What is Recruitment Process Outsourcing and How Does It Work? A Complete Guide

recruitment process outsourcing

Finding and keeping excellent remote employees is one of the biggest assets to any business. Don’t believe it?

According to a recent Center for American Progress (CAP) study, employee turnover is a huge expense. The study found the average costs to replace an employee are as follows:

  • 16% of the annual salary for high-turnover, low-paying jobs (earning under $30,000 a year).
  • 20% of the annual salary for midrange positions (earning $30,000 to $50,000 a year).
  • Up to 213% of the annual salary for highly educated executive positions. For example, the cost to replace a $100k CEO is $213,000.

This means if you’re continually in need of replacing employees, it can cost your business anywhere from 16% TO 213% of an employees annual salary every single time.

With these stats in mind, it’s worth it to hire someone to help you with recruiting. A recruitment organization possesses the skills, knowledge, and ability to find exactly the type of loyal employees you are looking for.

This post will examine the ins and outs of what an RPO is, how they work, what services they offer, top RPO companies, and how much it costs. At the end of this post, you’ll be well equipped to hire a recruiting company to help you fill your hard-to-fill positions.

 

What is an RPO?

RPO stands for Recruitment Process Outsourcing and it’s where an employer hires an external service provider to handle all recruiting efforts.

An RPO will typically handle all of the company’s staff, methodologies, and reporting. As such, they assume ownership of the recruitment process and take responsibility for the results.

This means an RPO is more of a partner than a recruiting firm because they hold a greater stake in producing results for you.When you have a good RPO relationship, it can greatly enhance the effectiveness of your recruiting efforts.

When you improve your recruiting techniques, you make sure you get the right people in the right jobs and increase the changes that they will remain loyal to your company. When you have the tools to hire the right people it decreases the chances that you’ll have high turnover rates.

In short, an RPO will help make sure your employees have the skills needed to fulfill job requirements and that everyone in the company is better positioned for success.

 

How Does An RPO Work?

Anyone working as a hiring manager for a company, whether they are hiring remote employees or employees to work inhouse, knows that recruiting can be difficult.

There are many challenges including finding qualified candidates, finding someone that matches the culture of your company, finding someone that gels well with management and team members, and hiring an employee that will remain loyal to your brand.

There are several options to overcome these challenges including hiring a recruitment agency.

A recruiting agency will definitely have skills to help you locate good employees, but sometimes their tactics simply include putting out several feelers and hoping something sticks. While this may help you fill an empty position, it won’t help you necessarily find the right employee.

recruitment

This is where how an RPO works will come in handy for your company.

Recruitment process outsourcing is more than just finding bodies to fill open jobs. They work to improve an organization’s recruiting process overall. They delve in deep to find people that actually fit the position you are looking for to a T.

Additionally, there is an added element of motivation for them to find the right person because they partner with your firm. This brings them into the relationship as stakeholders and the success of employees are in their best interest.

RPOs work by approaching recruiting, not as temporary staffing, but as a way to improve the recruiting process of your firm as a whole. A good RPO will handle all employment needs, implement a monitoring system, and measure results.

Additionally, an RPO works by building a long-term relationship.

Yes, an RPO will fill positions, like a traditional recruiter would, but they will also look at turnover rates, scalability, and time frames for filling positions. They do this to improve recruiting methods, cut on costs, and help you develop a dream team faster.

When you hire an RPO, the process will be as follows.

First, they will create the requisition. Then, they will meet with the hiring manager and create the perfect job listing. Once they have done this, they will build a recruiting strategy, post the listing, begin sourcing, screen resumes, and communicate to de-select candidates.

Then, you can expect phone screen interviews and another round of de-selecting candidates. Once candidates have been refined, the RPO will present a list of contenders to the hiring manager.

Then, they will coordinate interviews with the candidate and hiring manager. They won’t leave your hiring manager hanging. They will prep them with exceptional interview questions and evaluation methods to help further weed out candidates.

Then, they will have a post-interview debrief with the hiring manager to select a final candidate.

The process doesn’t end yet, however. An RPO will also administer skills assessments, conduct background and reference checks, offer negotiations and acceptance, put in a recommended start date, and then onboarding will begin.

The RPO will survey the hiring manager to collect feedback about hiring satisfaction, present results, and have quarterly reviews of data to increase the hiring efficiencies.

It’s a process, but one that will help you get more from your recruiting service.

 

What Services Does an RPO Offer?

As mentioned earlier, the services an RPO offers doesn’t start and end with simply filling positions. Their approach is to help improve your recruiting methods over all.

As such, here are some things you can expect from an RPO.

Full Help With Hiring

As mentioned above, an RPO will help your hiring manager with everything from drafting the right job listing to evaluating the whole process and everything in between. You can count on professional recruiting services and that you’ll get someone in the door that you, your hiring manager, and your RPO approves of.

Technology

An RPO won’t rely on old-school methods to find candidates. Instead, they will use a technology that integrates with other top tools for sourcing candidates. This will help you reach a wider range of qualified candidates.

