Why You Should Be Thinking about RPO
*Be sure to check out the other article in this series on hybrid RPO!
How would you define your departmental (or organizational) goals for the next 12 months? Do more with less? Increase productivity? Hire and train new staff? Perhaps all of the above apply. What if you could outsource some or all a certain job function in order to meet these goals? For recruitment, that’s where RPO comes in. Recruitment Process Outsourcing is a way to increase efficiency in the areas of sourcing, screening, hiring, and onboarding employees. Third party companies work in a variety of ways to relieve these responsibilities, whether a portion or all of them, on a full-time or temporary basis depending on your needs.
Is an RPO option right for you? The first step in determining what solution may be best is to figure out exactly where the faults are in current processes or assess what problems are currently hindering you from meeting objectives. Examples of issues that an RPO could be helpful in solving are:
- Current sourcing techniques are not producing quality candidates.
- Lack of consistency in hiring processes.
- Onboarding and training processes are not effective or not meeting needs.
- Staff is spending too much time devoted to one process (ex. Sourcing candidates), creating deficiencies or loss of production in other areas.
- Lack of technology and/or resources to aid in recruitment is negatively impacting operations.
- Shortage of qualified candidates.
- Issues with hiring once candidates are identified (ex. undesirable circumstances such as salaries or location or an extensively long recruitment process).
In a detailed RPO guide, Manpower describes the business thinking behind an increase in RPO popularity:
Working as the organization’s internal recruitment function, an RPO provider can leverage market knowledge, industry expertise and access to talent to improve quality of hire, speed of delivery and cost containment. These are aspects of the recruiting process that organizations often struggle with on their own, and rightly so, given that they are typically more focused of their own core business. By outsourcing the recruiting function, companies can dedicate more time and resources to their strategic initiatives, ensuring they can focus on key strategic initiatives.
As competition for qualified talent heats up, organizations will rely on their RPO providers more than ever to supply them with the employees needed to meet organizational objectives. The paradigm for what companies will need from their RPO provider will continue to change, and RPO providers will undoubtedly rush to keep up and deliver new services to improve their clients’ ability to hire qualified talent. While many of these changes have already taken effect, it is clear that the RPO environment will continue to change dramatically in the coming years. The challenge for organizations, then, is to select an RPO provider that not just supplies talent, but can also meet the changing needs of the organization through innovative solutions to address their most complex recruitment needs. In today’s business environment, the best RPO providers are delivering in three main ways. Specifically, they are: 1) tapping into Big Data, 2) micro-targeting talent, and 3) acting as a test lab for their clients’ recruiting functions.
It comes down to balancing the overall cost against the potential benefits. Many organizations opt for more of a hybrid RPO. Utilization of a hybrid RPO means the desire of hiring an outside vendor to assist internal personnel, rather than fully taking over a particular function or completely replacing current recruitment staff. Keep an eye out for next week’s article for a more extended description of hybrid RPO differences and benefits.
According to service provider PeopleSoft, The Case for Recruitment Process Outsourcing comes by way of:
Flexibility & Scalability
- In today’s rapidly changing economy, many organizations are faced with decisions on how to meet their internal hiring needs. With recruiting departments cut substantially, the decision to rebuild, completely outsource, or to augment their existing resources with flexible, scalable resources is a tricky one.
- RPO allows the client the flexibility to scale resources up and down in a cost-effective manner.
- Scalability – It typically costs an organization more to hire during peak times because there is a need for additional resources to compensate for the increased hiring need. Similarly, in periods of low volume, it also costs an organization more to hire because resources are not fully utilized. In an RPO solution, there is not typically a premium charged during periods of high or low volume.
- Process efficiencies – By partnering with an RPO provider, organizations can take advantage of the best practices they’ve developed. These efficiencies allow an RPO provider to price its services below a company’s current operating costs.
- Reduced turnover – By producing a higher quality hire, organizations see lower early attrition, which results in cost-savings for the client.
- It is widely thought that by partnering with an expert in recruiting, the quality of the hire will improve. This is true, because RPO providers have broad depth of recruiting experiences and draw upon them when delivering RPO services.
- Utilizing a structured hiring process promotes quality by facilitating more consistency among the hires.
- OFCCP compliance is a big concern for many large organizations. RPO providers follow rigorous processes to ensure a legally compliant hiring process.
- By maintaining accurate records of hiring activity, RPO providers can supply critical information to support audit requests from the OFCCP.
Opportunity to Leverage ATS Technology
- Some RPO providers offer a bundled ATS/Recruitment solution. This is a fantastic option for organizations who haven’t yet invested in an ATS.
Companies can utilize RPO for process management, reference checking, sourcing and screening, onboarding, or any other function in the talent management realm and reap any one of the benefits highlighted above. Organizations facing a merger or acquisition, those with rapid expansion plans, possible global initiatives, or any number of other circumstances should be evaluating the impact an RPO strategy may have on their current processes and the bottom line.
Traci Kingery, PHR is an HR Professional and freelance writer based in the Midwest, specializing in immigration and talent management. When she’s not improving unemployment, she keeps busy with her husband and four children.