Recruitment Process Outsourcing: Should Your Business Consider It?

Recruitment process outsourcing (RPO) involves an employer hiring a third-party provider to perform recruitment and related processes.

Small and medium-sized businesses in particular benefit from RPO solutions that help them improve their talent acquisition efforts and fulfill their hiring needs. Businesses often find that recruitment process outsourcing:

• Is cost-effective and efficient
• Provides access to specialized expertise
• Offers scalability and flexibility
• Enables better candidate experiences
• Improves time-to-fill metrics

Let's review the core principles of RPO, see how it differs from traditional recruitment, and explore the benefits of using an RPO provider.

Understanding recruitment process outsourcing

Hiring has become a more in-depth, complex process over the years. Businesses compete in a tight labor market to find and hire the best talent. Candidates routinely  "ghost" companies — making appointments for job interviews and failing to show up.  Advanced recruitment technology helps, but the process can still be time-consuming and costly.

RPO services address these issues and more. RPO providers leverage your company's culture, business model and other specific information to build your talent pipeline. They can help with the entire recruitment process or perform specific human resources responsibilities, such as:

• Analyze your workforce needs
• Conduct workforce planning
• Market your job openings
• Provide screening processes for candidates
• Report on recruiting performance metrics

How RPO differs from traditional recruitment

Traditional recruitment is handled by in-house personnel. It could be an HR specialist, the head of a small business or the manager of the team with the vacancy.

With in-house recruitment, businesses might find themselves choosing from narrow pools of candidates. They often rely too much on word of mouth and publicize job openings in limited, ineffective ways.

Different hiring managers could have idiosyncratic ways of recruiting. The different processes might not apply HR best practices. This could result not only in disappointing hires, but also in employment law compliance problems.

RPO, in contrast, means having an experienced provider applying HR best practices to every hire. The consistency helps maintain an objective recruitment practice.

The leaders of the business still make the decisions on hiring, but an RPO can give them a much better pool of candidates.

Benefits of recruitment process outsourcing

RPO providers offer many benefits for all sizes of companies, including small and medium-sized organizations.

More cost-effective and efficient

RPO providers often have economies of scale that enable them to charge you less for services than you would otherwise pay. It also frees up internal resources that can be applied to other endeavors.

Instead of investing in expensive recruiting technology, training programs and dedicated HR staff, companies can leverage an RPO provider's infrastructure and expertise at a lower cost.

RPO providers can offer a predictable cost structure, saving businesses from unexpected expenses when hiring demands accelerate. Organizations also may have the option of paying only for the services they need, making it a more cost-effective choice.

Access to specialized expertise

RPO providers can bring specific industry expertise as they help SMBs tap into the right talent pools and make informed hiring decisions.

An RPO provider's personnel are proficient at recruiting and hiring. It's all they do. Many small and medium-sized businesses lack the skills and experience required for this important task.

An RPO provider also might have specialists with experience in particular business sectors, in addition to their overall recruiting prowess. They often maintain relationships with passive candidates who aren't actively job searching, but could be perfect fits for your organization.

Core competency focus

An RPO provider allows companies to concentrate on their core business functions while experts handle the intricacies of talent acquisition. This shift in focus can result in improved overall business performance.

Technology advantage

RPO providers have the resources to employ innovative recruitment technologies and analytics tools to help identify the most suitable candidates. Companies benefit from access to these advanced resources without investing in them themselves.

Broader reach 

RPO providers often have a national and/or global presence. This allows organizations to tap into a broader talent pool and expand their operations globally with ease.

Scalability and flexibility

Companies often experience hiring fluctuations. RPO staffing solutions offer the scalability and flexibility to expand or contract recruitment as required. This can help a company avoid being overwhelmed by recruiting in busy times.

Better candidate experiences

Overwhelmed teams at SMBs may sometimes give a disjointed, disorganized impression to a job candidate. An RPO provider can represent clients in a professional way.

