Recruiting top talent can be challenging when there is insufficient experience or knowledge of the market. The solution over the years was to create a long-term answer to the transfer of privilege of all or parts of an employer’s recruitment strategy to a third-party professional.
This interaction model permits organizations to scale resources as petitions fluctuate to fulfill hiring needs without expanding budgets to pay for in-house recruiters or recruitment agents. It is commonly known today as RPO.
RPO is an acronym for recruitment process outsourcing. The process is a recruitment business model where businesses outsource the management of employee recruitment to a third-party specialist. The benefit to the company is it drives down costs, increasing quality, efficiency, and scalability.
The third-party RPO vendor’s responsibility is to source, attract, and compel talent into that association. When affiliating with a top-notch provider, RPO can convert talent asset metrics and provide formidable outcomes for the recruitment process. Engaging an RPO can support the reduction in time to employ top talent by 40 percent and provide cost savings.
The History of Resource Process Outsourcing (RPO)
It was diversifying, which allowed companies to safeguard profits, even though growth demanded numerous layers of administration. Subsequently, associations trying to compete globally in the 1970s and 1980s saw a disadvantage because of their absence of agility resulting from excessive management configurations.
Multiple extensive companies devised a new strategy of concentrating on their core business to expand their flexibility and originality, which mandated recognizing critical processes and determining how to outsource them.
Initial Stages of Evolution
The formal identification of outsourcing as a business strategy occurred in 1989. However, most organizations needed to be more self-sufficient. Successful businesses outsourced those roles for which they maintained no internal competency.
The usefulness of external suppliers for these vital but ancillary services might be the baseline stage in outsourcing. The next step is outsourcing support services.
In the 1990s, as businesses began to concentrate more on cost-saving actions, they initiated outsourcing the necessary procedures externally to run a company. However, these processes were not explicitly related to the core business.
The present scene in outsourcing development is the story of strategic alliances. Until recently, businesses were reluctant to outsource core competencies. These provided functions gave companies a strategic advantage over their competition.
The definition of core competency is any process that brings the company closer to its patrons.
In the 1990s, outsourcing core functions became a reasonable strategy, not an aversion. Therefore organizations began to outsource customer service precisely because it is essential.
Today’s focus is less on ownership and developing strategic partnerships to achieve enhanced results. Consequently, organizations are likely to select outsourcing based on who can provide more effective outcomes for a distinct role than on whether the operation is core or commodity.
What is Traditional Recruiting?
Traditional Recruitment process and selection is a term to define the process when people apply for jobs using conventional paper applications and resumes.
Therefore, this is in contrast to the digital-only world of today, where job applications and resumes are online. The job application method is traditional recruitment.
This job application method utilization typically occurs by large companies and organizations with the time, space, and human resources to conduct traditional recruitment and selection.
Traditional Recruiting vs RPO
The differences of how recruitment occurs might be unnoticed by some. However, it is the fine details that will define how you find your prospects. Ultimately you want to see and have access to these candidates with the top skills as quickly with as little cost as possible.
Therefore, it is necessary to know how traditional recruiting differs from RPO as you proceed forward with your recruitment of prospects to truly understand the benefits and how this subtle change can make a huge impact in your company.
What Exactly is Recruitment Process Outsourcing
RPO or Recruitment Process Outsourcing is the movement of your business processes to exterior partnerships. Here, the employer delivers all or a portion of their hiring approach responsibility to an external recruitment agency.
The identification of these types of agencies is known as RPO Partners. RPO partners provide their recruitment expertise per the company’s requirements to staff their employment and technological needs.
These requirements are not only to the tangible assets but also data associated with reporting and methodologies for the establishment. These tools assume a position that is much more than just finding the right prospect and quickly serving up the place.
Unlike any unanticipated delegation search provider or recruitment agency, the RPO partner assumes full responsibility for the complete cycle. Right from conceptualizing and preparing to managing and executing the recruitment strategies. Further, they are accountable for the outcomes of the operations.
The RPO partner delivers a reliable recruitment team that focuses on crucial recruitment areas such as:
- Finding the correct culture for candidates
- Reducing costs on premium labor
- Employee retention improvement
Therefore, an RPO partner is the exclusive recruiting associate of the employer. The RPO partner is responsible for all the recruiting actions, from conceptualization to the end outcome. They also supply expert discernment in forming a perfect recruitment strategy for the business.
The overall functioning provides many other significant distinctions between RPO and traditional recruitment. Let us examine them in full detail.
Making placement vs. Best Fit
Traditional recruitment agents gauge their success with how many employees they can provide the employer. They perform this goal with the service of the prospects they source and assess the employer once the candidate gets successfully employed by the establishment.
Thus, such agencies dissuade employers from constructing employee referral plans or other direct recruiting methods. These programs will decrease their revenue.
In contrast, the RPO partner encourages sourcing prospects through all pipelines. Their immediate purpose is to discover the most suitable candidate to serve the position. RPO partners choose to supply a long-term answer to the company’s recruitment endeavors. They source applicants through their specific networks, online job portals, employer websites, and employee referral systems.
