What is Recruitment Process Outsourcing (RPO) and how does it work?

Talent Acquisition Managed Solutions
Tomás Battaglia

By Tomás Battaglia
July 10, 2023

June 6, 2024

0 min read

In today's fiercely competitive business landscape, securing the right talent at the right time is a strategic advantage and a critical necessity for organisational success. 

By entrusting the recruitment process to specialised service providers, you can streamline your operations, enhance efficiency, and tap into a pool of qualified candidates that might otherwise remain elusive. This allows organisations to scale resources as requisitions fluctuate to meet hiring demands without increasing budgets to pay for in-house talent acquisition teams or recruitment agencies.

Recruitment Process Outsourcing (RPO) providers help firms stay ahead of their competitors by developing strategic solutions that positively impact cost, time and quality.

In this article, we aim to help readers understand what is RPO, exploring its benefits, best practices, and why it's becoming an indispensable tool for companies striving to stay ahead in the talent acquisition game.

  1. What is RPO in recruitment?
  2. How can RPO benefit your business?
  3. Why do startups need workforce solution providers?
  4. Achieving long-term success through RPO 

What is Recruitment Process Outsourcing (RPO)?

Recruitment Process Outsourcing is a service performed by a particular company that aims for the complete evaluation of the recruitment process of another company. After the evaluation, a diagnosis is presented to reduce recruitment costs and make talent acquisition much more planned and optimised.

RPO doesn't limit the type of workforce to just one condition. It can help with hiring permanent staff or temporary workers, depending on your business needs. The most capable RPO companies can take ownership of the entire recruitment process to precisely scale it and integrate it naturally into the dynamics of startups.

Essentially, an  RPO provider functions like an in-house recruiter for a company, adding efficiency and flexibility to the recruitment process.

How can Recruitment Process Outsourcing benefit your business?

three female employees working at laptops in the office

Source: Pexels/CoWomen 

The reasons for outsourcing vary from each organisation. However, the benefits are far-reaching, allowing HR to attract top talent and hire the right talent for their business. This can include project-based RPO solutions for one-off, business-critical hiring demands or a longer-term, fully-sourced solution in which the provider becomes part of your internal team and brand.

1. Increased hiring effectiveness

An RPO solution increases an organisation's hiring and operational effectiveness by developing a solution that attracts the best talent available regarding cultural fit and skill set while reducing hiring time and cost.

Strategic and proactive talent mapping and pooling can significantly reduce a company’s time to hire, develop future-proof talent and provide a fully scalable solution to cope with spikes in hiring demand.

2. Improved efficiency

The world of talent acquisition has developed rapidly over recent years, with the introduction of new recruitment technology, including Artificial intelligence (AI), enabling innovative organisations to attract talent with redefined people strategies

An RPO provider can work alongside this innovation and provide access to your business's latest tools, technology and expertise.

New tools, including AI, video interviewing, and other online candidate attraction and selection methods, have reduced hiring time by up to 40%. These advances in process automation and technology allow companies to re-engineer a more effective and efficient selection process, enhancing the overall brand and experience for candidates.

3. Cost savings

For many organisations, the actual cost per hire isn’t accurately quantified. An RPO provider will quickly be able to understand your existing cost base per hire while implementing process automation to reduce the overall hirig cost.

While the core focus of any RPO provider will be to ensure they attract and engage top talent, there must also be a focus on cost containment. This ensures the appropriate talent is hired without increasing cost and also ensures that the quality of hire is not neglected at the expense of cost.

An RPO solution will deliver cost savings against your current cost base over sustained periods. These pricing models can include but are not limited to:

  • Reducing time to hire (ultimately reducing overall cost)
  • Reducing cost per hire and associated fees
  • Reduction of advertising fees
  • Reduced attrition rates
  • Increasing the quality of hires

4. Regulatory compliance and risk management

RPO providers possess in-depth knowledge of employment laws and regulations, ensuring that the talent acquisition process adheres to legal standards. This compliance enhances recruitment functions and minimises the legal risks associated with hiring practices.

While working with a Recruitment Process Outsourcing (RPO) provider can offer many benefits, there are some reasons why a business might choose not to engage with one:

1. Loss of control

Engaging an RPO can lead to challenges in maintaining control over the recruiting process. Companies that value direct interaction and decision-making by their human resources or internal recruitment team may find this difficult.

