Since the COVID-19 pandemic abruptly disturbed the lives of millions, businesses are having to change their way of operating in order to adapt to the changing situation. Workers across multiple industries are now working remotely, and many companies are reevaluating their workflows to ensure they stay up-to-date with modern best practices.
On top of that, a genuine labor shortage is developing across many sectors, which means employers are facing increased competition for top talent. To address these challenges and remain competitive in the current environment, companies are outsourcing their recruitment efforts to recruitment process outsourcing firms (RPOs).
This post will explore RPO, how it works, and its benefits. We’ll also look at different RPO models and how to choose an RPO partner that’s right for your business.
What is Recruitment Process Outsourcing (RPO)?
First things first, let’s talk about what RPO actually is.
At its core, RPO is a process in which companies outsource the recruitment function to a third-party provider. It involves having an external partner handle all or part of their recruitment needs, from posting job listings and sourcing candidates to conducting interviews and onboarding new hires. In this way, RPO provides a cost-effective and efficient alternative to hiring in-house recruiters.
Through this model, companies can focus their resources on other areas of their business that require more attention while outsourcing the recruitment process to professionals who are experts at finding top talent.
And because most RPO firms have a national or international reach, companies can access a much larger pool of candidates than they would be able to if they were conducting recruitment in-house.
The Benefits of RPO
That being said, what are some of the benefits of RPO? Outsourcing your hiring efforts to a company like Groom & Associates enables you to:
Remain agile and scale easily
One of the most significant benefits of RPO is that it allows companies to be much more agile when it comes to scaling. They can quickly ramp up or down depending on their needs. This flexibility will enable them to promptly meet increased demand during busy periods and scale back when business slows down.
In times of labor shortage, the ability to quickly scale up your recruitment efforts is especially important. By partnering with an RPO firm like Groom & Associates, companies can quickly and easily access a wealth of top talent that they might not have been able to find otherwise.
Another key benefit of RPO is that it offers significant cost savings compared to having an in-house recruitment team. Because you’re not paying a recruiter’s salary and benefits, outsourcing your recruitment efforts can lead to big savings on labor costs. Plus, you’ll save on overhead expenses because you don’t have to worry about things like office space, equipment, or training new recruits.
As we’ll explore later on, you can also use RPO on a per-project basis, which means that you only pay for the specific services you need. This can be particularly cost-effective if your needs are short-term or seasonal.
Gain access to a higher quality talent
Another critical benefit of RPO is that it gives you access to a much larger pool of candidates than you might find through traditional means. Most companies use the same old methods for finding candidates, like posting job ads on job boards and waiting for resumes to trickle in.
However, these methods usually only produce a small handful of qualified applicants. By partnering with an RPO firm, you get access to a much larger network of candidates nationwide or worldwide. Your chances of finding a truly exceptional hire are much higher.
Leverage top-notch technology
RPO firms also have access to the latest and greatest technology in recruitment. That can include things like applicant tracking systems (ATS,) recruiter dashboards, artificial intelligence (AI,) social media sourcing tools, and more. This technology allows them to run their hiring efforts much more efficiently.
RPO not only gives you a competitive edge when it comes to finding and hiring top talent, but it also saves you huge amounts of time in the process. Without partnering, you would need to purchase, configure, and maintain all of this technology on your own.
Free up HR
If you’re looking to free up more time and resources in your HR team, RPO is the way to go. One of the primary benefits of RPO is that it allows companies to free up their HR teams from many of the burdensome tasks that are a part of recruitment. For instance, a company might want to relieve its HR team from posting job ads, sifting through resumes, performing initial phone screens, interviewing candidates, and more.
All of this takes a lot of time and energy that could be better spent on other aspects of HR, like employee retention or onboarding. By partnering with an RPO firm, you can offload all of these responsibilities to them and focus on the aspects of HR that are most important to you.
Next, RPO allows companies to remain compliant while hiring new talent. This advantage is particularly important when complying with employment laws and maintaining a diverse workforce. Many RPO firms have extensive expertise in this area, which can give you peace of mind that your recruitment process will be 100% compliant at all times.
Regardless of which RPO model you choose, you can rest easy knowing that your recruitment efforts are in the hands of a well-versed team in employment law.
Decrease turnover rate
The unfortunate reality is that high turnover rates can be incredibly expensive for companies, especially in industries like retail or hospitality. In fact, a recent study found that the average cost of employee turnover is roughly33% of the employee’s annual salary, which can add up fast. And in the case of higher-level management, the cost can be even higher.
