Recruitment Process Outsourcing (RPO) Factor or Fad?

By: Bob Cohen and Sam Sacco
Date: 2/1/2008

According to Wikipedia, the free encyclopedia, Recruitment Process Outsourcing (RPO) is a form of business process outsourcing (BPO) when an employer outsources or transfers all or part of the recruiting process to an external service provider.

A true or total RPO solution involves the outsourcing of the entire recruiting function or process to an external service provider. This provider serves to provide the necessary skills, tools, technologies, and activities to serve as their client's virtual "recruiting department" in some cases and in others the customer is engaging the RPO service provider to handle specific parts of the hiring cycle. Therefore true RPO involves a comprehensive transfer (outsourcing) of all recruiting activities and processes to a third party provider.

RPO can be utilized to address all ongoing recruiting needs or it can be event or project driven such as to gear up to open new a facility or to open a new division to launch a new product line. RPO engagements are often tailored to provide a group of selected services offered by the provider to match each customer's specific needs. The list of services is like a menu, creating a cafeteria approach to meet the outcomes desired by the customer for that assignment.

However RPO is not Executive Search nor is it Staffing, market place confusion has caused some colossal failures in the formative years of RPO. It seems that both corporate customers and the sellers of these services underestimated the complexity of achieving successful RPO execution.

RPO may involve: Recruitment planning, sourcing; screening; testing; interviewing; background checks and drug testing; hiring; coordinating the offer letter; on- boarding; maintaining applicant tracking logs, requisition, and candidate files; reporting; and training. Full-service (true) RPO runs the gamut-from finding the candidate to hiring a new employee and almost everything in between. This definition differs from occasional recruiting support often provided by many temporary/contingency staffing firms and executive search firms and often also differs from Contract Project Recruiters. While these organizations do provide an invaluable service, they do not qualify as an RPO as it does not involve the outsourcing of the recruiting process.

An RPO solution may involve outsourcing certain steps in the recruitment process that can be more efficiently handled by an outside, specialist provider. Many Search and Staffing firms have always performed a portion of the services offered by a true RPO provider and this has added to some of the marketplace confusion. Part of the challenge of understanding RPO is that it is often defined in various ways by its providers. Until RPO practitioners clearly define what it is and what it isn't RPO, the above definition is a good starting point.

True RPO services can vary from assignment to assignment with each RPO contract having its own nuances. An RPO provider that does a great job on an IT assignment may not be able to handle call center hiring or hiring a large sales team.

There are organizations that offer some of the services offered by true RPO providers, such as:

A) Large Consulting firms may have an area of their Human Resource Outsourcing business that handles some RPO functions;

B) Staffing/Search and Contract Project Recruiter firms that provide recruiting functions sometimes with add-on services;

C) Firms that process any number of the administrative tasks, such as: Sourcing; screening; testing; interviewing; background checks and drug testing; hiring; coordinating the offer letter; on- boarding; maintaining applicant tracking logs, requisition, and candidate files; reporting; orientation and training.

D) Some more sophisticated firms offer Recruitment Planning, Needs Assessment and Training in these areas;

E) True RPO providers that combine recruitment talent and expertise with Business Processing expertise to take ownership of the recruitment function for their customer.

Many mature Staffing and Search firms have been attracted to the RPO model as a way to protect their strong customer base and to provide those customers with higher margin services.

This article is continued at www.rssmonline.com.

For more information, contact Bob Cohen at 416-229-6462 or Sam Sacco at 910-509-0691.

We can also be reached at bob@racohenconsulting.com or sam@racohenconsulting.com. Sam and Bob have successfully completed over 100 staffing industry transactions.

There are many more articles on our website at: www.racohenconsulting.com