Recruitment Process Outsourcing
Recruitment Process Outsourcing is a form of business process outsourcing (BPO) where an employer outsources or transfers all or part of its recruitment activities to an external service provider.
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RPO is defined as follows: "when a provider acts as a company's internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through the on-boarding of the new hire, including staff, technology, and method and reporting. A properly managed RPO will improve a company's time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance."
The Human Resources Outsourcing Association (HROA), approved this definition in February 2009: "Recruitment Process Outsourcing (RPO) is a form of business process outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external service provider. An RPO provider can provide its own or may assume the company's staff, technology, methodologies and reporting. In all cases, RPO differs greatly from providers such as staffing companies and contingent/retained search providers in that it assumes ownership of the design and management of the recruitment process and the responsibility of results."
Occasional recruitment support, for example temporary, contingency and executive search services are more analogous to out-tasking, co-sourcing or just sourcing. In this example the service provider is "a" source for certain types of recruitment activity. The biggest distinction between RPO and other types of staffing is Process. In RPO the service provider assumes ownership of the process, while in other types of staffing the service provider is part of a process controlled by the organization buying their services.
Long-term view of an RPO
While reducing costs and driving efficiencies is a major reason why companies turn to RPO, it should never be the only consideration.
When choosing an RPO partner, you must ask yourself what you want to achieve, and whether a particular RPO provider can help you get there. Has it got experience in recruiting in your particular sector? Does it have access to the communities that you want to target?
If you are thinking of going down the RPO route it would be wise to contact a number of providers for comparison and ask to speak with their clients to get an insider’s view. A number of RPO firms also provide ancillary services, such as assessor and interviewer training, which may be attractive.
You may be after the flexibility some RPO arrangements offer by allowing clients to bring in more experts at certain times of the year to help organizations cope with the peaks and troughs of their recruitment cycles. Some have access to a network of over 15 occupational psychologists and more than 500 Human Resources professionals who can be brought in on short contracts to run assessment centres.
RPO providers also stress their ability to broaden an organization’s source of candidate supply. Central to a lot of RPO contracts is a commitment to move away from simply using recruitment agencies and to look at other ways of tapping into and attracting talent.
RPO providers will also still deal with recruitment agencies when necessary as their presence on the high street means they will always be a rich source of candidates. Be aware though some companies of RPO providers that have a recruitment agency arm, may just end up passing CVs from one part of their company to the other. It is also important to clarify other measures in any RPO deal such as cost per hire, time to hire, quality of candidates and retention levels. But like all good relationships, it seems the RPO arrangements that flourish are the ones that have developed over time.
RPO's promoters claim that the solution offers improvement in quality, cost, service and speed.
RPO providers claim that leveraging economies of scale enables them to offer recruitment processes at lower cost while economies of scope allow them to operate as high-quality specialists. Those economies of scale and scope arise from a larger staff of recruiters, databases of candidate resumes, and investment in recruitment tools and networks.
RPO solutions are also claimed to change fixed investment costs into variable costs that vary with fluctuation in recruitment activity. Companies may pay by transaction rather than by staff member, thus avoiding under-utilization or forcing costly layoffs of recruitment staff when activity is low.
If a company failed to define its overall recruitment strategy and hiring objectives, then any recruiting program may fail to meet the company's needs. This is especially true for outsourced programs like RPO: RPO can only succeed in the context of a well-defined corporate and staffing strategy.
As with any program, a company must manage its RPO activities. A company must provide initial direction and continued monitoring to assure the desired results. Overall, providing guidance to external activities can present a significant management challenge. Outsourcing of company processes may fail or prove a poor organizational fit. Improperly implemented RPO could reduce the effectiveness of recruitment.
The costs charged for outsourced recruitment transactions may total more than the cost of the internal recruitment department.
RPO service providers may fail to provide the quality or volume of staff required by their customers.
Placing all recruitment in the hands of a single outside provider may discourage the competition that would arise if multiple recruitment agencies were used.
An RPO solution may not work if the company's existing recruitment processes are performing poorly. An RPO solution may not work if the service provider has inadequate recruitment processes or procedures to work with the client.
RPO may not resolve difficulties that organizations have hiring staff when the organization is perceived negatively by potential employees. This will instead require improved branding and an adjustment of image. The perception is that very few RPOs can successfully integrate their client's brand and therefore do not represent their client's brand as well as a retained search or internal recruiting resource may drive brand representation and or marketing.
Further, most RPOs perform their staffing functions and service offsite, further disconnecting the client's growth & recruiting strategy from the actual workforce within the client company. This is important because during a period of rapid recruitment growth, one of the many positive effects that a company typically enjoys is an increase in the workforce wellness or an overall workforce positivity of sentiment of optimism that comes with personnel additions... this may be lessened with an offsite recruiting function.
Organizations with efficient hiring process that are viewed as employers of choice by potential staff may stand to gain negligible benefits from RPO.
Top tips for a successful RPO partnership
- When choosing an RPO provider, don't base the decision solely on cost. Understand what you need in line with your Human Resources strategy. The answer may not be outsourcing at all.
- Ask to speak to clients of the provider, who should be able to offer an insider’s view on whether the company is suitable.
- Build a number of key performance indicators into the contracts so the RPO provider has targets and you can track the improvements.
- Consider keeping some recruitment activities in-house, for example, for specialist and senior roles.
- If your recruitment outsourcing partners are based at your offices, it enables you to manage them better, and helps them gain an enhanced understanding of your workplace culture.
Once you’ve decided that recruitment process outsourcing is the right move for your organization, ask premiercallcentre.co.uk UK's national business leader to walk you through our check list for an RPO criteria.
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