RPO stands for Recruitment Process Outsourcing, and refers to a company handing over all or part of its recruitment environment to a third party.
There are a few different styles of RPO; in its early stages 20 or so years ago, RPO just meant that the transactional side of recruitment was given to one service provider, with some pretty varied results. These days, RPO is much more closely aligned to business strategy, so you should find that you get a lot of value as well as a cost saving. A good RPO partner will come to you with ideas about how the recruitment environment can be improved, both before you sign up with them and during your contract.
Previously, yes. These days, absolutely not. Smaller companies can benefit enormously. Because you’re working with a broad team and not just one individual, an RPO will bring skills, knowledge and experience that a single in-house recruiter won’t have, as well as an Applicant Tracking System. To get the same knowledge, you’d need to hire a varied team, including strategists, marketers, analysts and hands on recruiters. Recruitment as applied to business improvement, as distinct from agencies trading CVs, is a strategic skill and the result impacts every aspect of a business.
A good RPO partner will look at every aspect of your recruitment environment and improve it. This ranges from the very basic matrics such as time to hire and cost of hire, right through to consulting with you on improving your Employer Value Proposition, or EVP. You should find that the skills and knowledge you have access to will dramatically improve your ability to find, attract and retain the right people for your business.
That depends on a few factors. The most crucial is: Is recruitment a pain, is it holding your business back, and do you already know how to make it work better? The answer almost certainly isn’t to hire an in-house recruiter and tell them to reduce agency spend as the problem probably lies a bit deeper.
How many people do you want to appoint? Where in your business and at what level? How does your management team feel about recruitment? Do you have recruitment skills in house already (not just an HR team with some spare capacity)? Do you have the time and the budget to redefine your recruitment environment and its supporting technology? Do you have access to a host of KPIs so you can start working out where to make improvements?
Is this all sounding too complicated to know where to start? If so, RPO is probably worth exploring. Let the experts do all the heavy lifting.
Almost certainly, yes, and you’ll save a huge amount of time, too. You need to factor in all of the variables and not just agency fees to create a proper cost comparison. You also need to look at value: what are the broader strategic benefits to you of recruitment working properly?
Most companies can appoint an in-house recruitment team and the top line costs look about the same, if not cheaper than, an RPO solution. However, it takes time, effort, skills and experience to work out how to make a recruitment environment really effective and efficient. These skills are in short supply and are really costly, and if you use an interim to set everything up they probably won’t be around to improve things.
The major benefit of RPO is that you’re paying for focus and continuous improvement. You’re also paying for knowledge of lots of different recruitment environments. This has three benefits: first, standards don’t slip over time, they improve with lower costs and better results; second, corporate memory is retained if a recruiter leaves - if you lose an in-house recruiter you also lose their company memory; third, you don’t have to do anything to improve performance, your RPO has to hit targets. Training, development and staffing are not your problem. Solution redesign is built in.
No. RPO companies can take a small project to prove the concept and then go from there. You can choose what aspects of a process to outsource, too, on a sliding scale from absolutely everything to just sourcing candidates. It’s up to you.
Absolutely not. It’s a business critical function, after all. However, the degree of involvement you retain is entirely up to you. RPOs can handle the whole thing and report back to you regularly, or you can appoint someone in-house to oversee all activity. It should be a partnership.
If you’re thinking about costs rather than value, you can put in place service level agreements at the beginning of your contract so that the RPO provider has the impetus to hire directly rather than to use agencies. However, be aware that SLAs work both ways, and you’ll need to uphold your end of the bargain. This will probably include not allowing hiring managers to use agencies, for example.
If you and your RPO partner have both given it a fair crack of the whip and you still can’t see improvements, it’s time to have a grown-up conversation about how to part ways. How this goes very much depends on the nature of your relationship and how important you are to your RPO partner as a client. Chances are, if you feel that you’re on good terms because you’ve treated each other with respect, you’ll be fine.