Recruitment Process Outsourcing (RPO) – Benefits, Pros & Cons

Recruitment process outsourcing, or just RPO, has been on the rise during the past decade. Many recruiters and agencies are offering RPO services, and many companies are well aware of the pros and cons of using them.

The fact that the number of recruiters doing RPO is skyrocketing has dark sides to it too. This means that many self-proclaimed RPO recruiters are just staffing providers, and this can create havoc for companies.

Many businesses are new to recruiting as a whole, and their best shot is outsourcing it for numerous reasons, whether it be cutting down on recruitment costs or the lack of experience.

For that reason, it is essential to be familiar with what exactly recruitment process outsourcing stands for and what you should look for in a good RPO provider. The same goes for recruiters that wish to start doing RPO.

And this post will help you with that.

Here, we will go over:

1. What is recruitment process outsourcing (RPO)
2. Benefits of recruitment process outsourcing
3. The difference between RPO and traditional staffing agencies
4. How much does RPO cost?
5. Different types of RPO
6. Technology in RPO

What is recruitment process outsourcing (RPO)?

Recruitment process outsourcing is when a business outsources its recruitment processes or parts of them to the external provider.

RPO is there not only to source candidates for you, but they also work on improving and automating the recruitment processes of the company. For recruitment process outsourcing, the job isn’t done when a candidate is hired and successfully onboarded.

They look at the company as a whole, analyze its business model, potential, scalability, look for weaknesses and opportunities, do consultations, and create sustainable and effective recruitment processes.

Nowadays, most companies use RPO to help them with resume reformatting services. They simply want to have all resumes formatted in the same template to fit the company’s or, industry standards.

This process is dull and very time-consuming when done manually. It takes around 30 minutes for a recruiter to reformat a resume. However, hiring an RPO for this is a waste of money.

There are recruiting tools that can reformat hundreds of resumes in just a few seconds for less than a hundred bucks.

One of the best is iReformat, a resume management tool that is widely used by thousands of recruiters.

iReformat saves time, money and allows instant formatting instead of waiting for a couple of hours to send the resume offshore to get it formatted.

Furthermore, iReformat is more consistent since it is automated.

You can use iReformat anywhere, and test it out for free during a 15-day free trial, no credit card required.

Benefits of recruitment process outsourcing

As you could assume, there are many benefits of recruitment process outsourcing, like:

1. Lower recruitment costs,
2. Consistent recruitment and hiring
3. Better candidate quality
4. Stronger employer brand

Lower recruitment costs

Many companies, especially startups, are inexperienced when it comes to recruiting. They don’t know the best place for them to post job openings, how to headhunt talent, which recruitment software to use, etc.

They may not even know how to hire a decent recruiter too!

One by one, costs start compiling, and being honest, it is not hard to waste loads of money on recruitment marketing, staffing agencies, and job boards.

That’s why hiring an RPO provider pays off.

They already know what could be the best thing for you to do, and they will create recruitment processes and strategies instead of you. That way, you can rest assured that everything will be taken care of and that you won’t encounter the same problems every time you wish to hire a new employee.

Enhanced candidate experience

To provide a good candidate experience, you need to be responsive, quick, and patient.

Candidates don’t like to be kept on hold and wondering; thus, you must inform them of every step and process and continually give them feedback. You also need to word the negative feedback positively and constructively.

And all of that requires time, experience, and expertise.

When you have an RPO provider handling your recruitment, you can rest assured that the candidate experience will be far better than it usually is when handled by the in-house HR team or staffing agency.

Additional read: What is VTO

Better candidate quality

When a team of experts handles your whole recruitment process, it is not unusual that the candidate quality will be significantly better. Therefore, you will get more suitable candidates at a lower cost per hire than you would with the in-house team.

Stronger employer brand

Employer brand is an aspect that many businesses often overlook. However, when you have high-quality satisfied employees, then your employer brand grows.

Better candidate experience, better employee profile, and better work culture all play a significant role in building a strong, positive employer brand.

The difference between RPO and traditional staffing agencies

Staffing and recruiting agencies simply do candidate sourcing and placement for given roles, and that is where their job ends.

On the other hand, recruitment process outsourcing agencies take care of the whole recruitment process, including:

1. Employer branding
2. Candidate engagement
3. Candidate experience
4. Candidate screening
5. Pre-employment assessments
6. Graduate recruitment
7. Risk management
8. Recruitment analytics and reporting
9. Workforce planning
10. Sustainable recruiting
11. Turnover rates, etc.

How much does RPO cost?

There isn’t a certain cost range for recruitment process outsourcing services.

The cost will depend on specific hiring needs a business has and the RPO provider itself.

However, there are specific price models often used in RPO, for example:

1. Cost per hire – This is used primarily for short-term RPO projects, and the business pays for every employee the RPO provider brings.
2. Cost per slate – Here, the RPO provider charges per set of sourced, screened, and qualified candidates they bring to the client.
3. Cost per transaction – This pricing model means that you will be charged for a specific process that the RPO does, like interviewing candidates, for example.
4. Management fee – In this pricing model, a client is paying a monthly fee to the RPO provider that they have agreed on.
5. Management fee plus costs per hire – Here, you are paying the RPO provider for the consistent hiring efforts they perform monthly, plus for every employee they bring to you.

Different types of RPO

There are three different types of RPO:

1. Full RPO – The RPO provider handles the entire recruiting for the client. Meaning, the client outsourced all of their hiring processes to the RPO.
2. On-demand RPO – The company outsources specific processes to the RPO periodically.
3. Function-based RPO – The RPO completely handles one part of the company’s recruitment needs. For example, they employ just for one sector of the company, like the whole marketing team, the whole R&D sector, etc.

The use of technology in RPO

Whether you are a company looking to get more informed about RPO or an aspiring recruiter wanting to start their own RPO business, knowing which recruitment software to use is a must.

Recruitieze specializes in creating software for all types of recruiting agencies. Our software is designed to meet the needs of a recruiter who is constantly searching for new talents.

Here’s a list of things that well-designed recruitment software can help you with if you are an RPO:

1. Career page management and customization
2. Candidate management
3. Managing other recruiters, hiring managers, clients, and vendors
4. Email automation
5. Interview scheduling
6. Job broadcasting
7. Applicant tracking
8. Resume sourcing, parsing, reformatting, and storing
9. And much more inside the Recruiteze recruiting software.

We believe that simply listing the features of the software is futile, and you won’t know if it really is the right fit unless you try it yourself.

That is why we offer a 15-day free trial both for our recruitment software and resume management software.

Test Recruiteze recruiting software for free.

Test iReformat, the best resume management software for free.