Recruitment Process Outsourcing is a form of business process outsourcing (BPO) where an employer outsources or transfers all or part of its recruitment activities to an external service provider.
James Caan (formerly of Dragons' Den) brought RPO to the UK in the 1990s. As the Chairman of HB Retinue his business continues to provide RPO services to clients across all sectors. http://www.hbretinue.com
The Recruitment Process Outsourcing Association defines RPO as follows: "when a provider acts as a company's internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through the onboarding of the new hire, including staff, technology, method and reporting. A properly managed RPO will improve a company's time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance."[1]
The RPO Alliance, a group of the Human Resources Outsourcing Association (HROA), approved this definition in February 2009: "Recruitment Process Outsourcing (RPO) is a form of business process outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external service provider. An RPO provider can provide its own or may assume the company's staff, technology, methodologies and reporting. In all cases, RPO differs greatly from providers such as staffing companies and contingent/retained search providers in that it assumes ownership of the design and management of the recruitment process and the responsibility of results."[2]
Occasional recruitment support, for example temporary, contingency and executive search services is more analogous to out-tasking, co-sourcing or just sourcing. In this example, the service provider is "a" source for certain types of recruitment activity.[3] The biggest distinction between RPO and other types of staffing is Process. In RPO, the service provider assumes ownership of the process, while in other types of staffing the service provider is part of a process controlled by the organization buying their services.
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While temporary, contingency and executive search firms have provided staffing services for many decades, the concept of an employer outsourcing the management and ownership of part or all of their recruiting process was not first realized on a consistent basis until the 1970s, in Silicon Valley's highly competitive high-tech labor market. Fast-growing high-tech companies were hard-pressed to locate and hire the technical specialists they required, and so had little choice but to pay large fees to highly specialized external recruiters in order to staff their projects. Over time, companies began to examine how they might reduce the growing expenses of recruitment fees while still hiring hard-to-find technical specialists. Toward this end, companies began to examine the various steps in the recruiting process with an eye toward outsourcing only those portions that they had the greatest difficulty with and that added the greatest value to them. Initial RPO programs typically consisted of companies purchasing lists of potential candidates from RPO vendors. This "search/research" function, as it was called, generated names of competitors' employees for a company and served to augment the pool of potential candidates from which that company could hire.
Over time, as business in general embraced the concept of outsourcing more and more, RPO gained favor among Human Resource management: not only did RPO reduce overhead costs from their budgets, but it also helped improve the company's competitive advantage in the labor market. As labor markets became more and more competitive, RPO became more of an acceptable option. Furthermore, through the advent in the 1980s and 1990s of human resources outsourcing (HRO) companies that began taking on the processes associated with benefits, taxes and payroll, companies began recognizing that recruiting—a significant cost of HR—should also be considered for outsourcing. In the early 2000s, more companies began considering the outsourcing of recruitment for major portions of their recruiting need.
There have been fundamental changes in the US labor market that serve to reinforce the use of RPO as well. The labor market has become increasingly dynamic: workers today change employers more often than in previous generations. De-regulated labor markets have also created a shift towards contract and part-time labor and shorter work tenures. These trends increase recruitment activity and may encourage the use of RPO. It should also be noted that even in slower economic times or higher unemployment, RPO is still considered by companies to assist in an increasing need to screen through a larger candidate pool.
Its also speculated that Prosquare LLC, a Nevada based recruitment company, first started a recruitment process in their facility in Bangalore in early 2006. Mr. Hemant Nair their global sales manager signed a monthly contract with American based recruitment group 4T technologies and called it RPO (Rhiming with the then famous BPO).
RPO's promoters claim that the solution offers improvement in quality, cost, service and speed.
Organizations with efficient hiring process that are viewed as employers of choice by potential staff may stand to gain benefits from an RPO process.
RPO can only succeed in the context of a well-defined corporate and staffing strategy. As with any program, a company must manage its RPO activities, providing initial direction and continued monitoring to assure the desired results.