March 5, 2024

What is an RPO (Recruitment Process Outsourcing)

John Kim

Co-founder @ Paraform

In this blog

What is Recruitment Process Outsourcing?RPO vs Recruitment AgencyWhat are the types of RPO partnerships?BenefitsIs RPO right for you?Alternatives

Have you ever felt overwhelmed by the demands of finding and hiring the best talent? You're not alone. Recruiting the best talent takes up a significant amount of time and resources, taking you away from other areas of business growth. A common solution to this problem is using an RPO.

RPO stands for Recruitment Process Outsourcing. It's a business strategy where a company partners with an external provider to manage all or part of its permanent recruitment activities.


Let’s go over what you need to know before choosing whether to use an RPO provider or not.

What is Recruitment Process Outsourcing?

Recruitment Process Outsourcing (RPO) is a strategic business arrangement where an organization delegates all or a portion of its recruitment activities to a specialized external provider. In simpler terms, you hire a company to handle the sourcing, attracting, and onboarding of new employees.

RPO vs Recruitment Agency

Both RPO providers and recruitment agencies assist companies in finding and hiring talent, but they differ in their approach, scope, and overall goals. Recruitment agencies find, screen, and submit qualified candidates to a client.

An RPO creates a roadmap for your entire talent acquisition strategy, executes a plan, and reports the results to you along the way.

In other words, an RPO offers a higher level of engagement, assesses what your company needs, and provides actionable insights.


For example, if you’re looking for a marketing person to hire for your company, a specialist Recruitment Process Outsourcing company can assess what your company needs and advise you on whether to hire a growth marketer, product marketing manager, or head of PR.


RPO providers are almost like interim talent acquisition teams for your company.

What are the types of RPO partnerships?

There are several different types of RPO models available, each catering to different needs and offering varying levels of engagement between the company and the provider.

Here's a breakdown of the four most common types:

1. End-to-end RPO (Full-Service RPO, Enterprise RPO)

In a full-scale talent acquisition operation, companies use an RPO provider to hire every employee in a business during a period of growth.

The RPO takes over the entire recruitment process, benchmarking salary, sourcing and screening candidates, and takes on all the responsibilities of a talent acquisition team.

This model includes detailed reporting with a structured talent acquisition strategy and the full end-to-end process is usually fixed for a period of 3 months.

2. Hybrid model

With a hybrid model, a company will have an internal talent acquisition team already filling certain roles but needs help to fill other roles in a specific niche.

For example, a company may already have the software engineer hiring under control but might want to utilize the services of an RPO to hire their sales team.

3. Project-based

In a project-based model, a company will outsource an RPO to handle hiring for a specific project. This could be a select number of openings for a designated location or timeline.

For example, if a SaaS company wants to hire a bunch of UX researchers for a new product, the RPO provider will take on the project of hiring UX researchers for a set period of time.

4. Temporary hires

A temporary model is where a company aims to hire a bunch of staff on a contract basis, for a new project or a hyper-growth phase, and an RPO partner goes out and not only sources the staff but also pays them and manages time off.

A company will pay the partner a day rate and the partner will forward that to the the temporary employee. Companies can benefit from not having to pay any full-time benefits to the staff and also get a high volume, fast.

Companies like IBM often use this model.

Benefits

Implementing an RPO can give you the following benefits:

1. Speed: RPO providers are experts in recruitment and have the technology and expertise to hire at pace.
   
2. Candidate quality: RPO firms have access to a wider talent pool and have strategies to attract top candidates, leading to a higher caliber of applicants.
   
3. Cost Savings: While there are associated costs with RPO, it can lead to you saving money overall by improving hiring efficiency.
   
4. Compliance: RPO providers stay up-to-date on the latest employment laws and regulations, ensuring your company adheres to compliance standards.

Is RPO right for you?

This all depends on your circumstances. Here are some factors to consider:

• How fast you want to scale: RPO can benefit companies of all scopes, but it's often a better fit for larger organizations with high-volume recruitment needs.
  
• Your internal resources: Access what your hiring capabilities are internally.
  
• Your budget: RPO has associated costs, so it's important to know if you have the budget to outsource and what your short-term ROI is.

Alternatives

There are two alternatives to consider:

1. Building your internal team

You can expand your internal HR/hiring team with dedicated recruitment specialists–also known as bringing your recruitment in-house. This allows for consistent employer branding and candidate experience throughout the recruitment process and is potentially cost-effective after a year or two.

However, with that being said, there are a few drawbacks:

• It requires significant investment in technology (LinkedIn Recruiter, CRM) and ongoing management of the internal TA team.
  
• It may require additional investment in training and development to ensure your team possesses the skills to recruit effectively.
  
• It’s not always a guarantee that your internal hiring team will make hires and you may spend more money with no tangible results.
  

2. Paraform

Paraform is an all-encompassing recruitment marketplace where companies sign up, post jobs, and specialist freelance recruiters will source, and screen candidates for you on a contingency basis.


You can enlist the help of vetted freelance recruiting talent and get expert help at a fraction of the cost of partnering with an RPO or staffing agency. 


Multiple specialist recruiters will help you find the right person for a bounty fee of your choosing.


Give it a try!