The definitive guide to Recruitment Process Outsourcing (RPO)

Whether you’re in a small or large organisation, in today’s candidate market, the price to acquire real talent can be costly and time-consuming.

If the structure and resourcing isn’t in place to effectively screen and source candidates for key requirements (as well as the company culture), it can quickly have a negative impact across the business.

There can be a real knowledge gap between internal recruiters from department to department and the fixed costs that come with maintaining the internal team can weigh heavily. As a result, the pressure to ensure that your talent supply chain runs smoothly every time is immense.

That’s why a lot of companies consider transferring part or all of its recruitment process to an external provider. This is known as Recruitment Process Outsourcing (RPO).

Recruitment Process Outsourcing: how does it work?

According to the RHOA (Human Resources Outsourcing Association), the definition of Recruitment Process Outsourcing is “a form of business process outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external service provider.

“An RPO provider can provide its own or may assume the company’s staff, technology, methodologies and reporting. In all cases, RPO differs greatly from providers such as staffing companies and contingent/retained search providers in that it assumes ownership of the design and management of the recruitment process and the responsibility of results.”

In an Recruitment Process Outsourcing model, recruitment is provided by third party recruitment agency, which is an extension of the HR department, off-site or on-site. It’s often used for high-volume recruitment (for example, call centre staff), short and medium roles on a project-to-project basis, as well as fully replacing all internal recruitment in an organisation.

recruitment process outsourcing how does it work and benefits

Recruitment Process Outsourcing is more than just filling positions when the demand is high; it’s also about enhancing the overall recruitment process in your organisation. Because the whole recruitment process is taken care of, this significantly reduces internal HR time and allowing teams to focus on other important duties.

An RPO provider also takes the time to understand the structure and culture of your business in order to outline the key characteristics of the perfect employee for the job.

From the advertising and sourcing for the role available, to each stage of the interview process to ensure that all of the skill and culture requirements are met to the highest standard, to the required background checks and reference checking, all the way to the formal offer, contract duties, placement and onboarding. The RPO provider will manage every single step of the recruitment cycle for you.

Recruitment agency vs RPO – What’s the difference?

Globally, there’s an obvious shift in companies recognising the benefits that come with RPO, but what really separates it from the traditional recruitment agency offerings?

The traditional recruitment agency model

In the traditional recruitment agency model, a recruiter is as involved with the recruitment process and the candidate as much as the client wants.

Sometimes a client will request the recruiter to be involved in every stage of the process, but typically, the recruiter would:

  • Source appropriate candidates for vacant roles
  • Liaise between the candidates and client throughout the recruitment process
  • Screen candidates to ensure they have the necessary skills
  • Assist candidates with every stage of the application and interview process (CV preparation, interview advice, salary negotiations etc.)

The RPO model

In Recruitment Process Outsourcing, the client transfers all or part of its recruitment processes to the RPO provider.

The RPO provider then acts as an extension of that client’s HR department. This can be done either off-site or on-site. The RPO provider takes full ownership of all hiring duties and are fully accountable for the results they deliver.

RPO providers are often sought out for high-volume recruitment (for example, call centre staff), short and medium roles on a project-to-project basis, as well as fully replacing all internal recruitment in an organisation.

The RPO provider can take responsibility of part or all of:

  • Candidate name generation and sourcing
  • Recruitment marketing and/or advertising strategy
  • Candidate screening
  • The entire interview process
  • Testing and selection
  • Salary negotiation
  • Drug screening and background check
  • Placement and onboarding
  • Reporting

An RPO provider would also be responsible for introducing their own technology and reporting. This can be a big budget saver for clients, particularly for smaller companies who may not have access to similar technologies.

All the above services can be amped up or reduced throughout the year depending on a client’s needs. These means costs can go down when your hiring needs go down and the RPO provider can adapt to your specific business needs.

While the traditional agency model offers as much support as the client needs, RPO acts as an extension of the internal recruitment operations of the business by taking full ownership of the duties. Each solution has its merits to suit the needs of the client and enhance the core functions of the business.

What kind of recruitment processes can be outsourced?

Name generation and sourcing

An experienced RPO provider will have access to a large pool of candidates across all industries and verticals, as well as the expertise to market and advertise the roles effectively.

Recruitment marketing/Advertising strategy

There are literally hundreds of places where you can advertise a job, but crossing them all off will quickly eat into your recruitment budget.

An experienced RPO provider will ensure that your roles are advertised in the right places for the role and industry. Whether it’s specific social media platforms, industry-specific forums, job boards or native platforms, every campaign will be handled strategically and effectively.

Candidate screening

Candidate screening is absolutely essential to ensure the candidate has the skills and potential social intelligence required to move forward in the interview process.

This ensures that the interview-to-hire ratio isn’t skewed and the process is as quick and efficient as possible.

Every step of the interview process

The RPO provider will take care of every step of the interview process and scheduling according to the timelines provided by the client.

