Recruitment process outsourcing, also known as RPO, is a form of business process outsourcing (BPO) where an employer outsources all or part of its recruitment activities to an external service provider; as stated by the Recruitment Process Outsourcing Association (RPOA). An RPO service provider can provide its own or might assume the company’s staff, methodologies, technology, and reporting. In all cases, RPO differs considerably from providers such as staffing companies and retained search groups in that it assumes ownership of the management and design of the hiring process and the responsibility for results.
Why consider RPO?
Today, due to the COVID-19 pandemic, the recruiting environment has become very complex. To effectively hire top talent, you need to become skilled in a set of relevant technologies, navigate a tight labor market, and manage and nurture talent and hiring managers.
RPO providers can be considered as subject-matter-experts; talent acquisition is their main competency. They know how to navigate the labor market, stay up to date with the latest recruiting technology, and have the personnel and resources to scale hiring capacity to meet recruiting demands. RPOs bring people, metrics, processes, and technology into a talent acquisition function.
Depending on what a business is looking for, an RPO solution may bring an array of many benefits. The most common benefits are reducing total recruiting costs and dependency on staffing agencies; managing hiring fluctuations throughout the year. Other benefits may be reducing time-to-fill, improving candidate experience, elevating employment brand saving time for other duties, and simplifying or streamlining the hiring process.
Benefits of RPO
RPO is a solution with enormous potential. The growth in the recruitment process outsourcing market in recent years is a testament to this. As with many new ideas, there are also several inconveniences with RPO; but there are also many benefits for organizations who include RPO within their workforce planning strategies. Here is a list of some of the benefits that RPO includes:
Higher quality talent
An RPO provider’s main purpose is to ensure that your business gets the best permanent hires; even in notoriously difficult markets. With an RPO, the time, energy, and expertise in sourcing, screening, and onboarding new permanent staff ensure that a business gets the best talent. They can also create talent pools to ensure that if a new position becomes vacant. There is a ready-made line of talent ready to join a client’s business.
With the race for talent becoming more competitive than ever before, businesses also need to look to passive and underutilized talent pools to attract the best people. RPO providers have databases of talent throughout the globe; as well as schemes to attract previously ignored talent.
Another important consideration is the value of diverse teams. Research from the Harvard Business Review indicates that companies who focus on diversity perform better: 45% reported market share growth from the previous year. RPO providers who engage diverse talent pools offer big boosts to businesses.
Cost efficiency
Not only does an RPO provider ensure that you hire and retain the best talent, but it is also more cost-effective than traditional recruitment. As RPO providers are most often measured on time-to-hire, cost-of-hire, and quality of hire; their role is to ensure that permanent vacancies do not remain open for months at a time. Every day that a vacancy remains open leads to increased costs and decreased productivity. A fully optimized RPO ensures that these negative factors remain at a minimum.
Agile, scalable permanent recruitment
In any business, hiring is rarely consistent. If your business is opening up a new department, it may need hundreds of permanent staff as quickly as possible. Likewise, there can also be months that pass without a single hire. RPO providers build structures within a business that is adaptable to any situation, scaling teams up or down whenever necessary. This gives businesses the certainty they need when a sudden burst of hiring activity comes to the front.
Global compliance
Though compliance is not the most interesting benefit of RPO, it is critical. Employment laws change all of the time, staying on top of what is and isn’t compliant can be a tough order and an RPO ensures that all hires are compliant with local laws. As business becomes global, this is particularly important.
Hiring permanent staff in a compliant way in the UAE requires a very different approach to hiring in the US. A global RPO provider’s expertise ensures that businesses do not get their fingers burnt when hiring new talent. By choosing an RPO solution, businesses can use the provider’s global expertise to ensure that every single permanent employee is compliant with local laws
Reduction in advertising expenditure
Job ads are expensive. Especially when trying to attract the most competent permanent staff. Buying an RPO solution hands the pressure of finding this talent to the service provider; while spending money on advertising is eliminated.
Reduction in talent acquisition spend
Outsourcing recruitment through an RPO solution is one of the most effective ways for businesses to reduce their talent acquisition spending. Finding talent is a time-consuming process; even for the best talent acquisition and HR professionals. This is especially the case when recruiting for hard-to-fill roles.
