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RPO (Recruitment Process Outsourcing)

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A major area of BPO (Business Process Outsourcing) is RPO (Recruitment Process Outsourcing). RPO refers to a situation where an organisation transfers all or part of their recruitment processes to an external provider.

The Recruitment Process Outsourcing Association defines RPO as follows: “when a provider acts as a company’s internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through the onboarding of the new hire, including staff, technology, method and reporting. A properly managed RPO will improve a company’s time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance.”

Overview of RPO

RPO has it’s origins in the 1970’s where technology organisations faced significant challenges in recruiting in the highly competitive high-tech labour market. Specialist recruitment agencies appeared charging substanial fees to find highly sought after technical specialists.

Organisations began to examine how they could reduce the growing expenses of recruitment fees while still hiring hard-to-find technical specialists. They examined the different elements of the recruitment process, outsourcing those areas they had the greatest difficulty with yet created the greatest value.

RPO now covers a broad range of recruitment areas across a range of industry verticals. According to research from Everest Group the global RPO industry is currently worth over $US 1.4 billion and is growing annually at 15%.

The benefits and pitfalls

While RPO offers significant benefits in terms of economies of scale and economies of scope organisations need to be careful when selecting a provider and have a well developed strategic plan for recruitment.

If not managed properly, cost and quality can become problems, Clients need to ensure they have the resources in place to manage the relationship and be thorough in evaluating prospective providers. The cost of engaging an RPO provider may be more than with internal recruiting. Poorly implemented RPO could reduce the effectiveness of recruitment.

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Expanding the scope of RPO

The future of work

Associated whitepapers and articles

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November 12, 2012
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