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One of the biggest factors that may influence the success or failure of your business is the capability of the people who work for you. In today’s business landscape, finding the right workers with the skills you need to be successful can be challenging.
Seeking out, nurturing, and training a new hire is often a time-consuming and expensive process. Businesses need to make sure they get it right the first time. Many companies are turning to alternative staffing solutions to reduce the risk of selecting the wrong talent.
One such solution is recruitment process outsourcing (RPO). By hiring an expert to take control of your internal recruiting processes, you might save time and money and give your business a better chance of recruiting quality workers.
This article covers everything you need to know about RPO, including what it is, when you should consider using it, and how it can help your company streamline staffing logistics.
What is recruitment process outsourcing?
RPO in staffing is a business process technique in which a company relies on an external agency to perform all or some of its talent acquisition tasks. RPO providers are much more involved in a company’s hiring processes than traditional staffing companies.
An RPO firm functions as an extension of your company’s hiring process. The outside firm can handle the processes of attracting, screening, interviewing, and onboarding talent. Some RPO firms will even conduct worker exit interviews.
Effective RPO staffing solutions can help your company save money, fill positions quickly, maintain an engaged workforce, and decrease turnover. When you work with an RPO, you get access to all of its hiring technology and expertise.
Types of RPO to consider include:
- End-to-end RPO: The RPO company handles everything involved in recruitment, from attracting candidates to performing exit interviews. Companies generally hire end-to-end RPO firms for a long period (typically a year or longer).
- Project RPO: The RPO company handles almost all the same processes that an end-to-end RPO firm would, but for a shorter period (e.g., the duration of a project). Usually, businesses use project RPO for months at a time.
- Selective RPO: The RPO company handles only one or a few recruitment processes for a business. The RPO firm may handle tasks like recruitment marketing or candidate screening. Businesses that use selective RPO agencies usually already have expertise in some aspects of recruiting. Selective RPO is also known as limited RPO or point-of-service RPO.
- Recruiter on demand (ROD): The RPO company handles recruitment for a very short project or service. This flexible model of RPO helps companies quickly find workers to do smaller tasks.
- Contingent ROD: A company needs to make a hire immediately, so it hires one or multiple RPO firms. Generally, the company’s internal HR department will also seek to hire the needed worker. The RPO competes with the other entities looking to fill the position and is paid only if it finds the candidate who’s hired.
Example: When to use an RPO solution
Your company might choose to use an RPO solution for its hiring needs for a variety of reasons.
- Your business needs to find talent to fill a specific niche. This might happen when your company branches out into a new industry. Let’s say your computer company is looking to start selling its software. An RPO firm could find developers with the skills to design your new software product.
- Your business is expanding. For example, if your retail business is opening a new location in another state, an RPO could find all the workers to staff your new store. This gives you the ability to focus on your current business in the existing location.
- You don’t have adequate hiring proficiency. If your company doesn’t have a dedicated human resources (HR) department with hiring expertise, hiring an end-to-end RPO firm may make sense. An RPO team could even measure metrics like hiring costs and manager satisfaction to optimize your recruiting process.
- You need people to fill positions quickly for a specific period. Let’s say you run a toy store and it’s almost Black Friday. An RPO could help you find workers to handle the extra business you’re likely to get.
While these are some reasons businesses hire RPO firms, this list is not exhaustive. A wide variety of circumstances might motivate a business to enlist the help of an RPO team.
What are the pros and cons of RPO services?
While outsourcing recruitment and selection processes offers an assortment of benefits, this choice may also have a couple of drawbacks. Below, we break down some pros and cons of using RPO.
Pros
- A good RPO firm can forecast whether your business will expand or retract over time. The provider uses these predictions to prepare and scale your workforce for the future.
- An RPO team can give job candidates good experience. If your internal hiring process is lacking and would lead to a negative hiring reputation, this could damage your brand, making future securing of talent difficult. An RPO will help ensure potential hires don’t have anything negative to say about your company.
- RPO firms have the latest HR technology, such as AI sourcing tools and automated marketing systems, which can innovate and streamline your hiring process. They’re also up to date with the newest and most effective communication strategies for dealing with potential hires.
- RPO firms take care of processes like interviewing, training, and marketing so you’re able to prioritize running your business.
- RPO firms specialize in finding, attracting, and vetting potential hires. They’ll likely help you find much more skilled applicants than you would on your own.
- RPO firms also analyze metrics to improve the hiring process. For example, the RPO team might keep track of hiring expenses to make sure your recruitment process is as cost-effective as possible.
Cons
- Because an RPO firm isn’t part of your company, they might not understand your company culture. Take the time to explain your company culture to the RPO firm before they start recruiting. This upfront communication gives them a greater chance of finding skilled workers who have the right personalities to fit in with your team.
- RPO firms know all about hiring, but they might not have expertise in your industry. It might take some time for them to gain the familiarity necessary to find the most qualified hires.
- When you partner with an RPO company, you lose some control over who works for your business. You need to be confident in the RPO’s ability to deliver quality hires. That’s why it’s important to research an RPO team thoroughly before doing business with them.
If you’re looking for a simple solution for finding quality talent, try Upwork’s Talent Scout™ platform. Our recruiters will provide curated lists of skilled workers from across the globe who have the abilities your business needs.
What is the difference between RPO and staffing?
While both staffing companies and RPO firms help businesses find workers, there are several differences between the two.
Staffing agencies compete with other staffing agencies to source talent with specific skills for their clients. After a candidate is found, the staffing agency sends the candidate to the business client. That’s where the staffing agency’s function generally ends.
Staffing agencies usually work on commission and must seek out multiple business clients to sell their services to. Staffing agencies can also choose which positions they believe they will be able to fill. If a position seems too hard to fill, a staffing agent might simply walk away from it and focus on filling other positions.
RPO firms are much more involved in their client’s businesses than staffing companies are. Generally, an RPO recruiter is tasked with meeting the hiring needs of one business. An RPO recruiter is obligated to meet the client’s needs no matter what. RPO companies go beyond simply filling their client’s vacancies. They also provide services like recruitment marketing and training for new hires.
What is the difference between RPO and MSP?
Like an RPO firm, a managed service provider (MSP) may offer end-to-end hiring services. However, an MSP generally fills only temporary positions, such as freelancers and contractors.
MSPs also source workers differently than RPO companies do. MSPs use vendor management systems (VMS) to find skilled workers. A VMS is a cloud-based software tool that allows an MSP to acquire contingent (temporary) talent through a staffing agency. A VMS also has tools for managing and paying contingent workers.
RPO staffing companies use applicant tracking systems (ATS) to find talent. An ATS doesn’t rely on staffing agencies to find talent. It can source workers through avenues like social media, contacts, and a database of skilled candidates.
Find better staffing solutions
You can use a variety of ways to find creative talent for your business. An RPO firm is a great option if you’re looking for a company to take on some or all of your hiring processes. An RPO company takes care of multiple aspects of the recruitment process, giving you the freedom to manage your business.
Another great resource for finding skilled professionals is Talent Scout™. Talent Scout recruiters will help guide you through the process of attracting, vetting, and hiring qualified remote workers from around the world—delivering a curated shortlist of pre-vetted expert talent.
