Recruitment Process Outsourcing (RPO) involves hiring an external organization to handle recruitment processes, which can save costs and improve quality control. RPO providers take ownership of the entire process, but there are risks such as cost and lack of regulation. The practice is considered a type of business process outsourcing (BPO).
Recruitment Process Outsourcing (RPO) is the practice of employing a specialist organization to undertake employment processes and control. By outsourcing this activity, the parent company is able to streamline internal staffing. An added benefit is the warranties and assurances provided by the external outsourcing organization. Many companies are turning to hiring outsourcing as a means of reducing in-house staff by no longer carrying out the hiring process with their own workforce.
As of 2009, the term recruitment process outsourcing was accepted as an approved definition by the Human Resources Outsourcing Association (HROA). Due to the fact that the company using this outsourcing is transferring all or part of their recruiting department to an external organization, the process is considered a kind of business process outsourcing (BPO). An RPO provider may choose to undertake the required work with its own in-house staff or, alternatively, may hire some or all of the client company’s employees. This also applies to methods, processes and technologies that may be required to carry out recruitment activities.
An outsourcing company that provides this service is differentiated from other types of staffing companies based on the ownership of the liability. While staffing companies provide a service, as their name would suggest, an RPO provider is required to take ownership of the entire process involved in hiring staff. Likewise, an outsourcing company won’t just recruit staff like various temp hire consultants will. On the other hand, the RPO provider thoroughly analyzes and identifies the client’s key requirements before providing the recruiting function because the full responsibility for finding the best candidate for the job falls on the outsourcing organization.
There are inherent risks in using an outsourcing organization, but there are also some great potential benefits. These benefits can include overall savings and a higher level of quality control when the entire process is handed over to the outsourcing company. Additionally, performance goals will typically be established as part of the relationship between the RPO vendor and the client company. This encourages you to achieve target standards, which generally don’t exist in an internal structure.
Some of the potential risks associated with RPO include the actual cost of hiring the outsourced organization not in balance with the level of service provided, lack of regulation related to RPO service, and also the potential reduction of competition. Some risks actually arise from the client company’s mismanagement of the outsourcing organization. Outsourcing hiring only works if the client is going through a process of ongoing monitoring and direction setting.
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