What is Recruitment Process Outsourcing?

Definition and examples of Recruitment Process Outsourcing
By Abhishek Kathpal Updated 07 August, 2022

Organizations must be able to successfully navigate a competitive labor market as the employment environment becomes increasingly complex. In order to properly recruit top talent, they must become skilled in a variety of pertinent technology as well as manage, and develop both recruiting managers and prospects. As a result, the majority of businesses use the services of Recruitment Process Outsourcing (RPO) providers that are experts in talent acquisition and subject-matter expertise.

What is Recruitment Process Outsourcing

Recruitment Process Outsourcing meaning and definition

The Recruitment Process Outsourcing Association (RPOA) describes recruitment process outsourcing (RPO) as a sort of business process outsourcing (BPO), in which a firm outsources all or a portion of its employment processes to a third-party service provider (RPOA). With the least level of participation from HR professionals, RPO is a method for delivering quality applicants to a potential employer.

An agreement between an employer looking to fill vacancies and a company that outsources the recruiting process would charge that company with finding, screening, and evaluating qualified candidates. Employers typically use recruitment process outsourcing, which is mainly used by medium- and large-sized businesses, when they need to discover people in specialized or technical domains. RPO can be helpful in a competitive labor market where it might be difficult to attract potential new workers by bringing fresh perspectives, knowledge, and emphasis to the problem while freeing up HR staff to focus on internal tasks.

What is the difference between RPO providers vs. Traditional staffing agencies?

Internal recruiters, staffing companies, and contract recruiters are the three recruitment channels that most businesses use to fill open positions. Prior to recently, few firms were aware that outsourcing the employment process was a practical or affordable choice. Finding individuals and placing them in the necessary roles will be the role of conventional recruiting agencies. On the other side, an RPO provider is in charge of organizing and managing the hiring process. A strategic relationship that provides extra value-added services is outsourcing the employment process.

a) Talent management

b) Candidate management

c) Hiring manager engagement

d) Recruitment analytic support

e) Workforce planning

f) Pre-employment screening

g) Strategic sourcing

h) Compliance and risk management

i) Vendor partnering

j) Employer brand consultation

k) Supply chain management

l) Early career/ graduate recruitment

Benefits of enlisting a professional RPO provider

The advantages, both long and short term, can be substantial if a firm chooses an RPO provider that is the right fit for them. The right RPO must be able to comprehends their culture, beliefs, and hiring goals. Some of the main benefits are:

a) Obtaining the appropriate talent at the appropriate time.

b) Lowering agency spending and cost per hire.

c) Shorter time to hire.

d) Increased candidate satisfaction.

e) Conformity with legal and regulatory standards.

f) Access to reports and data in real-time.

g) Technological skepticism consulting.

h) Reporting and analysis.

i) Increased stakeholder involvement.

j) Fantastic compliance regulations.

Types of RPO engagements

There is no one particular model fit for RPO. RPO provides many engagement models. The following three primary RPO engagement types are described by John Younger, an RPO expert:

a) On-Demand RPO:

A contractual arrangement with a qualified provider who is familiar with the business's operations, messaging, and desired outcomes. A set number of responsibilities must be completed within a set amount of time, according to the contract.

b) Function-Based RPO:

The RPO provider completely relieves the business of one aspect of its recruiting requirements.

c) Full RPO:

When an RPO vendor handles all aspects of internal recruiting for a business, including providing access to all of the provider's resources.

Cost of Recruitment process outsourcing

The cost of an RPO will vary depending on the demands and objectives of the organization using it as well as the RPO provider. Here are a few models that can be adopted by RPO management.

a) Management Fee Model (typically monthly)

Using this model, the RPO supplier receives payment for undertaking a specified number of positions. Depending on the agreement, the cost might alter, or it might have escalation elements if the number of hires grows over time. The cost model is connected to enterprise RPO services and some newer RPO services, such as white label RPO.

b) Cost Per Hire Model

Each candidate who completes the program and is hired (or engages in other actions like being offered a position) by the client is subject to a fee. This approach is appropriate for short-term project RPO, where the solution is dependent on achieving specific outcomes or is only required for a few months. This strategy is also well suited for point-of-service RPO when a particular recruitment task (such as filling the candidate pipeline) is delegated to the supplier.

c) Cost Per Slate

In this sourcing model, the RPO provider charges a fee for a predetermined number of candidates who have been found, screened, and qualified for each available position. The internal recruiters receive the candidates from there continue the hiring and recruitment operations. Another pricing structure that is appropriate for point-of-service RPO and short-term project RPO solutions is the cost per slate.

About the Author

Abhishek Kathpal

Abhi is the co-founder at Longlist.io. Funded by US based OnDeck, Longlist is currently enabling 50+ businesses to increase their candidate and client reach outs, automating the workflow across stages.

More like this: