Everything you need about RPO: benefits, what to expect, and how to decide between outsourcing and an in-house solution.
What’s RPO?
The answer is evolving every day. As technology evolves and the idea of employment expands, so does the definition of an RPO. In this post, we will outline the new world of RPO, how it can work for your organization and the exciting ways in which automation and AI are changing the recruitment and hiring game forever.
But first:
Let’s Define RPO
RPO is an acronym that stands for Recruitment Process Outsourcing. At its most basic, RPO is any part of the hiring process that is outsourced by a company to a different company. They are services performed by a third party – and that third party is referred to as “an RPO.”
This is distinct from business process outsourcing (BPO). BPO is the outsourcing of business functions, such as supply chain management.
Does your company subcontract customer care work to a call center? That’s BPO.
Do you utilize a service like Amazon Mechanical Turk? Also BPO.
Do you have a company that’s been contracted to help you hire overseas, and smooth the process of immigration? That’s an RPO.
One quick way to think about RPOs versus BPOs is that if it has to do with recruitment and onboarding, it’s an RPO.
Why an RPO
Recruitment process outsourcing has changed drastically over the past decade to include candidate sourcing, recruiting automation, and so much more. The frontline labor market in particular is incredibly tight; demand for talent is fierce. The more intelligent companies are about how to deploy their in-house Talent Acquisition team versus an RPO, the more likely they are to succeed in an intensely competitive field.
Choosing the correct RPO can cut hiring costs and reduce time-to-hire, thereby increasing the time an in-house team has to spend on higher level functions that move the needle for your business.
Note that RPO is rarely a 1:1 replacement for talent acquisition teams. Rather, it’s a tool that TA teams can leverage to more efficiently deploy their efforts while handing off high burden, low-value parts of the process to a third-party expert. Using an RPO or partner can allow for this automation without the capital expenditure of an entire system (it is baked into the cost of the platform).
Reasons to Use an RPO
Now that you know broadly what an RPO is, let’s dive more deeply into reasons why a company might use one.
Depending on size, age, and field, organizations can contract an RPO for any number of reasons; there are truly countless use cases.
Lean start-ups might find that utilizing an RPO is initially more cost-effective and efficient than hiring an entire TA team. Perhaps a company is experiencing a seasonal hiring boom and needs high volume recruitment support, or has concerns about their ability to handle I-9 compliance.
The reasons for contracting an RPO are as varied as companies themselves but tend to fall into 4 buckets:
Scalability: As in the above start-up example, it can be more cost and time effective for a TA team to work with an RPO than it is to staff up internally. Plus, a good RPO should not only include reliable services but also the institutional knowledge and support of an org focused solely on sourcing, hiring and onboarding. For many companies, even ones with a seasoned TA team, that additional expertise is invaluable.
Scalability is a massive catch-all and can contain many common use cases for an organization to contract an RPO. Here are some common examples:
- Entering a new market and/or country. An RPO’s expertise around compliance, labor law and other regional considerations can be incredibly helpful and far more efficient than onboarding a full local team to handle these issues.
- Seasonal hiring: Businesses with seasonal hiring fluctuations face costly onboarding and offboarding. An RPO can effortlessly absorb these increases in recruitment needs, screens, and hiring paperwork.
- Acquisitions, new service offerings and expansions: Absorbing new divisions and launching new products are positive, exciting moments! They also invariably mean a hiring crunch–and sometimes for functions that are entirely unknown to the in-house team. An RPO can fill the bandwidth and knowledge gaps that accompany a growth spurt.
Cost savings: This can be closely tied to scalability, but often an RPO can save a company significant amounts of money – and not just as a replacement for internal headcount. An RPO also slashes many harder-to-quantify costs.
An effective RPO should come equipped with AI and automation that reduces time-to-hire. That translates to efficiency gains across the board. Especially in frontline and high volume hiring, an RPO should also reduce interview no-shows and therefore hand valuable time back to your teams.
Soft savings like these translate to dollars and time saved, which can exponentially impact a company’s bottom line. An effective RPO should also catch costly compliance issues which, if left unchecked, can be massive time and cash drains.
Improved recruitment metrics: Robust, modern RPOs should also deliver hiring metrics that can inform your recruiting and hiring practices across the board. Impartial, third-party insight into these areas is invaluable and can be difficult to replicate internally.
Types of RPO Models
There are three basic ways to work with an RPO:
Full: This model entails outsourcing large segments of your full-time recruitment process, from candidate sourcing to hiring and beyond into employee retention.
Hybrid: The most common model, hybrid RPO usage refers to outsourcing pieces of the recruiting process such as I-9 compliance or candidate sourcing, while maintaining other pieces in-house.
Project: Applicable to seasonal hiring or a specific, one-time (or recurring but infrequent) use case.
The Role and Responsibilities of RPO
There are many tasks an RPO can perform. Here are a few of the most common:
Sourcing: Candidate sourcing is the process of identifying, attracting, and engaging potential candidates for a job. Candidate sourcing requires proactivity to uncover the most qualified candidates, and a solid candidate sourcing strategy helps businesses develop a steady stream of high quality applicants. This is your top-of-funnel in the hiring process and is a perfect place to leverage AI. Applicants are often applying to many roles at once and simple automation in the sourcing process can help sort serious, qualified candidates from those who are a less than ideal fit.
Screening: This is the sifting-through-applications part of the process. Luckily, the sifting can now be largely automated. RPO software and human experts combined can deliver a more qualified candidate pool to the interview stage of hiring.
Interviews: Outsourcing interviews can be an incredibly powerful timesaver for volume and frontline hiring as well as startups or other companies hiring for technical functions that don’t currently exist in-house. These can take a number of forms including in-person and mass phone screens when appropriate.
A robust RPO should also have automated processes for managing the scheduling of interviews with internal teams. In other words, you can outsource the management of the interview process while keeping the actual screening with in-house teams.
An RPO can play as large or minimal a role in the interview process as a TA team needs. Almost always, the final hiring decisions rest with the in-house team.
Onboarding: Onboarding new employees is a time intensive process which typically involves a high volume of sensitive paperwork. It’s also a part of the hiring process where compliance issues can arise. An RPO can handle all these things quickly, thoroughly, and at scale. RPOs can even make the hiring process more attractive to prospective employees insofar that HR has more time to actually get to know a potential new hire. In short, everybody wins.
The Benefits of Fountain’s In-House Model
Fountain’s take on the RPO reduces low-value tasks for our customers while freeing up time and resources for an in-house TA team to tackle high-value initiatives. We recognize that one size definitely doesn’t fit all, so we’re designed to meet our customers exactly where they are.
Some of Fountain’s offerings include:
- AI Screening: Our AI Sourcing Tool can automatically screen candidates based on their skills and certifications
- Interview scheduling: Whether they remain in-house or outsourced, Fountain manages the scheduling of interviews and accompanying reminders. This includes phone and/or video interviews as well as in-person interviews and hiring events. However you choose to meet your top candidates, automated scheduling eliminates a massive, low-value task from your TA team.
- Full, custom analytics suite: The insights gained from our analytics suite will not only help you track the current task at hand but inform future hiring practices across the board. See what tactics result in a reduction of time-to-hire and interview no-shows. Our best-in-class support team will help you interpret and apply the learnings we uncover across your future effort
- Dedicated I-9 Center: Fountain’s I-9 center automatically tracks progress and errors in real-time, reducing a massive source of compliance burden and the increasing fines that go along with those errors. We know it’s critical to move from “hired” to Day 1 as seamlessly and flawlessly as possible
Most importantly, Fountain’s flexibility allows your company to retain the pieces of the TA function that make sense for your needs. And when those needs change due to seasonal hiring influxes, expansions, or sinking metrics, Fountain has you covered.
If you’re curious to see how Fountain’s in-house, outsourced model can work with your team, reach out to us here.
And if you want to read more, we get it! Check out our ultimate guide to high volume hiring for the right strategies to attract top-caliber talent and boost business growth.
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