By partnering with an RPO firm, you can significantly reduce your turnover rate by ensuring that you hire somebody who’s a good fit for the job, company culture, and team. It will take some of the pressure off of your HR team, who might spend a lot of time and energy trying to find new hires only to see them quit after six months.
Gain access to detailed analytics
In today’s data-driven world, having access to detailed analytics can be a huge competitive advantage. When you partner with an RPO firm, they’ll provide you with detailed reports and metrics, from how many candidates applied to how long it took to fill each position.
This allows you to spot trends in your recruitment process and make more strategic decisions regarding hiring.
The Different Models of RPO
When it comes to RPO, there are a few different models that you can choose from. Each has its pros and cons, so it’s essential to understand what they entail before deciding which is right for you.
One of the most popular forms of RPO is known as end-to-end RPO or full RPO. In this model, the RPO firm takes over your entire recruitment process from start to finish. They’ll handle everything from sourcing and screening candidates to providing detailed analytics on the performance of your hiring efforts.
It’s a great option if you’re looking to outsource every aspect of recruitment and free up your HR team for other tasks.
Single-project RPO might be a better fit if you only need help with a specific project, such as a one-time hiring effort or seasonal hiring. In this model, the RPO firm will help with your specific project but won’t take over your entire recruitment process. You’ll save even more money with this model since you won’t be paying for services you don’t need.
Likewise, you may also opt for selective RPO, which is a more tailored version of end-to-end RPO. In this model, the RPO firm will take over parts of your recruitment process that you need help with and leave the rest to your HR team.
For example, you might choose to outsource the sourcing or screening of candidates but handle all interviews and hiring decisions in-house. Or you might simply want help with specific stages of the recruitment process, such as onboarding or managing your candidate pool.
On-demand RPO is for companies who might regularly need extra help on their recruitment team or don’t want to make a long-term commitment to an RPO firm. In this model, you only pay for the services you need when you need them.
You might opt to use an on-demand RPO service if your company is growing rapidly and needs more help with recruiting or if you want to test out an RPO firm before making a more permanent decision.
Why Should You Consider RPO?
Now that you understand the different models of RPO, you might be wondering whether it’s right for your company. You might consider RPO if you are:
Having difficulty finding a good fit
Some specialized jobs, such as engineers, programmers, or data scientists, can be tough to find. If you’ve been having trouble finding suitable candidates for these roles and are looking to expand your team in the near future, RPO could be the perfect solution.
In need of job marketing services
If you want to expand the reach of your job postings and attract more high-quality candidates, RPO can help. An RPO firm will have access to specialized recruitment marketing services that can improve your hiring results. Far more than just posting a job ad on a few websites, these services can help you build an effective candidate funnel and attract the best talent to your company.
Need help with candidate assessments
The right analytics and assessment tools can help you find the best candidates for your job openings, but these can be expensive and time-consuming to implement on your own. An RPO firm will have access to all the latest market research and tools to help you make better hiring decisions.
The rise of AI and automation is also transforming the world of recruitment, and RPO firms can help you make sense of these new technologies and leverage them to improve your hiring results.
Hiring in new regions
For companies with international operations, RPO can be an effective way to find the right talent in new markets. Different regions may have different hiring needs, from legislation and language barriers to the skills in demand. A good RPO firm will be well-versed in all of these.
Wish to diversify your hiring pool
Diversity in the workplace is becoming more and more important for companies, especially in high-tech sectors. If you want to improve the diversity of your workforce, RPO can help you find candidates from underrepresented groups, such as women, POC, or people with disabilities. Without hiring an RPO firm, it can be difficult to effectively attract these candidates and ensure they have a fair chance of being hired.
On a tight deadline
Finally, an RPO firm can make the entire recruitment process faster and more efficient if you’re under a time crunch or need to fill an urgent position. With a pool of ready-to-hire candidates at your disposal, you can fill your open position in no time and put your focus back on the core of your business.
What are the costs associated with RPO?
The cost of using an RPO firm will depend on several factors, including the size and complexity of your company, the role you are hiring for, and the specific services you need. Some firms charge per project, others a monthly fee. You’ll also find placement-based fees, where a portion of the candidate’s salary is paid to the RPO firm as a commission.
What kind of support can I expect from an RPO firm?
Many RPO firms offer their clients full client support, including onboarding and training services for new employees, reporting tools for tracking results and hiring trends, and 24/7 access to their team of recruitment experts.
What is the difference between an RPO firm and a staffing agency?
RPO firms are typically larger than staffing agencies, with deeper resources and a wider range of specialization. While staffing agencies can help you find general candidates for temporary or contract roles, RPO firms can help you with specialized and high-volume recruitment needs.