Reporting

An RPO will also offer real-time portals and dashboards to clients to view progress. This will help you improve the hiring process over time.

Consulting

If you need extra help, many RPO firms will offer consulting services. They will help you evaluate your current hiring methods and offer smart suggestions for improvements.

 

When To Hire An RPO

Now that you know what an RPO does, how they work, and what services they offer, you may be wondering if you really need this service. In other words, when should you hire an RPO vs. just handling hiring yourself.

meeting with hiring manager

Here are some ways you can tell you would benefit from an RPO.

1. You are inexperienced.

If you are a new firm and you have a hiring manager that is well-intentioned but needs a little guidance, an RPO is a great way to go. They can come in with their consulting services and fix any leaky holes in the bucket. This will help skill up your hiring manager to take things forward alone in the future.

2. You need excellent employees.

If you just need someone somewhat reliable to do data entry, then you may not need an RPO. However, if who you hire is key to the success of your business, then bring in the professionals.

An RPO will not only help you find excellent employees at the beginning, but they will strengthen the process of hiring so that you continue to find top-notch employees to work at your organization.

3. HR lacks bandwidth.

If your HR team is stretched thin with responsibilities that you find they are just hiring anyone who walks in the door, you know it’s time to hire an RPO for help. An RPO can take over all important elements of proper recruiting, and your HR team can focus on other important HR tasks.

4. You need more team members.

RPOs can actually come in and act as an extension of your team if you need it. That way, you can put the accountability of hiring onto your RPO partner instead of on your hiring manager.

5. You need metrics.

If you want strong metrics on whether or not hiring has been successful, hire an RPO. They will provide you data on how things were before you hired an RPO and after. This will help you understand the value of your investment.

If after reviewing this list, you notice you are in need of extra help, then hire an RPO. You won’t regret it.

 

How Much Does An RPO Cost?

One of the biggest questions companies have is how much does it cost to hire an RPO?

The first answer is it depends. Different firms charge different amounts and what you pay will end up how much work you require of your RPO and how close of a partnership you have with your selected RPO company.

The real question is how much does it cost not to have an RPO?

Yes, hiring an RPO will be a large investment, but if you look back to the intro of this article, you can see how much it costs your firm to replace employees.

If you don’t have a strong recruiting strategy and experience high turnover rates, especially for more important roles, it can end up costing your firm much more than it would to hire an RPO.

Not to mention, if you don’t fix your recruiting practices you’ll continue to lose out on finding the best employees and loyal employees.

 

RPO Companies

There are several different RPO companies on the market. Here is a quick review of some of the top RPO companies that may be of interest to you.

Who you end up selecting will depend on your preferences and company needs. Keep in mind, these are just a few suggestions. There are hundreds of qualified RPO companies on the market and many of them do a great job.

You may want to contact a few different companies, conduct an additional Google search, determine what services are of most importance to you, and then weigh all your options before making a selection.

HireVelocity

hirevelocity

HireVelocity is an RPO company that is focused on providing results. They offer:

  • Targeted, scalable recruitment methodologies
  • Time sensitive processes
  • Improved quality of hire and retention
  • Leading edge technology
  • Flexible on-site, off-site, or virtual delivery
  • End-to-end or partial process management
  • Multi-channel sourcing strategies
  • High quality talent pipeline for future hires
  • And more!

GLOCAL

glocal

Glocal is a leading Offshore Recruitment Process Outsourcing (ORPO) firm. They promise:

  • To act as a dedicated extension of your team
  • No setting-up or infrastructure hassles
  • Boosted ROI due to reduced costs
  • Hiring locally around the globe
  • No training or monitoring worries
  • Results from day one
  • And more!

KPRO

krpo

KPRO is a full-time dedicated recruiter that serves several staffing companies. They offer:

  • Up to 75% in cost savings
  • 120+ recruiters
  • English Speaking Recruiters
  • Excellent Turnaround Time
  • Various Job Boards Included
  • Resume Screening
  • Round the clock Sourcing
  • And more!

Trupp

trupp

Trupp works to help you with HR tasks, so you don’t have to. They provide:

  • Employee Lifecycle Management
  • Regulatory Compliance
  • Training & Development
  • Employee Engagement & Retention
  • Benefits Administration
  • Payroll Administration
  • And more!

Again, there are several RPO companies on the market and many of them will do a great job with helping you find the right candidate. After you have vetted a few companies, you can select one and try out their services.

Whatever steps you are making towards better hiring practices will serve your company well in the long run.

 

Wrap Up

If you are struggling with hiring the right candidates at an acceptable pace, then an RPO may be a good option for you. Not only will they help you hire the right people, but they will make sure your hiring practices make sense and are working in your favor.

If you are worried about your hiring practices, contact an RPO for additional guidance and consulting.

Greg Digneo

Greg Digneo

Greg Digneo writes for TimeDoctor.com, a time monitoring and productivity monitoring software designed for tracking hours and productivity of remote teams. If you would like to see where you and your team are spending your time during work, then try Time Doctor FREE for 14 days.

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