What is Recruitment Process Outsourcing and Why Do Businesses Use Them?

Ruffy Galang | April 30, 2024

Table of Contents What is RPO? Why Businesses Use RPO Providers How RPO in Recruitment Works How is RPO Different From Other Hiring Services? RPO vs. Staffing Agencies RPO vs BPO RPO vs. HRO RPO vs. Recruitment Agencies Is RPO Right for Your Business?

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It’s no secret that sourcing qualified, experienced talent isn’t easy. Despite a growing number of recruitment platforms and technologies, 75% of employers still struggle to fill vacancies. One way today’s leaders are overcoming hiring challenges is through Recruitment Process Outsourcing (RPO). But, what is recruitment process outsourcing and is it right for you?

Recruitment process outsourcing, or RPO, is an effective way to get the right people into the right positions without draining a company’s internal resources. It goes beyond basic staffing services and enables businesses to connect with qualified candidates, not just job applicants.

As Ruffy Galang, CEO and co-founder of Remote Employee says, “RPO gives employers a smart and workable way to simplify and streamline their hiring processes while still connecting with the right talent.”

In this article, we’ll explain what RPO is, how it works, and share helpful insight so you can determine if RPO is right for you.

What is RPO?

Recruitment Process Outsourcing (RPO) is a partnership where a business outsources its entire hiring process to an external provider. It’s a strategic move that allows companies to tap into a broader talent pool, leverage the RPO providers expertise and resources for talent acquisition, while not overburdening a company’s internal resources.

While RPO is a way to connect with valuable, targeted talent, it’s not just about filling open positions: it’s also about ensuring candidates are the right fit for a company’s culture and are qualified for their role. Additionally, it also allows companies to access high-value human resource solutions and expertise without heavy investment in their own HR department.

For instance, a mid-sized tech company might use RPO to streamline its recruitment process, ensuring they attract and retain top developers and engineers by leveraging the RPO provider’s extensive networks and recruitment technologies.

What can an RPO do for you? Let’s break it down.

• Recruitment services including talent sourcing, recruitment forecasting, and establishing effective recruitment processes.
• Recruitment consulting services to help develop internal recruitment processes, improve efficiencies, and determine ways to better manage recruitment costs.
• Application screening, interview scheduling, and conducting of interviews.
• Selection and implementation of relevant recruitment technologies and software, such as applicant tracking systems, and more.

Why Do Businesses Use RPO Providers?

As talent is increasingly harder and more costly to source, many companies find that turning to RPO providers gives them a strategic edge in recruitment. Let’s explore the reasons why.

Access to expertise and advanced resources

RPO providers bring specialized recruitment expertise and access to advanced technologies. This allows businesses to tap into a wealth of knowledge and tools that streamline the hiring process without hefty internal investments.

Enhanced quality of hires

With RPO, companies benefit from a rigorous candidate selection process targeted to the role’s requirements. This ensures not just a fit for the job, but also alignment with the company culture, leading to better retention rates.

Scalability and flexibility in recruitment

Whether it’s ramping up for seasonal demands or scaling down, RPO offers unparalleled flexibility. Businesses can adjust their recruitment efforts seamlessly, without compromising on talent quality.

Efficiency in hiring and reduced time-to-fill

Speed is crucial in today’s market. The average time to fill a vacant role is 42 days. However, for roles with more measured requirements the time can be longer. For instance, when hiring an engineer, the time to fill is more than 60 days.

RPO providers optimize recruitment strategies, significantly reducing the time it takes to fill vacancies. This efficiency keeps businesses agile and competitive and reduces business interruptions caused by staffing issues.

Focus on core business functions

By outsourcing recruitment processes, companies can redirect their internal resources towards core activities. This strategic allocation of resources fosters growth and innovation within the business.

Ensure compliance with labor laws

Meeting compliance with labor laws can be challenging when working with talent in distant regions and jurisdictions. If not managed properly, a company can expose themselves to legal risks. An RPO can handle this important aspect on a company’s behalf, ensuring they are up to date and compliant with labor laws.

How RPO in Recruitment Works

RPO begins when a company partners with a provider, embedding them into the company’s recruitment strategy. This deep integration allows the RPO to fully grasp the company’s culture and needs, ensuring a tailor-made approach.