SMBs can gain a competitive advantage by offering a superior candidate experience. RPO providers prioritize candidate engagement, which can give potential hires a positive impression of the company. This helps to build a strong employer brand, attract higher-quality candidates and develop a stronger, more productive workforce.

Improving time-to-fill metrics

Productivity can suffer while a business struggles to fill job openings. RPO providers can help you develop and maintain efficient processes that get qualified people in your seats faster than other methods. By using efficient technology, like applicant tracking systems, a provider can reduce time-to-fill metrics.

And faster time-to-fill performance eases the disruptions that turnover has on business operations. When critical positions remain vacant for extended periods, existing team members often face increased workloads and stress, potentially leading to burnout and further turnover.

Cost models for RPO

In choosing an RPO provider, a business must understand the pricing models for RPO providers. The choice of model can significantly impact hiring costs and the advantages of outsourcing recruitment.

• Fixed fee. The RPO provider can charge a fixed fee for services. It doesn't matter how many hires your company needs. If your organization has consistent hiring needs, this pricing plan could work well.
• Per-hire fee. If your business has sporadic hiring requirements or seasonal employment trends, you may want a pricing structure where you pay on a per-hire basis.
• Percentage of salary. This model is based on a percentage of the hired candidate's annual salary. RPO providers make more money on placing higher-level (higher paid) managers and executives.
• Project-based. For specific recruitment projects, businesses can opt for project-based pricing, paying a predetermined fee for the completion of the project.
• Hybrid models. Hybrid models combine elements of different pricing structures to tailor the RPO arrangement to the specific needs of the business.

When to consider recruitment process outsourcing

When deciding whether it's time to engage with an RPO provider, look for certain signs within your organization as well as external market intelligence.

Signs within the organization

• High turnover. If your organization is struggling with high turnover rates, RPO may help improve retention by recruiting people who align better with your business culture and goals.
• Inefficient hiring process. Lengthy and cumbersome hiring processes can turn off job candidates and hurt productivity. RPO providers can help with process optimization and improve efficiency.
• Inconsistent results. If your recruitment outcomes are inconsistent or frequently result in misfits, RPO providers may offer strategic guidance that can lead to better quality of hires.
• Resource constraints. When resources are limited, outsourcing recruitment can be a cost-effective solution. You can allocate money you would spend on recruitment toward more strategic areas.

Industry-specific considerations

• Your company hires seasonally. Industries with seasonal fluctuations in hiring needs can benefit from RPO provider's scalability.
• You're seeing skill shortages. If your industry faces skill shortages or highly competitive talent markets, RPO providers can give you a competitive edge by helping you reach qualified candidates.
• You're eyeing global expansion. RPO providers with global reach are valuable when expanding into new markets.

Other factors

• Business growth. RPO providers can help fast-growing businesses struggling to meet their hiring needs.
• Cost control. For businesses looking for cost efficiency and better resource allocation, an RPO provider can offer a cost-effective solution.
• Compliance requirements. Some industries are regulated more than others. RPO providers skilled in specific industries can help your business with risk management and compliance.

Building your business by taking advantage of RPO

Recruitment process outsourcing could help your organization to create consistent hiring practices and elevate the quality of your new employees.

When companies put their hiring strategies in the hands of TriNet, they acquire the tools and expertise needed to help them recruit and hire top talent. From the moment you kick off the hiring process, our applicant tracking solution helps to organize candidates’ information and streamline your recruiting process. With our services, you can:

• Create job posts that include custom questions and skills assessments.
• Get targeted and featured placement in major job search sites.
• View candidate profile pages to track their place in the hiring process and review their test scores and feedback from their interviewers.
• Design automated workflows to suit your needs.
• Access pre-built and custom reporting.
• Easily request FCRA-compliant background, drug or credit checks on candidates.

With our PEO services, we also can help you attract top talent through outsourcing benefits. You can gain access to premium benefits that typically are accessible only to larger organizations. It's a strategic partnership that could make the entire employee lifecycle smoother and more effective.

To learn more about building an online recruiting and onboarding strategy, download our free eGuide: Recruiting and Onboarding Online: Top Tips for Getting It Right.