What is RPO and How to Choose the Best Recruitment Process Outsourcing Model

What is RPO and How to Choose the Best Recruitment Process Outsourcing Model
Article by Zarah AriolaZarah Ariola
Last Updated: May 02, 2022

The global RPO market size was estimated at $6.32 billion in 2020 and is expected to reach a whopping $20.8 billion by 2027. There’s a reason for these skyrocketing numbers.

Sometimes finding the right candidate can be extremely challenging. In fact, a large majority of them (70%) are passive job seekers, so it pays to have somebody outside focused on the “hunt”.

Opting for RPO recruiting can support part (or all) of your company’s permanent workforce hiring through a comprehensive set of external recruitment resources.

In this article, beside discussing what is RPO, we will also touch upon the benefits of opting for recruitment process outsourcing model and how to best go about it.

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What is RPO?

As an integral part of business process outsourcing (BPO), RPO or Recruitment Process Outsourcing is the outsourcing of all or some of your talent acquisition (hiring) activities. It usually belongs under the PEO companies umbrella.

RPO helps companies - that fall under the umbrella of PTO companies - find the right people for the right position to realize and release your organization’s full potential.

This process involves a contractual relationship with an external service provider who handles the management of your recruitment needs for you.

There is a slew of RPO models that can be customized with a specific set of services to address your business’s specific goals and hiring requirements. The process can be scaled up or down based on the company’s growth and hiring needs, which offers significant space for maneuverability and agility.

Whether you have specific roles to fill or simply want to boost your workforce with a specialized team, RPO offers greater flexibility in the search for the best talent out there.

How Does Recruitment Process Outsourcing Work?

Once you determine your specific requirements, it’s time to transfer some of your HR team’s tasks to the chosen RPO provider. These tasks may include:

  • Creating a recruitment strategy
  • Providing consultation services
  • Selecting and managing all recruitment technology, resources and processes
  • Sourcing, screening and shortlisting candidates
  • Conducting interviews, tests and assessments
  • Onboarding

An RPO provider can have a dedicated team screening applicants based on their resumes, professional networking sites and job platforms.

They might also hunt for potential hires that did not apply, using the same online sources. The team will then build up a database filled with all the pre-screened prospects, ready to be “cherry-picked" for the last stage - job interview and hopefully, onboarding.

With the help of tools like scheduling bots, automated recruitment marketing, CRM platforms, smart analytics and AI integration, the recruitment process can be a smooth ride.

Beyond the experience of using these platforms, many RPO recruitment providers regularly conduct surveys and other research to keep informed about the concurrent demands and expectations in different industries and/or markets.

Since some organizations might require a highly specialized hiring approach, there are RPO providers whose expertise is focused only on niche industries.

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What Does RPO Recruiting Include?

Answering this question is a little bit more complicated as it largely depends on your business’s specific needs.

There are several factors you should take into consideration when determining what type of recruitment process outsourcing solution is best for your organization. Here are the four main RPO models commonly offered in the market today:

1. End-to-End RPO

An ongoing RPO solution that encompasses all services involved with permanent (not necessarily full-time) recruitment including recruitment technology investments.

Your chosen RPO provider may deliver both on and off-site resources to consult with your hiring managers, process requisitions, source and screen candidates, schedule interviews, prepare/present final offers and ultimately, conduct onboarding.

End-to-end RPO may often involve additional services including talent marketing and employer branding (a reputable brand receives 50% more qualified applicants), internal mobility programs, implementation of recruitment technologies and more.

2. Selective RPO

This type of RPO addresses specific elements of your company’s internal recruitment processes. Many employers exclusively outsource sourcing and screening processes or candidate management. With selective RPO, you get best practices for those specific services.

3. Project RPO

Similar to the end-to-end RPO model, but applied to a specific project. That may be a new product/service launch and/or opening a new branch. Project RPO is the most effective solution if you need the benefits end-to-end provides for a specific hiring project but still want to have total control of your internal recruitment for day-to-day hiring.

4. Recruiter on Demand (ROD)

ROD provides recruiters that can help your organization address various spikes in hiring, new business initiatives, product/service launches and/or handle parts of the hiring process. This way, you can add recruitment capabilities right from the get-go, without any process changes or technology implementation as ROD does not usually result in permanent process transformation.

