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Recruitment process outsourcing (RPO) is the practice of employing a specialist organization to undertake employment processes and control. By outsourcing this activity, the parent company is able to streamline internal personnel. A further advantage is the guarantees and insurances provided by the external outsourcing organization. Many companies turn to recruitment outsourcing as a means to reduce internal staffing by no longer carrying out the recruitment process using their own workforce.
As of 2009, the term recruitment process outsourcing was accepted as an approved definition by the Human Resources Outsourcing Association (HROA). Due to the fact that the company utilizing this outsourcing is passing all or part of its recruitment department to an outside organization, the process is considered a kind of business process outsourcing (BPO). A provider of RPO can choose to either undertake the required work with their own internal staff or, alternatively, can take on some or all of the client company’s employees. This also applies to methods, processes, and technologies that may be required to carry out the recruitment activities.
An outsourcing company providing this service is differentiated from other types of staff supply companies by the ownership of responsibility. While staff supply companies provide a service, as their name would suggest, an RPO provider is required to take ownership of the entire process involved in staff recruitment. Similarly, an outsourcing company will not merely source staff as various temporary recruitment consultants will. The RPO provider instead fully analyzes and identifies the core requirements of the client before providing the recruitment function because full responsibility for finding the best candidate for the job lies with the outsourcing organization.
There exist inherent risks in utilizing an outsourcing organization, but there are also some large potential benefits. These benefits can include overall cost savings as well as a higher level of quality control when the entire process is handed over to the outsourcing company. In addition, performance targets will commonly be set as part of the relationship between the RPO provider and the client company. This provides encouragement to achieve target standards, which do not generally exist in an internal structure.
Some of the potential risks involved in RPO include the actual cost of employing the outsourcing organization not balancing with the level of service provided, the lack of regulation regarding RPO service, and also the potential reduction in competition. Some risks actually stem from poor management of the outsourcing organization by the client company. Recruitment outsourcing only works if the client is operating a process of continual monitoring and direction setting.