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What is Recruitment Process Outsourcing?

RPO stands for Recruitment Process Outsourcing – where a company outsources the management of the recruitment function (in whole or part) to a third party expert to drive cost, quality, efficiency, service and scalability benefits.

The third party is responsible for placing people into that organisation. When managed well with a quality provider, RPO can reduce time to hire by 40% and deliver cost savings of more than 50%.

How does RPO work?

A quality RPO program embeds dedicated recruiters, technology and best practice processes inside an organisation’s business. Aligned to hiring managers, they lead the end-to-end recruitment process from forecasting to sourcing, assessing, placing, on-boarding and reporting.

Through clearly defined processes and deep specialisation, RPO solutions can dramatically reduce cost per hire, time to hire and attrition, plus measurably improve quality of hire, reporting and scalability, delivering you a far greater return on investment.

What kind of RPO models are there?

The full form of RPO can be used for a single country location within an organisation or multiple countries, a specific business division or a specific role family (e.g. sales).

RPO can also be used for short-term projects when volume recruitment is required, or for building a contingent workforce to ensure you have access to a high quality talent pool for when and however long you need them.

What is the difference between Business Process Outsourcing (BPO) and RPO?

With BPO, a company outsources the management of an internal business function to a third party expert to drive cost, quality, efficiency, service and scalability benefits. The third party is responsible for hiring the people and is also responsible for their ongoing performance and output.

Examples include outsourcing of Help Desk Support, IT Infrastructure Support, IT Applications Development, Accounts Payable/Receivable, Claims Processing.

With RPO, the third party is responsible for placing people into that organisation, but does not manage the performance of the people they place.

What is the difference between Human Resource Outsourcing (HRO) and RPO?

With HRO, a company outsources the management of parts of the Human Resources function to a third-party expert to drive cost, quality, efficiency, service and scalability benefits.

Examples include:

  • Recruitment (referred to as Recruitment Process Outsourcing or RPO)
  • Payroll (referred to as Payroll Outsourcing)
  • Employee Assistance (Referred to as Employee Assistance Program or EAP)
  • Training

As outlined above, RPO is a specific service category within HRO, as opposed to BPO.

The Benefits of Recruitment Process Outsourcing

Reduce cost per hire
Save your organisation money by significantly reducing your average cost per hire, often by more than 50%

Reduce time to hire
Reduce your time to hire by over 40%, dramatically reducing your organization's lost productivity around open vacancies.

Reduce suppliers
Tailor your recruitment panel to supplement hiring, helping your drive quality, efficiency and cost reduction.

Increase sourcing channels
Many clients are in a niche sector and need scarce skill sets. Looking at new sourcing channels previously untapped to unlock additional candidates is one of many benefits of outsourcing recruitment.

Improve quality of hire to deliver talent that delivers more, for longer
Studies continually show that quality hires improve productivity for organisations. Embedded in your business, our RPO programs can provide world-class assessment and training.

Improve scalability to be responsive to your organisation’s changing needs
Flex headcount up and down as you need, ensuing you are not burdened with unnecessary costs when hiring volumes fall and can respond fast when they rise.

Improve metrics to help your organisation continually learn
An RPO helps you select and implement an effective applicant tracking system (ATS), improving measurement and reporting so your organization can continually improve.

Additional Resources

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Hudson RPO

Hudson RPO (recruitment process outsourcing) manages the people, process and technology associated with recruitment on a full service (outsourced), hybrid (co-sourced) or project basis. A global force in talent acquisition solutions, Hudson RPO designs, implements and manages custom RPO programs for mid- to large-cap, multi-national companies.