RPO - What does RPO mean?

25-01-10

Recruitment Process Outsourcing

Recruitment Process Outsourcing (RPO) is a form of Business Process Outsourcing (BPO) where an employer outsources or transfers all or part of its recruitment activities to an external service provider. RPO will deliver integrated end-to-end processes across the complete resourcing and recruitment lifecycle.

As part of the RPO model, an external provider acts as a Company's internal recruitment function for a portion or all of its recruitment needs. RPO providers generally manage the entire recruiting/hiring process from job profiling through to the induction of the new hire. A properly managed RPO will improve a company's time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce hiring costs and improve due diligence and compliance.

On the other hand, occasional recruitment support, for example temporary, contingency and executive search services is more analogous to out-tasking, co-sourcing or just sourcing. The biggest distinction between RPO and other types of staffing is in the process. In RPO the service provider assumes complete ownership of the process, while in other types of staffing the service provider is part of a process controlled by the organisation buying their services.

Origins of RPO

While temporary, contingency and executive search firms have provided staffing services for many decades, the concept of an employer outsourcing the management and ownership of part or all of their recruiting process started at some time in the mid 70s in US, mainly focused on Silicon Valley's highly competitive high tech labour market.

Fast-growing high tech companies were hard-pressed to locate and hire the technical specialists they required. Over time, companies began to examine how they deal more effectively with this process while still hiring difficult to source technical specialists. Toward this end, companies began to examine the various steps in the recruiting process with an eye toward outsourcing only those portions that they had the greatest difficulty in sourcing and that added the greatest value to the bottom line. Initial RPO programs typically consisted of companies purchasing lists of potential candidates from RPO vendors. This "search/research" function, as it was called, generated names of competitors' employees for a company and served to augment the pool of potential candidates from which that company could hire.

Over the last 30 years there have been fundamental changes in the global labour market that serves to reinforce the RPO model. The labour market has become increasingly dynamic. Staff today change employers much more frequently than in previous generations. Deregulated labour markets have also created a shift towards contract and part-time staff combined with shorter work tenures. These trends increase recruitment activity and may encourage the use of RPO. It should also be noted that even in slower economic times or higher unemployment, RPO is still considered by companies to assist in an increasing need to screen through a larger candidate pool and to reduce recruitment costs.

RPO has also evolved from a straightforward resourcing model to a genuine partnership between provider and client. This partnership model not only focuses on the acquisition of talent but is also concerned about the engagement, development and retention of new staff members.

Benefits of RPO

A good RPO arrangement can offer an improvement in the quality, cost, service and speed. In addition, economies of scale can ensure a recruitment processes at a lower cost, while economies of scope allow them to operate as high-quality, specialists. Economies of scale and scope are said to arise from a larger staff of recruiters, databases of candidate resumes, and investment in recruitment tools and networks.

When should a Company consider RPO as an option?

• If the recruitment of staff is taking up a lot of time and resources and is becoming a long drawn out process
• If a company is seeking a steady flow of candidates that are in line with specific company requirements
• If a company does not have in house HR recruitment expertise
• If a company does not have (and does not want the expense of investing in) in house IT solutions to manage the recruitment process effectively
• If there are not enough resources within the HR team or if the department is very busy and the company does not want to retain long term personnel in this area
• If there is a requirement to hire specialised personnel
• If a company wants to secure higher savings while retaining complete control over the hiring process
• If a company is undertaking a significant hiring process and wants to have to processed managed effectively without having to take on permanent staff to match this temporary need
  

Please contact HR Plus if you would like more information or costings in relation to the RPO model on 01-676 0006 or email info@hrplus.ie

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