4a. Contingent Recruiter on Demand

Not a different model per se, a contingent recruiter on demand immediately addresses the most critical staffing requirements. These highly trained professionals can quickly source, screen and engage contingent talent for both day-to-day hiring and specific hard-to-fill positions.

How To Choose the Right RPO Model for Your Business?

Selecting the right RPO model depends on your company’s concurrent challenges as well as future goals. Answering these questions can set you on the right path:

  • Do we need resources/hires on a temporary or permanent basis?
  • Do we need to transform our company’s current recruitment processes?
  • Are our current hiring process costs consistently high due to ineffective internal recruitment strategies?
  • Do we want our recruitment capabilities to reflect the most up-to-date methods and practices?
  • Are our talent needs urgent due to a new initiative or problems with the internal team?

There is no one-size-fits-all solution. Each one offers great flexibility and agility. The RPO solution that is right for you today can evolve with your business to adapt as markets change.

Primary Benefits of Recruitment Process Outsourcing

RPO evolved greatly from traditional methods of hiring and a need to ensure access to top-rated talent. This type of recruitment process has a number of advantages over conventional hiring techniques as it includes the use of all available talent databases and technical innovations to select the most suitable candidates.

Besides providing a robust recruiting service, some of the more prominent advantages are:

Recruitment Scalability and Flexibility

The companies’ recruitment needs vary not only throughout the year but even on a monthly basis, depending on set KPIs. In such cases, it can be extremely challenging to determine with 100% certainty the level of staff required for optimal workplace productivity. Sounds vexing, right?

Well, this is exactly what a good RPO firm can and will anticipate and handle with ease.

By evaluating the employer’s unique requirement, it approaches recruitment on a project or on-demand basis which ensures that at any/every point in time, the right number of the most skilled personnel are “acquired” to fill positions.

Faster and More Efficient Hiring Processes

For long-term success, each company must quickly adapt to the ever-changing business environment. Potential delays in hiring skilled talent can be major obstacles on the road to driving objectives or even keeping up with competitors.

Outsourcing this process to a skilled RPO provider will solve this issue by offering you the best hiring options within the shortest time frame.

Exclusive Talent Pool

The major issue in the global job market nowadays is not the lack of talent, but a scarcity of top-qualified candidates required to fill vital company positions.

Attempting to source the much-needed employees to fulfill the company goals can quickly turn into a nightmare scenario without the help of a suitable RPO provider.

Most well-established RPO service providers have a detailed, extensive database of those hard-to-find candidates needed to fill crucial job positions. That, coupled with their exclusive access to workers with proven expertise will enable client companies to secure the services of in-demand candidates easier.

Boost Employer Branding

High-value employees are continually being sought after by firms from around the globe. For this reason, the public company image is not something to be ignored.

If the organization’s in-house human resources team doesn’t display and reflect the company’s stance on the value of employees, securing said top-quality talent may be extremely difficult, if not impossible.

Before they start their talent hunt, RPO providers will first thoroughly research your company’s brand, compare it to your contenders and create a custom recruitment dialogue that highlights why potential hires should choose to work with you.

The best RPO providers on the market will act as a genuine extension of your existing HR team, becoming somewhat brand ambassadors and communicating the right message to the market.

Taking the Burden off Your Internal HR Department

It almost goes without saying, but employing a professional RPO service provider will drastically ease the strain on the HR department and significantly improve its efficiency.

When recruiting is channeled through an RPO firm, your HR will be free to entirely focus on tackling internal issues and more pressing tasks within the organization like payroll processing.

Aside from these major benefits, RPO companies will help you:

  • Enhance workforce planning and gain agility using market insights and talent analytics
  • Minimize hiring costs by reducing reliance on third-party agencies
  • Build a more diverse workforce, a more equitable hiring strategy and an inclusive culture
  • Mitigate risks with compliant hiring practices and regulations

How Much Does Recruitment Process Outsourcing Costs?

RPO rates are typically based on monthly retainer management, placement and/or project fee. In an end-to-end solution, you are guaranteed a minimum volume of hires to provide a baseline cost. For each placement, an additional charge is added.

A project RPO engagement may be similarly priced, but because the scope and volume are usually well defined and specific, your provider may be able to provide a more precise estimate.

In selective RPO, fees can be determined by volume (per candidate scheduled for interviews, for instance) or a specific project (an employer brand audit, for example). In all cases, costs tend to be lower than those of a recruitment agency.

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