What is recruitment process outsourcing? A complete guide

By Indeed Editorial Team

Published 25 August 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Organisations compete with new technologies, competitor offerings and advanced data analytics when acquiring new talent. Recruitment solutions help organisations improve their hiring processes by reducing total costs, streamlining hiring procedures, reducing time-to-fill and improving the candidate experience. Learning more about the outsourcing of the recruitment process helps you determine whether it's right for your organisation. In this article, we discuss what recruitment process outsourcing is and its different types, outline how it differs from other recruitment processes and provide a guide on how to determine whether this option is right for your organisation.

What is recruitment process outsourcing?

Recruitment process outsourcing (RPO) is a workforce solution where an organisation transfers all or part of its recruitment processes to an external provider. The external RPO provider then becomes responsible for managing recruitment within the organisation, including staff, methodologies, technology and reporting. They usually have outsourced recruiters based onsite within the human resources (HR) department to carry out recruitment operations.

RPO providers are experts in talent acquisition, meaning they're up to date on the latest recruiting technology and are able to navigate the recruiting environment. They have the resources necessary to scale recruiting capacity by accounting for people, processes, technology and metrics in its talent acquisition functions. RPO is different from hiring retained search providers or staffing firms because the external provider assumes ownership of the organisation's recruitment processes and hiring results. They're responsible for installing the latest recruitment technology, talent acquisition teams and streamlined recruitment procedures.

Related: What is full life cycle recruiting?

Different RPO models

There's no single RPO solution that suits all organisations. Instead, there are different engagement models based on the hiring needs of the organisation. Some different RPO models to consider include:

End-to-end RPO

An end-to-end RPO encompasses all services involved in permanent recruitment, including technology investments. This model is suitable for single markets, single business divisions or global enterprises. End-to-end RPO helps organisations achieve greater cost savings, hiring outcomes, compliance and efficiency. Value-added services associated with end-to-end RPO help increase the quality of permanent hires. Some examples of value-added services include employer branding, talent marketing, contingent workforce management and internal mobility programmes. End-to-end RPO providers usually deliver on-site and off-site resources, including scheduling interviews, conducting onboarding activities and screening candidates.

Project RPO

Project RPO occurs when an end-to-end approach is applied on a single project basis, such as opening a new branch or a new product launch. Organisations use this framework when they want to hire for a single project but maintain control of internal recruitment capabilities afterwards. Once the project ends, the RPO provider no longer services the organisation.

Related: How to become a recruiter (plus skills and qualifications)

Selective RPO

Selective RPO involves addressing specific components of the organisation's internal recruitment processes. They take a piece of the organisation's recruiting needs entirely off their hands and help strengthen it. For instance, they may oversee candidate management or sourcing and screening processes. A selective RPO provider may also oversee specific divisions or departments within the organisation as they relate to permanent recruitment.

On-demand RPO

On-demand RPO is a contract-based engagement model where recruiters join the organisation for a short period to attract and hire the required talent. These contracts are short-term and sought out during spikes in hiring. The contract outlines the roles the provider oversees within the defined period. Since on-demand RPO usually takes place repeatedly, the provider comes to know the organisation and its messaging, processes and brand. Since services are provided quickly, the organisation doesn't benefit from technological implementations or added services as with end-to-end RPO.

Related: What is a psychometric test in recruitment? (With types)

How is recruitment process outsourcing different from traditional recruiting?

RPO is different from traditional recruitment models because it extends far beyond filling a position within the organisation. It's a strategic partnership that involves presiding over the organisation's recruiting processes as a whole and offering value-added benefits. Some services that differ RPO from traditional recruiting include:

Analysis and planning

RPO providers work with organisations to understand their business goals and objectives. This helps them determine future hiring needs and plan necessary resources and processes to facilitate them. RPO providers create more tailored solutions that contribute to the organisation's overall growth by analysing and planning initiatives that align with the organisation's business strategy.

