to provide a high volume of quality candidates from reliable sources, whether they need to hire for a single short-term project or launch a significant expansion campaign. These are just a few examples of commonly employed RPO models:
- Enterprise: As an end-to-end, long-term solution, enterprise RPO involves outsourcing recruitment activities to a third party. The provider may have a strong strategic role while also carrying out the day-to-day tasks of finding, vetting, and interviewing candidates.
- Project-based: This model offers temporary hiring support for a specific project or hiring initiative. A company may intermittently hire third-party assistance for on-demand, short-term assistance.
- Hybrid: With hybrid outsourcing, businesses use a blend of full-service and temporary recruitment services to support their fluctuating workforce management goals.
RPO Costs and Pricing Model
RPO pricing is typically linked to the volume of services an employer uses, regardless of whether an employer is hiring for a short-term project or contracting an RPO team on an ongoing basis. This can manifest in a few different pricing models:
- Cost-per-hire, where businesses pay a certain amount for each role they need filled.
- Cost-per-transaction, where clients pay for each individual hiring task, including screening calls, interviews, and onboarding sessions.
- Fixed-fee, where the provider bills clients at a consistent monthly or hourly rate for a certain set of end-to-end recruiting services.
Companies with a predictable, ongoing amount of work often opt for a fixed fee, as they easily budget for a consistent level of support. However, they may also use cost-per-transaction or cost-per-hire models for additional, unexpected support. Cost-per-hire is the most common model, as costs naturally fluctuate based on demand, but cost-per-transaction may also make more financial sense for low-volume, short-term projects. It’s critical for each employer to review their projected needs to find a pricing option that suits their recruitment goals and budgetary restrictions.
The Benefits of Recruitment Process Outsourcing
RPO fills a critical need for flexible, scalable, and reliable hiring support for companies with complex workforce management needs. Experienced outsourcing companies have the potential to provide their clients with several key advantages of external recruitment:
1. Faster Hiring Timelines
To launch a large-scale hiring project internally, an employer may have to start by simply building out their HR team, which can take a massive investment of both time and resources. Meanwhile, external providers have their recruitment engines churning at all times, enabling them to fill roles quickly.
2. Cost Savings
Cost-effectiveness is one of the main appeals of an outsourced recruiting solution. Third-party recruitment specialists operate at scale, have access to advanced applicant tracking systems, and can effectively leverage offshore resources; all of these elements enable them to maximize returns and minimize costs. Total recruitment costs for a single position often soar into the hundreds of thousands of dollars; employers would have to invest a massive portion of their budget into recruiting if they wanted to rely exclusively on internal teams to achieve the same results in terms of both quality and quantity.
3. Improved Workforce Planning
Outsourcing companies have access to advanced tech and analytics tools, giving them expert insights into hiring trends. They can leverage this information to support long-term strategic planning, address internal challenges, and embrace upcoming opportunities.
4. Consistent Regulatory Compliance
Because third-party recruiting providers are talent acquisition experts, they know all of the ins and outs of labor regulations and hiring best practices. Regulatory compliance is already built into their processes, so you can trust that they’re representing your company appropriately and minimizing potential liabilities.
When To Use Recruitment Outsourcing
Outsourcing can be a helpful tool in many situations, but it isn’t a catch-all solution for all recruitment situations. For example, outsourced support is typically well-suited for filling a high volume of entry or mid-level positions; internal hiring processes or boutique staffing support may be more appropriate for filling executive roles. Other situations where outsourcing may be ideal include:
- Rapid expansion projects and mergers.
- Fluctuating seasonal demands.
- Startup environments.
- Companies with high internal recruitment costs.
Finding Your Staffing Solution
After exploring the question “What is RPO?”, you now have a strong baseline for one of the major types of outsourced hiring support. However, not all recruiting specialists are created equal; to be successful, they need to have a refined communication process in place, industry-specific knowledge, and the ability to follow through on key metrics for success.
As one of the top recruiting firms for professional enterprises, Daley And Associates offers the time-tested staffing expertise needed to help you find the right candidate every time. We have recruiting systems in place to support employers with a wide range of hiring needs, from bespoke executive search to project-based, temporary staffing for administrative and technical roles. Reach out to our team today to see how outsourced staffing can transform your hiring processes.
