Recruitment Process Outsourcing (RPO) 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.
RPO may involve the outsourcing of all or just part of recruitment functions and process. The external service provider may serve as a virtual recruiting department by providing a complete package of skills, tools, technologies and activities. The RPO service provider is “the” source for in-scope recruitment activity.
On the other hand, occasional recruitment support, for example temporary, contingency and executive search services is 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. Differentiating between RPO and other types of staffing
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.
Basic Benefits in RPO
The benefits in RPO are as follows:
- RPO’s promoters claim that the solution offers improvement in quality, cost, service and speed.
- RPO providers claim that an economy of scale enables them to offer recruitment processes at lower cost while economies of scope allow them to operate as high-quality, specialists.
- Economies of scale and scope are said to 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 sacking recruitment staff when activity is low.