What Is RPO? Everything Leaders Should Know About Recruitment Process Outsourcing
June 8, 2023
Today, the hiring landscape looks a lot different than it did in years past. In an effort to streamline recruiting, 70% of companies have normalized a hybrid hiring process that leverages virtual recruiting technology according to the Society for Human Resource Management. Remote interviewing has become commonplace, bridging geographic boundaries, and expanding candidates’ options.
But what do these changes mean when recruiting new team members?
In theory, an even wider pool of talent to pull from.
In reality, hiring has never been more difficult.
Successfully navigating today’s talent landscape will require a more scalable and engaging approach: recruitment process outsourcing.
What Does It Mean to Outsource the Recruiting Process?
The short answer: RPO is the partial or complete outsourcing of a company’s recruitment process to a third-party service provider.
Now, let’s explore the longer answer to that question.
The inherent structure of the traditional workplace is changing. RPO is here to help leaders and hiring managers evolve their recruitment processes in a way that’s not only scalable but that also directly aligns their short-term hiring initiatives with their long-term strategy.
Rather than a “one size fits all” program, organizations can work with an RPO service provider to create a talent pipeline that makes the most sense for their unique business needs. Although it varies from company-to-company, some of the most common RPO offerings include:
- On-Demand/Project: Looking to hire extra support for a time-sensitive project or have an immediate need for talent in a specific department? A contract-based engagement defines the specific number of roles you need during a set period of time.
- Function-Based: In this agreement, an RPO provider will oversee a portion of your recruiting needs for the foreseeable future rather than a set period of time. This is often done for specific divisions or departments such as IT.
- End-to-End: At this stage, an RPO partner is managing every step of your recruitment process, giving you full access to their resources and expertise.
Why are RPO Services Growing in Popularity?
Although global interest in RPO services has steadily grown in recent years, it’s now clear that recruitment outsourcing is here to stay. One international report found that the industry is expected to reach a value of $21.69 billion by the end of 2027.
Why are so many companies moving toward RPO services in place of traditional recruiting? In a hyper-competitive market, a company’s greatest asset is its people and their talents.
Aberdeen Strategy and Research found that within the 60% of organizations that handle recruitment in-house, it’s more likely that internal teams lack an understanding as to what’s causing skill gaps in their workforce. Meanwhile, companies that partner with an RPO provider find that more than 50% of their workforce is “top quality.”
Globally expanding enterprises may also be looking to build up and establish brand new teams in overseas locations, where they currently have no people on the ground. By outsourcing the entire recruitment process to a trusted partner that knows the region and where to find the best talent, saves time, money, and logistical barriers.
By leveraging RPO-based hiring practices, leaders not only differentiate their companies, but they also gain access to top talent in a way traditional recruiting methods can’t.
How RPO Varies from Traditional Recruiting Methods
If you’re wondering how RPO is different from traditional staffing agencies, you’re not alone. Although there is some overlap between them, they represent two very different approaches to the talent acquisition process.
When deciding whether RPO makes sense for your organization, keep these key differences in mind:
Placement Over Fit
Recruiting agencies pull from their own pool of applicants and get paid when they “sell” you on these candidates. This means leaders miss out on other valuable sources, such as employee referral programs or their own website. With RPO, it’s different. Your provider is working for you to find the best talent, using a combination of resources to ensure you’re getting the most suitable, qualified candidate - not just whoever is available first.
When you’re working with a staffing agency, you lose much of the control you have over the culture of your hiring process and how that reflects on your company as a whole. With an RPO provider, you’ll work together to ensure that your mission and values underscore recruitment and interviewing policies.
Proactive vs. Reactive
Oftentimes, hiring initiatives are thought of as a reactive response, either to an employee leaving or a skill gap becoming more apparent. Your RPO provider will leverage advanced reporting and talent analytics to identify future opportunities to improve your overall acquisition strategy, keeping you a step ahead of the competition. A traditional staffing agency will simply react to your hiring needs as they come up.
Just remember: Recruitment process outsourcing is about more than simply filling open jobs. Instead, it’s a strategic partnership between you and your provider. Together, you’ll bridge critical skill gaps and plan for long-term initiatives by bringing together the best of people, processes, and technology.
Managing Recruitment Costs and Other Benefits of RPO
One of the most significant benefits of leveraging an RPO solution is that your provider will work with your team to understand your unique hiring needs and how they fit into your long-term goals and your unique business process.
By optimizing your approach to talent acquisition, you’ll also gain access to:
- Cost savings: Recruitment agency fees can quickly add up. Combined with the costs of subscribing to job boards and high turnover rates, leaders are left paying the consequences of a bad candidate fit. Rather than charging a salary-based commission on each candidate, an RPO provider works with you to determine your hiring needs. With that information in hand, they will tailor their services and pricing model to what makes the most sense for your organization.
- Flexibility: Your talent needs are rarely consistent month-to-month. Depending on seasonal demand fluctuations or deadline-specific goals, an RPO partner provides the option to scale their services as needed to meet your evolving recruitment goals.
- Data-driven insights: When working with an RPO provider, you’ll have access to their market-wide knowledge and reporting capabilities. This can include industry trends, patterns specific to your organizations, and opportunities to leverage new tools for your hiring strategy.
With the right RPO partner on your side, you can create a quick and efficient hiring process that helps your organization to remain competitive, better manage costs, and access new growth opportunities.
Partnering with an RPO Service
Still not certain whether an RPO service is right for your organization? As you work to make your decision, consider the following questions:
- Do you have hard-to-fill positions with very specific skill sets and talent needs?
- Are reducing employee turnover and better managing your recruitment costs both part of your organization’s long-term goals?
- Do you have fluctuating talent needs that make it difficult to predict when you’ll need to ramp up your hiring efforts?
If you answered yes to most or all of these questions, an RPO partner likely makes the most sense for your organization.
Look for partners who have industry-wide experience as well as scalable solutions focused on your needs as an employer.
Whether you need end-to-end support or are looking for on-demand services, your RPO provider should serve as your long-term strategic partners and brand champions.
Getting Started with an RPO Partner
Hiring has never been more difficult. Faced with heightened competition and widening skill gaps, leaders need tools and processes to better manage the recruitment process.
The right RPO partner can help.
Armed with an optimized approach to hiring, you’ll be able to meet your talent acquisition needs while better managing costs and staying ahead of the competition.
Ready to learn how an RPO provider could deliver value to your organization? Get started by contacting Envision today.