The company and provider determine how much of the recruitment process the provider is going to take over. This could include anything from identifying vacancies to posting jobs, sourcing candidates, conducting interviews, and managing offers. The RPO service is tailored to the client’s needs.

Generally speaking, there are three types of RPO solutions that commonly occur between a company and their recruitment process outsourcing provider. These include:

• Comprehensive RPO services. This is when a company outsources every aspect of their recruitment processes to a trusted provider. This includes everything from talent sourcing, compensation package development, onboarding, and even offboarding if required.

• Project RPO. This solution is beneficial when a company needs support for just a single role or intermittent support, such as during its hiring peak-season or when a key role has been vacant for too long. Project-based RPO is usually based on short-term contracts.

• Hybrid RPO. A hybrid RPO engagement is one where the company and provider are in a long-term engagement but the RPO provider only handles some of the company’s recruiting processes.

Wait, How Is RPO Different Than Other Hiring Services?

While RPO and other hiring solutions may appear similar, there are notable differences to be aware of. Let’s dig in.

RPO vs. Staffing Agencies

RPO provides a comprehensive and strategic approach to recruitment, focusing on long-term outcomes and integration with a company’s HR strategies.

Staffing agencies, on the other hand, typically offer quicker, short-term solutions for filling vacancies without further involvement beyond hiring new candidates.

RPO vs. Business Process Outsourcing (BPO)

Business Process Outsourcing, or BPO, entails outsourcing a broad range of business processes, such as customer service or accounting, to improve overall operational efficiencies.

RPO, in contrast, specializes solely in the recruitment process, aiming to enhance a company’s talent acquisition and management.

Some BPOs, such as Remote Employee, serve as both a BPO and an RPO. This comprehensive approach gives companies a true advantage when aiming to fulfill both business and hiring needs.

RPO vs. Human Resource Outsourcing (HRO)

While RPO focuses exclusively on the recruitment aspect of HR, HRO covers a wider range of HR services, including payroll, benefits administration, and employee relations, offering a more holistic outsourcing solution.

Explore more innovative hiring solutions: How to Overcome Time Zone Challenges with Remote Workers Tips to Navigate Employee Retention Challenges What is Business Process Outsourcing?

RPO vs. Recruitment Agencies

Similar to staffing agencies, recruitment agencies help companies fill positions but may offer a slightly more tailored approach.

However, they don’t typically provide the same level of strategic partnership, technology integration, and comprehensive management of the recruitment process as RPO.

For instance, a finance firm might use a recruitment agency for finding a CFO, whereas they would engage an RPO for building an entire finance team aligned with company growth goals.

Is an RPO Right For Your Business?

Ask yourself…	RPO might be right if…	Consider another option if…
Do you have ongoing, large-scale hiring needs?	Your business requires continuous talent sourcing and recruitment.	You have only sporadic or one-off hiring needs.
Is strategic alignment in recruitment important for your growth?	You’re seeking a partner to align closely with your company culture and long-term goals.	You need to fill positions quickly without a strategic focus.
Are you looking to enhance your employer brand?	You want to build a strong employer brand to attract top talent.	Employer branding is not a priority or already well-established.
Do you need help with recruitment technology and processes?	Your current recruitment processes and technologies are inadequate.	You are satisfied with your current recruitment tech and processes.
Is scalability in recruitment a necessity for your business?	You need the flexibility to scale recruitment efforts up or down easily.	Your recruitment needs are static and predictable.
Do you need scalable recruitment capabilities without significant internal resource investment?	Ideal for businesses seeking to expand their recruitment efforts efficiently without the cost of building internal structures.	Less relevant if your business can afford to or prefers to invest in developing internal recruitment capabilities

Explore New Outsourcing Recruitment Processes with Remote Employee

Having the right people by your side makes all the difference between a company that grows and one that thrives.

At Remote Employee, we help North American companies connect with motivated, dedicated, and qualified team members for a fraction of the cost of traditional hiring practices; most of our clients enjoy a 70% reduction in labor costs simply by working with us.

Discover how we can help your team streamline, simplify, and enhance your approach to recruitment. Contact us today.