What is RPO?

Recruitment Process Outsourcers (RPOs) act as a company’s internal recruitment function for a portion or all of its jobs. RPOs manage the entire recruiting/hiring process from job profiling through the on-boarding 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.

More and more clients are now realizing the value of outsourcing either a part or their entire recruitment process and focusing on more strategic activities.

Traditionally, contingency search firms, or third-party recruiters (TPRs) are used to augment a company’s internal recruiting needs. Relationships with TPRs include sourcing both permanent and temporary workers; firms may be used to fill a unique position, or to execute volume hiring. The company typically engages multiple search firms to work on the open positions. The ownership of the recruitment process and responsibility for filling the position rests with the company. The contingency firm is typically not governed by any SLAs. Contingency search firms would typically charge upwards of 25% of candidate annual salary as their fees.

Retained search firms are often used to identify so-called passive candidates from leading competitors for more senior positions. Retained search firms would charge an upfront fee and then success fee when the candidate is hired. Their total fee is typically upwards of 30% of candidate’s annual salary.

Recruitment Process Outsourcing firms, means the recruiting partner takes ownership of all or part of the recruiting process. This is not the case in the average business relationship between the hiring company and the third-party recruiter, and this is primarily where RPO diverges from traditional staffing firms. RPO firms are governed by SLAs and drive process efficiencies by use of metrics and reporting.

Source: Recruitment Process Outsourcing Association

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