2. Cultural misalignment

RPO providers work with multiple clients and may not fully align with or understand the unique culture of every organization. This can lead to mismatches in future talent management,  potentially affecting team dynamics and company culture.

3. Generic processes

RPO services may utilize standardised recruitment strategies that aren't tailored to address the unique challenges of accessing specialised candidate pools, which can be critical for businesses with niche talent requirements.

4. Long-term costs

While RPOs can be cost-effective in the short term, long-term contracts and dependencies can become expensive. This is especially true if hiring volume fluctuates significantly, as some contracts may not allow for downward scalability without financial penalties.

5. Data security and privacy concerns

Working with an RPO involves sharing sensitive company and candidate data. If an RPO provider does not have robust data security and privacy measures, it can expose the business to data breaches and compliance issues.

Why do startups need workforce solution providers?

In the dynamic ecosystem of startups, where agility, innovation, and growth are paramount, the need for efficient workforce solutions becomes increasingly pronounced. Startups face a unique set of challenges as they navigate the path from conception to scalability, often constrained by limited resources, time pressures, and the pressure to build high-performing teams swiftly. 

Workforce solution providers are pivotal in the startup landscape, offering strategic advantages to help new businesses thrive in a competitive market.

Leveling the competition against tech giants is just the tip of the iceberg

We've already talked about how cost reduction and gains with agility during the hiring process is fundamental in competing against major technology companies. The truth is that we can’t just rely on a matter of competition; it's a scenario of imminent adaptation that we're witnessing.

Big companies today, for instance, were developed with outsourced tech talent. Such as the case for GitHub and WhatsApp. That's because the demand for a multidisciplinary and diverse talent spread is increasing worldwide.

Recruitment process outsourcing empowers startups to level the playing field against tech giants by offering streamlined access to top-tier talent and cutting-edge recruitment strategies. By leveraging an RPO's talent acquisition function, startups can rapidly assemble dedicated teams of skilled professionals, enabling them to innovate and execute projects with agility and precision, ultimately enhancing their competitiveness in the tech industry.

Web3 & DeFi: the digital space is under construction

In their Q4 report on the emerging tech sector, Pitchbook analysts show how the Web3 & DeFi segment dominated the tech industry with USD$4.3 billion invested in 2021. This metaverse niche was the leader in investments in Q3, with USD$1.2 billion dollars, and Q4 at $2.4 billion —  basically a 100% spike.

The metaverse has been a big bet, and it seems to continue to present substantial investments in the coming periods. The digital space is being created, and consequently, remote work has all the qualities it needs to be constant and to have its distance diminished with virtual reality and decentralised finance.

Recruitment process outsourcing offers startups a strategic advantage in navigating the dynamic digital landscape by providing access to specialised talent pools and expertise tailored to their evolving needs. By entrusting recruitment to dedicated professionals, startups can focus on core business objectives, ensuring agility and scalability in a competitive market.

Communication and collaboration technologies are disrupting the workspace

a group of colleagues talking at a desk

Source: Pexels/fauxels

Communication and collaboration technologies are fundamentally reshaping the traditional workspace. Startups, in particular, are at the forefront of this transformation, leveraging digital tools to foster remote work, streamline workflows, and enhance productivity.

However, amidst the myriad of options available, startups often face challenges in effectively integrating and maximising the potential of these technologies. This is where workforce solution providers play a crucial role. By offering expertise in selecting, implementing, and optimising communication and collaboration tools tailored to the unique needs of startups, these providers empower fledgling ventures to harness the full power of modern technology.

From facilitating seamless remote collaboration to enabling real-time communication across geographically dispersed teams, workforce solution providers equip startups with the tools and strategies necessary to thrive in the digital age.

Achieve long-term success through Airswift's Recruitment Process Outsourcing services

As the talent landscape evolves, effective workforce planning is essential for organisations aiming for long-term success. While cost reduction may not be necessary for every organisation, ensuring the future readiness of your talent pipeline is crucial.

Partnering with a Recruitment Process Outsourcing (RPO) provider enhances your ability to attract high-quality candidates through expert-driven recruitment services. These services offer innovation and scalability and ensure diversity in your hiring process, aligning with strategic talent acquisition goals.

At Airswift, we manage key aspects of the recruitment process tailored to your needs, including sourcing, assessment, candidate screening, background checks, evaluation, and onboarding of candidates.

If you would like to find out more, please contact us here

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