Related: Headhunting vs. recruiting: how these concepts contrast

Talent sourcing and engagement

RPO providers also help to improve brand recognition to attract more talent. During talent sourcing processes, RPO providers communicate with potential talent through established talent pipelines. This helps them source talent in advance by engaging them in multiple sourcing assessments. These assessments ensure candidates have the necessary skills, qualifications, competencies and motivators to perform a job while guiding them through the recruitment process stages.

Related: Hiring manager vs. recruiter: roles, differences and FAQs

Job marketing

RPO providers help organisations market positions through social media, job boards and professional networks. This enhances candidate exposure, thereby increasing interest in a position. Increased exposure improves the organisation's chances of hiring the best candidate for the role.

Related: What is recruitment marketing? (With benefits and stages)

Candidate care

Traditional recruitment agencies focus on filling a job position without taking candidate needs into account. RPO providers guide candidates throughout the application process to increase talent retention and prevent dropouts. Improved client satisfaction allows them to create a talent pool that they may draw on for future hiring needs.

How to determine if RPO is right for your organisation

Some organisations remain sceptical when determining whether to relinquish control of recruitment to an external provider. Despite this, there are several signs to look for that may help you decide whether RPO is a good option. Steps on how to determine whether RPO is suitable for your organisation include:

1. Examine previous hiring costs and timelines

Determine the cost and timeframe of your current recruitment processes. Time-to-fill and cost-per-hire are important metrics to consider when examining this. A low-cost solution ensures you streamline the recruitment process and get rid of any inefficiencies. Short recruitment timeframes prevent candidates from slipping through the recruitment pipeline because of drawn-out, unnecessary processes.

If you think your hiring procedures might benefit from more streamlined talent pipelines, increased talent retention and rationalised supply chains to reduce time and money, hiring an RPO provider is advised. RPO providers build cost savings into their strategic plans and focus on engaging talent throughout the sourcing process.

2. Consider your talent pipelines

A talent pipeline refers to a pool of candidates who are ready to fill a position. Talent pipelines help plan for recruitment needs in advance, thereby increasing your organisation's chances of hiring the ideal candidate. This is because it combats reactive recruitment strategies, where the organisation works against the clock to source candidates from scratch. Assess whether your organisation has successful workforce planning, succession planning and future forecasting processes in place. These strategies help decrease time-to-hire while improving the quality of hires for short, medium and long-term needs.

3. Assess team structures

Determine whether your organisation has scalable delivery teams in place to respond to recruitment needs on short notice and meet company requirements. Some organisations allocate this function to HR teams with other responsibilities, making it hard for them to adapt to changing hiring circumstances. Using an RPO provider guarantees delivery, as external members are fully committed to honouring the organisation's recruitment needs.

4. Examine new technologies and trends

Keep up to date with new talent acquisition technologies and trends, and determine whether your organisation is implementing them. Recruitment markets shift quickly, so it may be necessary to dedicate an internal team to researching these advancements on a routine basis. Use your market insight to determine whether your organisation continues to grow its hiring procedures with new technologies or has stagnated by comparison. RPO providers regularly invest in emerging recruitment tools and technologies to stay ahead of the competition and help organisations achieve the best results.

5. Assess the quality of hires

Assess the quality of recent hires by analysing skills gaps and dropout levels. Low-quality hires may demotivate employees and encourage low performance. There are several causes of bad company hires. For instance, the organisation may fail to engage with talent or struggle to retain them through a lengthy application process.

Conduct an audit of your existing processes to determine the cause. This involves examining company interview methodologies, sourcing and qualifying strategies and refining onboarding processes. Organisations may hire an RPO provider to do this on their behalf. External providers can then assess and improve recruitment strategies to target more qualified candidates.

Related: How to email a CV to a recruiter (with examples and tips)

6. Determine your recruitment needs

Irrespective of your organisation's recruitment analysis results, consider its current recruitment needs. Determine whether your organisation requires new short-term hires to carry out a specific project or long-term hires to fulfil positions in a new branch. Knowing your organisation's recruitment needs makes it easier to decide whether an RPO is necessary, especially if your organisation has identified problems with its hiring processes. RPO providers can focus on improving processes while organisations navigate the application process, or they may oversee all recruitment responsibilities if necessary.

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