recruitment process outsourcing (RPO)

Recruitment process outsourcing (RPO) involves an employer turning the responsibility of finding potential job candidates over to a third-party service provider. An outgrowth of business process outsourcing (BPO), the recruitment process outsourcing method is designed to bring qualified candidates to a potential employer with minimal involvement from HR staff. An employer looking to fill open positions could sign a contract with a recruitment process outsourcing firm, giving it responsibility to find, screen and assess suitable candidates.

Recruitment process outsourcing is primarily used by medium and large-sized companies and is often a popular choice for employers needing talent acquisition in specialized or technical areas. In a tight labor market where it can be difficult to attract potential new employees, RPO can bring different perspectives, skills and attention to the problem, while, at the same time, freeing HR staff to focus on internal tasks.

How does RPO work?

RPO services typically start with a recruitment process outsourcing agreement, which outlines the scope of the project, timing, cost and more. Often, the HR management (HRM) staff and the RPO service provider meet to create or discuss job descriptions. Then, the RPO team spreads the word about the job opening using its own recruiting methodologies and technology or the client's techniques and systems. Social media recruiting is a large part of RPO.

As resumes arrive, the RPO service provider assesses the candidates and may circle back with the employer if there are disconnects that might mean the job description needs to be tweaked. The RPO team will gather and screen applicants and may shepherd likely candidates through pre-employment assessments if required. If the RPO process is successful, the employer will merely need to interview a small number of highly vetted candidates and make a choice.

RPO vs. typical recruiting

In many ways, an external recruiter working for an RPO firm operates exactly like an internal recruiter, but there are some significant differences.

Few companies have HR departments large enough to support full-time recruitment teams, so busy HR staff members often have many other tasks besides recruitment. Recruitment process outsourcing firms provide professionals who are full-time recruiters with deep industry knowledge, which they use to help reach hard-to-find candidates. An RPO firm is more likely to know which specialized websites or social media can attract talent, and it also has access to the latest tools and trends in recruitment, which in-house HR professionals may not be familiar with.

Benefits of RPO

Organizations that outsource recruitment hope to reduce cost, save time, improve compliance and get better access to more qualified candidates. In a tight labor market or with specialized fields, RPO in recruitment can help an employer stand out.

RPO can also provide companies with people analytics on hiring practices. Another benefit of RPO is the way it supports globalization: As organizations expand into other countries, it's important to standardize sourcing, hiring and onboarding processes. Replacing multiple recruitment outposts with a centralized RPO provider can help companies achieve this aim.

This was last updated in November 2018

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