Recruitment process outsourcing (RPO) first came into play in the 1970s when Silicon Valley’s highly competitive high-tech labor market was booming. Those primitive RPO models consisted of little more than purchasing lists of potential candidates from competitors’ employees.
Today’s RPO models are significantly more sophisticated — and add considerably more value. Unlike staffing companies and contingent or retained search providers, RPO providers manage and own part or all of the recruitment process function in a client organization, from job profiling through the onboarding of the new hire. RPO providers deliver staff, technology, talent management practices and reporting. Customized solutions can be designed to meet client-specific needs, with the RPO provider serving as an extension of the organization, providing project assistance or managing a full outsourced solution.
RPOs simplify the overall recruitment process so that businesses can focus on executing against strategic objectives, rather than the tactical necessities of hiring. RPOs are flexible and scalable and can effectively handle the highs and lows of talent demand, decrease cost-per-hire and time-to-hire, and improve retention rates.
I recently met with a client to discuss its desire to outsource its service desk. The company’s internal search team had struggled to find good talent and, often, when good people were hired those employees soon were lured to other departments within the company. My firm recommended a two-phase solution. First, we implemented an RPO to help improve the company’s overall hiring processes. This made sense because RPOs focus solely on determining the exact candidate the client needs, improving time to hire, reducing costs and ensuring that there is a pool of candidates ready when the need arises. The longer-term solution involved outsourcing the entire process.
The most successful RPOs are true partnerships where all the key stakeholders — executive leaders, operations leaders, HR teams, procurement — buy in to the process to accomplish the organization’s hiring goals. It’s not easy to get all those stakeholders on the same page, but if you can engage them, you’ll have a much better chance of success.
Here are some additional guidelines when considering an RPO:
- The RPO process must be clearly defined from the outset. You must have clear expectations of what you are trying to accomplish and a designated internal liaison to partner with the RPO provider.
- A clear understanding of the company culture, history, benefits, products and business is essential.
- So are robust job descriptions, effective communication with hiring managers and pay rates aligned with the marketplace.
- Make sure you have a process in place to measure results, track cost savings and determine overall success.
- Be prepared to revisit your RPO strategy when your hiring needs change.
When properly implemented, an effective RPO can enable a more flexible, agile workforce that can help an organization deliver its business goals. The opportunities are there: According to Staffing Industry Analysts, the global RPO market is estimated at $4 billion and the U.S. RPO market is estimated between $1.5 and $2 billion.