The RPO partner opens up multiple avenues this way to source candidates. Therefore they make the recruitment process result oriented and more efficient. The RPO partner supports the recruiting effort and helps discover the best applicant fit from the available resources. Thus, they also help develop a positive employer brand.
Ownership of the Candidate
As recruiting agents acquire compensation for every recruitment they accomplish, they hope to “own” every nominee they have contributed to the employer permanently! Therefore, this indicates that an employer can only return to the candidate pool afterward, when the condition arises again, and employ an applicant introduced previously by the agency with paying the agency for the recruitment. Therefore, this is predominantly a concern once the recruitment agreement has passed. This ownership fiasco problematizes the approach of hiring businesses.
RPO partners believe that employers possess the end responsibility of retention, even if the RPO partner has sourced the leads. Therefore, this facilitates the recruitment of the most-fit prospect.
Another noteworthy distinction between an RPO and a traditional recruitment agency is how they bill the companies for their services. A recruitment agency typically assesses roughly 25% to 30% of the prospects’ salary whom they help recruit.
For instance, if the recruitment agency hires a recruit for a job position with a salary of $200,000, the recruitment agency will charge approximately $50,000 to $60,000 to recruit for that job position. Therefore, it costs the employer $250,000 to $260,000 to recruit the candidate for the particular position while bearing the costs of the company’s internal team, which still does most of the heavy lifting.
RPO partners come to this position quite differently. RPO partners’ duties are either part of or the entire company’s recruitment process. They charge monthly fees to manage all the hiring functions as entitled, along with transaction fees to recruit for the job positions. Considering all this, the total expenses of the RPO are still comparatively lower by 65% to 70% than the overall fees of the traditional recruitment agency. Plus, the employer can assign other functions to their internal human resources.
RPO and traditional recruitment agencies are pretty distinct, and the differences are enormous and expansive. The determination to acquire an appropriate recruiting partner relies on the company’s hiring requirements. Traditional recruitment agencies can help you fulfill your short-term employment objectives.
However, if you want to focus on achieving your long-term hiring objectives, you must have an RPO partner to perform better and achieve long-term recruiting results.
What are the Benefits of RPO?
There are many advantages to traditional recruiting. Many may have become familiar with the practice and appreciate the more hands-on approach. However, RPO has significantly more financial benefits.
Many clients provide products and services in niche sectors. Specialized skills are necessary to provide expertise in their sectors. Therefore, the expense of finding the right candidate can become costly. RPO can offer cost savings to your organization.
Here are some of the many reasons for implementing RPO in your recruiting strategy:
- Reduce cost per hire
Preserve your company's money by remarkably reducing your average cost-per-hire, frequently by more than 50 percent.
- Shorten time to hire
Decreases your time-to-hire by over 40 percent, reducing your association's lost productivity around open positions.
- Manage fewer suppliers
Tailor your recruitment board to augment hiring, allowing you to drive quality, efficiency, and expense reduction.
- Permit supplemental sourcing tracks
Numerous clients are in a niche sector and require scarce skill sets. Leveraging previously untapped sourcing pipelines to access additional prospects is one of many benefits of outsourcing recruitment.
- Enhance the quality of employment to produce talent that produces more for longer
Investigations frequently demonstrate that high-quality hires enhance productivity for associations. RPOs can deliver world-class reviews to gauge candidate quality to create more informed hiring judgments.
- Enhance scalability to answer an organization's varying conditions
An RPO resolution permits an organization to flex skill acquisition either up or down as hiring needs are changed.
- Boost transparency via reporting
Calculate and track execution through frequent reporting on key performance indicators (KPIs) and service level agreements (SLAs).
- Mine talent data for continuous optimization
With an RPO solution, you'll have access to talent data with tangible insights to inform your hiring decisions, from talent mapping to workforce planning. You'll increase efficiencies, identify process improvements, and better forecast future hiring needs.
- Access expertise
Utilizing Hudson RPO's experienced recruiters as an extension of your team provides accessibility to deep candidate networks and reduces the time to engage those candidates.
What is the Future of RPO in Colombia?
Traditional recruiting was previously common all over the world but globalization has helped transform worldwide talent in the United States. The expectation of filling positions was through word of mouth about jobs. Distance makes traditional recruiting an inefficient model for recruiting.
As a result, Colombia is quickly traversing away from traditional recruiting. Virtual Employee Services is leading the transformation of recruiting top talent in the US, Canada and Mexico with their team of specialized recruiters from Colombia. Professionals with experience recruiting in different industries and verticals and proficient in English.
Virtual Employee Services utilizes online recruiting to meet the needs of the globalized society. Their expertise is helping businesses find the top talent in their industry. Implementing the RPO approach has allowed them to see the top skills necessary to complete the job for their clients.
As time passes, more recruiting firms are accessing high-quality talent in Colombia due to the benefits it provides in cost savings. Therefore it is essential to utilize RPO to mine talent to reduce hiring costs. Overall it is a more streamlined approach to recruiting and will deliver top talent to clients that will stay in the position longer.