Testing and Selection

Selecting the right candidate is crucial, and your RPO provider should take careful and calculated steps in making an informed decision. An experienced RPO provider will have state-of-the-art reporting technologies so each and every requirement is fulfilled by the candidate.

Testing methods such as personality and psychometric tests may also be provided to outline the most efficient way to work with the candidate and onboard them at ease.

Drug screening background checking

Background checking ensures the employer that the candidate has the background, education, and experience claimed and required for the role.

An RPO provider can perform thorough background checks on behalf of your business so you can peace of mind before you make a formal job offer.

In some instances, as drug screening could also be required in the process.

Placement and onboarding

Ensuring that a new starter gets the best onboarding experience is crucial for staff retention. An RPO provider will create an onboarding process that reflects positively to your business and strengthens the company culture.

What are the benefits of Recruitment Process Outsourcing?

Cost-efficient

One of the biggest advantages of RPO is it can reduce your total recruitment spend considerably, due to the flexibility of the service.

The provider can also be as much or as little involved as you want, so costs can go down when your hiring needs go down and the RPO provider can adapt to your business needs.

Accountability

Since the provider will take ownership of these duties, they are fully accountable for the results they deliver.

Choosing the right RPO provider can significantly reduce risk to your organisation and ensure you have the right expertise for the roles you need to fill.

An experienced RPO provider will track and report on every step of the recruitment process, which will make future planning easier and optimise the process as time goes on.

Higher quality hires and longer staff retention

If your pick the right RPO provider with the right expertise for the relevant processes you want to outsource, it can significantly improve the quality of hires, which will subsequently improve overall staff retention.

RPO providers typically have a larger pool of potential candidates to choose from, which can reduce hire time when you need it the most.

Time-efficient

Simply put, outsourcing your recruitment process to an external provider will allow your business to fully focus on its core objectives. You’ll have peace of mind that it’s in good hands.

How do you know when your business is ready for Recruitment Process Outsourcing?

The many benefits of RPO such as the potential savings on your recruitment budget and time can help immensely, but how do you know when your business is ready to work with an RPO provider? Here are 5 possible reasons.

1. You have high-volume project-based roles

RPO is useful for high-volume recruitment (for example, call centre staff), short and medium roles on a project-to-project basis, as well as fully replacing all internal recruitment in an organisation.

If you’re looking to hire a lot of people in a short timeline but feel like your recruitment team cant manage the task, an RPO provider can work alongside your team to assist at any or every stage of the process.

2. It’s taking too long to fill roles

Interview processes are getting shorter and shorter. According to the Cpl 2019 Salary Guide, clients have sped up the interview processes to ensure they don’t miss out on the best candidates. Those failing to do so will lose out on top talent.

If your hiring process is too long, that can also set back your overall business goals. It will also reduce your productivity and drive your recruitment costs up. Another reason why it could be taking too long to fill roles is you might not have access to enough candidates.

An RPO provider can provide the expertise you need to fill those roles, review your existing process and identify areas that can be improved. Working with an RPO provider also means you have a much bigger pool of potential candidate to choose from.

3. Your churn rate is high (and you’re always hiring)

If your employees keep leaving, it could be due to any of these reasons:

  • Your recruitment process isn’t effectively screening candidates and they’re ultimately not a suitable fit for the role
  • The workplace culture isn’t meeting the employee’s expectations
  • Your onboarding process needs improving

With an RPO model, since the provider will take ownership of these duties, they are fully accountable for the results they deliver. The provider will look at every step of your recruitment process to make sure your business hires the talent it needs and keeps them.

4. Your team lacks the experience to fill specific roles

If your business offers a wide range of services with lots of different skills needed, it’s unrealistic to rely solely on an in-house recruitment team to fill all those roles.

For example, a recruiter that specialises in finance is unlikely to effectively hire software development or customer success employees.

An RPO provider will provide you with the expertise you need to fill a variety of roles and evaluate the candidate so they meet your requirements.

5. Your team can’t cope with the demand

If you need to recruit a large number of employees for a project but your recruitment team can’t meet the timelines set, an RPO solution is particularly useful.

RPO services can be scaled up or down, this flexibility means their involvement can be altered to demand and your budget.

It’s important to recognise the signs if you need help with your recruitment process, and RPO could you give an accelerated solution without sacrificing any elements along the way.

If you have a lot of roles to fill but lack the manpower to fulfil them, your team lacks the experience to effectively fill the more specialised roles or you feel that your current recruitment process is having a negative effect on your current talent chain an experienced RPO provider can have a positive impact across your business.

Looking for an Recruitment Process Outsourcing provider?

Cpl has been a leading Recruitment Process Outsourcing provider over the last 15 years. See how we helped one of the world’s largest pharmaceutical manufacturers Pfizer grow their workforce in Ireland.

Click here to get in touch to discuss how we can grow your business.