What is RPO?
Recruitment process outsourcing or RPO is a kind of outsourcing where a company transfers its recruitment process to an external firm. Recruitment process outsourcing has gained popularity in the recent past as corporations have realized that maintaining a recruitment staff has serious cost implications. Many organizations decide to outsource their recruiting for two main reasons:
- They lack sufficient personnel on hand to give proper support during expansions
- They intend to downsize internal recruitment efforts to reduce costs
RPO providers take on the entire recruitment process of the client, specializing in not only identifying and attracting candidates but finding high-quality, full-time employees who will hopefully enjoy a long tenure with the company.
We can think of RPO providers as an “extension” of the company looking to hire, like an offsite human resource department. This means that an RPO provider will not only work to recruit new candidates, but also be involved in the onboarding and exiting of employees as well.
On the other hand, staffing companies typically specialize in providing temporary or temp-to-hire employees and operate mostly autonomously. While useful in situations where there is a specific staffing need (e.g., a warehouse in need of forklift drivers), staffing companies do not offer the same kind of long-term relationships that an RPO firm can offer.
There’s a lot to discover about outsourcing recruiting, below are the pros and cons of using an RPO strategy so you can decide if it is the right decision for your business.
Who Should You Use an RPO?
Any corporate organization, irrespective of its industry can use RPO to:
- Reduce time to hire
- Lower the cost per hire
- Increase the quality of its service
- Unburden its HR department
Pros of RPO
There are many important benefits associated with recruitment process outsourcing. The idea being to put your recruiting efforts in the hands of experts who have years of industry experience in finding the right candidates so that you don’t have to.
Below are some of the great benefits that are associated with RPO:
Find Great Candidates
Outsourcing your recruiting will greatly increase your company’s chance of finding highly-skilled talent, which in today’s job market, is becoming increasingly difficult for businesses in all industries to find.
Rather than burdening current employees with the task of finding new recruits or spending company resources on HR, many organizations are choosing to reach out to an RPO provider that can cast a wider net. This will increase the odds of your business finding qualified candidates for your open positions.
Gain a Competitive Advantage
Small companies usually don’t have the in-house resources to launch a large recruitment campaign, whereas huge companies like Google are likely to have in-house recruitment teams working to find the best talent 24/7.
With recruitment process outsourcing, smaller companies can rely on expert recruiters with industry experience to bring the best talent straight to their doorstep so that they can be onboarded quickly and efficiently. This will allow the company to keep pace with larger firms.
For medium to large companies, staffing a full human resources department can be quite costly, especially if the department isn’t needed year-round.
In many cases, it makes more financial sense for a company to simply outsource human resource responsibilities, like recruitment, to an outside firm when there’s a need to fill open positions.
RPO firms will charge for their services, but this amount will likely be far less than the cost of staffing an entire HR department.
Negatives of RPO
As you can see, there are a lot of pros associated with outsourcing recruiting; however, this doesn’t mean that RPO doesn’t have any downsides.
In fact, there are many instances in which companies shouldn’t consider RPO, or at the very least, not depend on it for an extended amount of time.
Loss of Learning Opportunities
Finding, hiring, and onboarding new employees is a skill; there’s no way around it. This is why so many companies are willing to outsource their recruiting to industry experts who have years of experience matching the right employee with the right job.
However, by consistently outsourcing these tasks to an outside entity, your company is losing out on many important learning and data gathering opportunities.
For example, by keeping your recruitment and hiring process in-house, you can gather data on how candidates with specific skills perform on different kinds of assessments, which will ultimately help you refine and create better assessments in the future.
Additionally, when your company is in complete control of the recruitment and hiring process, you can experiment with different types of recruitment messaging. This messaging can then be rated for effectiveness by measuring the quality of candidates who were attracted by this type of messaging.
By outsourcing your recruiting to an outside firm, you sacrifice this data gathering, which could ultimately hurt your company in the long-run.
Core Company Values Suffer
While making money is always the end goal of any business, company values and culture still matter to most, if not all CEOs.
Company values are what keeps employees engaged and pushes them to perform at the top of their game. Good CEOs know this, which is why we’re starting to see more and more companies take a great interest in making “quality of life” improvements in their workplace, such as paying for their employee’s education, planning company retreats, and scheduling company events where everyone can voice their opinion on company dealings.
However, core company values can start to become muddied when the recruitment process is outsourced.
The candidates found by the recruitment firm may be qualified for the role but may not be a “cultural fit” for the company.
As more new candidates are brought on board, the company’s culture may start to deteriorate and evolve into something else entirely. This isn’t to say that change is bad, but when a company loses its identity, it can make future projects more difficult as the individuals working on that project may no longer be on the same page.
Although there are benefits of using RPO to manage your recruitment efforts, there are downsides as well. Although you save time, which leads to cost savings, the sticker shock of placed candidates can be quite alarming. Additionally, having your recruitment managed by an outside resource can sometimes make alignment difficult.
Is There a Better, Cheaper Way to Manage Recruiting?
If you would like to experience similar time-savings to partnering with an RPO but want to keep your recruiting processes internal and have control over everything, we strongly suggest you consider investing in an applicant tracking system (ATS). With tools like one-click free job postings, interview scheduling, and workflows that alert your entire hiring team, an ATS brings many of the same benefits as an RPO at a fraction of the cost. Newton is an applicant tracking system built by recruiters who grew tired of manually managing their hiring tasks via email and spreadsheets. If you’d like to learn more about how Newton can help make recruiting easier, schedule a quick conversation with one of our product experts today.
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