RPO: The future of recruitment?

In the constant quest for value in the enterprise, outsourcing has become a key tool in driving out inefficiencies in business operations. The basic philosophy being that company’s should concentrate on what they do best i.e. their core competencies because they are the key to attract and retain customers. Everything else that comes under non core competency, should be procured for the best value, whether that means employing someone in house, or engaging a third-party vendor to supply the service.

Recently, recruitment process outsourcing (RPO) has become a hot topic. HR departments are turning to RPO as it effectively helps in cutting down the cost and adding value to the enterprise.

RPO doesn’t deal only with employing a recruitment agency or headhunter to assemble a short-list of candidates for you, it goes way beyond this. The key concept being the RPO provider assumes ownership of the entire process for the business. Thus, RPO provider is not only responsible for on boarding the individuals into the company but will also manage the exit process and even outplacement or redeployment.

Recruitment is a function that is perhaps on the edge of the debate around as to whether it constitutes a ‘core-competency’ for the enterprise or not. After all if people are a company’s number one asset, then it might follow that getting the right people is by definition a core competency.

At first glance, handing over this high level of responsibility for recruitment on the shoulders of RPO provider sounds like a big step. If getting the best talent in is so important to a businesses success, then should this be something that you rely on a third party to do for you?

Ultimately there is no correct answer as to whether RPO is the right path for a business to go down; the answer will depend on particular business circumstances, and the attitude of individual HR departments towards the value they can bring themselves to the process.

As far as RPO is concerned, employing an RPO provider for recruitment should mean that the recruitment process will be quicker, the pool of candidates would be much smaller, of better quality, and well suited to the company, and the recruitment process would mean less administrative burden on the HR department and hiring department, leaving the business free to concentrate on what’s important – deciding who to hire. And if it is true that the quality of your talent can make or break your business, then employing a specialist to ensure you get the best recruits may give you an important competitive advantage over your rivals.

Talking about the benefits of RPO, the major benefit is the reduction in cost. As in any other outsourcing deployment, the RPO provider by definition should be a specialist that is solely focused on recruitment processes. Ideally working with a number of clients, the economies of scale that can be bought to bear by the RPO partner mean that its operations should be cheaper to run than the in house equivalent. Moreover, it should be quicker, and this shortening of the recruitment process saves money. The combination of these factors means that by going down the RPO route, a reasonably sized business should be able to reduce its cost per hire, sometimes significantly.

The other benefit on the cost side is the potential to fundamentally change the recruitment cost structure. RPO gives the opportunity to establish better value for money, as your recruitment costs are truly paying towards your recruitment outcomes. For example, if your hiring patterns are seasonable or cyclical, you can relieve yourself from the burden of paying fixed cost for maintaining a recruitment function in house during these quiet times by taking the route of RPO.