As every business knows, time is money. According to research, unfilled jobs in the US tech market add up to a total value of $20.1 billion, and that is just on the tech market. For every position that remains vacant within an organization, a business is losing money. RPO providers, however, can quickly fill even the most difficult roles thanks to their dedicated expertise and their ready-made talent pools.
Benefit from the latest technology
Keeping up with industry innovation is difficult for HR professionals. With budgets tightening, investing hundreds of thousands or even millions of pounds or dollars in talent acquisition tech can make even the most ambitious companies wince. RPO providers regularly invest in the latest technology to ensure that clients acquire the talent they need to succeed; from high-tech VMS platforms to data analysis tools.
Enhanced candidate engagement
HR professionals understand the significance of candidate engagement (CX). Getting the candidate experience right, however, is no easy feat. Though significant, it is time-consuming and often takes HR departments away from their primary objectives. An RPO provider offers the experience and in-house expertise to fully optimize the candidate experience for a business. Not only does this increase the chances of attracting top talent, but it also impacts a business’s ability to grow its market share within its industry.
Expert employer branding
Employer branding is key to attracting the best talent in the market. 72% of recruitment leaders worldwide agree that employer branding has a significant impact on hiring.
Though hugely important, not all businesses have the in-house expertise to create an engaging employer of record value proposition (EVP); however, build a truly impactful employer brand strategy. The best RPO providers help businesses define their value to potential candidates. With experts solely devoted to EVP creation and employer brand strategists within their ranks, they can market a business to candidates. Even in difficult, traditionally challenging industries.
Better strategic insight
Data science is the foundation of any strategic decision. While HR and internal recruitment process teams are often aware of this, some things continue to hold businesses back.
For one, technology is expensive, and HR tech often finds itself low down the priority list. Also, HR professionals do not always have the technical expertise necessary to adequately analyze data. Finally, the data a company holds is only related to the company itself and does not take the wider outlook into account.
A recruitment process outsourcing solution helps in all these respects. With the latest technology and data analysis expertise, an RPO provider can assess historical industry and company data to strategically predict future talent needs. With talent being the most important aspect of any business, these insights provide highly valuable business intelligence.
Efficient recruitment processes
Within large organizations, recruitment is often approached independently in different parts of the business. While an IT division may rely on expensive, ad hoc recruitment process agencies, another may choose to use their internal HR function. Both of these approaches are inefficient. With one producing excessive spending and the other laying burden on HR departments that are increasingly under pressure to deliver results.
Under a full, end-to-end RPO solution, hiring processes are more efficient; with all permanent hiring centralized. Because RPO providers work with businesses across the globe, they also have the knowledge, experience, and best practices required to deliver the best results for a client. Rather than relying on disparate internal approaches, an RPO ensures exceptional delivery of talent throughout a business.
HR is freed up to focus on strategic goals
The role of an HR professional is tough. There are more expectations and responsibilities than ever, and yet still, few people get a seat at important board meetings. Add an overcooked talent market into the mix, and it is clear that the job of attracting permanent staff is becoming the most difficult and time-consuming task within HR teams. With this in mind, choosing an RPO solution has clear advantages.
As RPO providers take care of all permanent recruitment process and provide an end-to-end service, they take a big chunk of responsibility outside of the HR sphere. This gives HR professionals the added time and space necessary; not only to keep on top of other parts of their job, but also to develop their skills, adapt to technological change, and perhaps even get a seat at the top table.
What is the cost of an RPO solution?
The cost of an RPO solution depends on the scale of the project, and which model is used. It is impossible to put an authoritative figure on this; so it is best to contact an RPO service provider to get a real understanding of the cost-effectiveness of an RPO solution for your business.
Is RPO a good fit for your company?
For most organizations, an RPO can be a boon to business. Historically, only large organizations used an RPO. But over recent years, especially with the rise of technology, medium-sized businesses are using RPO solutions to their advantage. For any business that hires permanent staff regularly, an RPO makes a great deal of financial, structural, and strategic sense.