Recruitment process outsourcing (RPO) involves hiring an external organization to handle employment processes, allowing the parent company to optimize internal staff. RPO providers take full responsibility for finding the best candidates and may use their own staff or hire the client’s staff. Benefits include cost savings and increased quality control, but risks include high costs and lack of regulation.
Recruitment process outsourcing (RPO) is the practice of employing a specialized organization to carry out employment processes and control. By outsourcing this activity, the parent company can optimize internal staff. An added advantage is the guarantees and insurance provided by the external sourcing organization. Many companies turn to recruitment outsourcing as a means of reducing in-house staff, moving away from carrying out the recruitment process using their own workforce.
As of 2009, the term recruitment process outsourcing has been accepted as an approved definition by the HROA (Human Resources Outsourcing Association). Since the company using this outsourcing is transferring all or part of its recruitment department to an external organization, the process is considered a type of business process outsourcing (BPO). An RPO provider may choose to carry out the necessary work with its own in-house staff or, alternatively, hire some or all of the client company’s staff. This also applies to methods, processes and technologies that may be required to carry out recruitment activities.
An outsourcing company providing this service is distinguished from other types of staffing companies by the ownership of liability. While staffing companies provide a service, as the name suggests, it is necessary for an RPO provider to take responsibility for the entire process involved in recruiting staff. Likewise, an outsourcing company will not only hire employees but several temporary recruiting consultants. Instead, the RPO provider fully 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 rests with 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 cost savings as well as an increased level of quality control when the entire process is handed over to the outsourcing company. Furthermore, performance targets are often defined as part of the relationship between the RPO provider and the client company. This provides an incentive to achieve desired standards, which often do not exist in an internal structure.
Some of the potential risks involved in RPO include the actual cost of employing the outsourcing organization that does not balance with the level of service provided, the lack of regulation regarding the RPO service, and also the possible reduction of competition. Indeed, some risks stem from poor management of the outsourcing organization by the client company. Recruitment outsourcing only works if the client is operating a continuous monitoring and direction setting process.
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