Why Your Business Needs Recruitment Process Outsourcing
Updated: May 20, 2020
Experiencing business growth presents exciting opportunities, but it can also be costly if not managed properly. Acquiring and retaining the most qualified talent in the market are crucial parts of ensuring that the quality of your products and/or services will not decline as your business grows. This means doubling on your recruitment efforts to get quality employees that will play an important part in your company’s success. According to the combined data from Glassdoor, GoHire, and CMD Recruitment, 76% of hiring staff say that the biggest challenge they have during the recruitment process is to attract quality candidates. If you are looking for an employee that is well-rounded and will put an added value to your company, it is best to have an intensive but efficient screening process to come up with the right fit or right addition to your organizational chart.
But here’s where most businesses fail - they can’t secure the people they need because:
With the tedious workarounds during a recruitment process, doing it in-house might take a lot of your time and energy. There’s also a tendency that because of the urgency or being under pressure, you may get talent that might not be of great fit just to fill the gap.
On the other hand, should you wish to thoroughly run through everything, the influx of job applications and follow-ups can also be quite time consuming for you. This also includes the actual screening of those CVs and/or resumes as well as contacting their references for verifications.
Doing all these within your capabilities might take you some time before coming up with a top-quality talent for your company. This is where the benefits of outsourcing recruitment and selection process comes in.
Based on the report of LinkedIn, talents are 4x more likely to consider a company for a future opportunity when it provides enough (and probably faster) feedback since 52% of the job seekers’ frustration is getting a lack of response according to Career Builder.
The Society for Human Resource Management suggests that the average time it takes for a company to hire is 36 days for a talent, which can be very long especially with tight timelines. Zety, in their 2019 study, shares that a company may lose 89% of potential candidates due to prolonged screening process and you might really miss out on something big!
So why waste a chance of getting a top-quality talent when you can get a helping hand in the recruitment process?
Fortunately, innovative business models emerged to overcome these challenges. One of the most popular solutions availed by growing firms is called Recruitment Process Outsourcing (RPO). Most of the top recruitment process outsourcing companies offer comprehensive solutions to ensure that you will get only the best talents for your business. But what is Recruitment Process Outsourcing really?
Recruitment process outsourcing or RPO is a solution taken by businesses to manage their human resource requirements by hiring an external service provider. The RPO firms act as an extension of their client company’s human resource department who process and nurture applicants depending on what jobs are needed to be filled up.
Instead of assembling or expanding your own recruitment team from scratch, your RPO partner can save you time and resources by handling this responsibility. Aside from completing the recruitment process cycle, RPO can also help you with resource planning, project-based or high-volume hiring, and full-time recruitment support.
Recruitment process outsourcing firms act as the external human resource arm of a company. The scope of their services usually covers the searching, pooling, and screening of applicants up to interviews, job offers, and contract signing. With the end-to-end hiring solutions that an RPO can give, most company executives can now focus more on their business while also growing their team.
Having a Recruitment Process Outsourcing partner can save you from all the hustle and bustle of the whole hiring process. With a skilled and seasoned RPO partner, you will not just be able to have good quality hires but you can also expect an efficient hiring process.
According to the Recruitment Process Outsourcing Association (RPOA), 36% of companies find that they can reduce their cost per hire through having an RPO partner. Moreover, 41% of them also believe that they find it easier to prioritize talent within a solidly constructed talent pipeline while their RPO partner guarantees talented and quality candidates. RPOA further suggests that 17 to 20 per cent of the RPO users are more likely to have a workforce wherein more than 50% of them are top quality talents.
There are three different types of engagements in RPO depending on the demands and needs of a company. It involves the consideration of their size, financial capabilities, and the gaps that are needed to be filled.
This type is a contract-based engagement. The RPO and the client company will set a defined number of roles to be filled or the number of applicants to hire within a period of time. This means that when the hiring needs of the client company suddenly arises, they can easily call their RPO partner and ask to pool some candidates.
For this type of engagement, the RPO partner only takes a piece of the client company’s hiring needs entirely out of their plate. For example, an entire department for Sales Agents, Customer Support Representatives, or Marketing Staff. This is for companies who require a more aggressive and comprehensive hiring.
Among the three types, this one offers a more comprehensive and holistic hiring function for the RPO partner. This means that the client company fully entrusts their entire internal recruiting function and hiring process to the provider’s hands. This includes the sourcing, pooling, marketing, interviewing, screening, and even the actual send-off process.
As most of the top recruitment process outsourcing companies nowadays offer end-to-end solutions, there is a lot more to have when acquiring an RPO partner. Here are the top benefits of partnering with an RPO provider for your human resources needs:
The core of expertise of an RPO is to provide its clients with top calibre talents that will fill in the gap in their workforce. With the experience, resources, and manpower of an RPO company, there is no doubt that they can give you the best employee that you need.
Shorter lead time
RPOs usually follow a strict timeline on their hiring process. You can be assured that there will not be a prolonged screening process but more of a time-bounded output.
Less cost per hiring
RPOA suggests that about 36% of companies believe that they would lessen the cost per hire by having an RPO partner.
In fact, filling job vacancies faster is beneficial to boost productivity, business continuity, and reduces the cost of HR resources. After all, RPO providers strictly follow the prescribed hiring pipeline and professional measures for a much more cost-efficient hiring setup.
Flexible and scalable
Through their experience and capabilities, most RPOs are very flexible and scalable. They can adapt to any kind of situation their client company will be in. They can easily downsize or upsize their hiring capability to adapt to the demands of the market and the client itself.
Apart from the consistent communications, RPO providers ensure accountability through analytics monitoring and reporting. They provide traces and documentation for every stage of the recruitment process for better insights that will enable faster and better decision making for their client company.
Mutually beneficial streamlining of processes
This is an integral part of having an RPO helping in your recruitment process. RPO providers collaborate with their client company in designing or re-designing their recruitment process to make it easier for them to follow and understand the procedures.
RPOs are also dedicated to complying with the regulations and labour codes. This is to create a mutually beneficial relationship between their client company and the talent that they will endorse for hiring.
Less direct advertising cost
Majority of large companies tend to allocate advertising budget for job hirings. This technically makes them spend more given that the advertising cost (both traditional and digital) is really not that cheap.
With an RPO provider, you can definitely be saved from this, as well as the hassle of creating key visuals or ad copies. Most RPOs support paid advertising for hiring. Since they have the experts in-house, they can all easily manage this for you without burning a hole in your pocket.
Companies come in different sizes and have specific needs, so RPO may not count as a viable option for everyone. To help you determine if you should switch to RPO, pay attention to these five signs:
1.) You need a high volume of hires in the next 12 months
If you need additional seats for a growing project or you want a one-off scaling initiative, project-based RPO can cater to these seasonal requirements. Moreover, RPO can accommodate seamless volume hiring process.
According to Glassdoor, each corporate job offer attracts at least 250 resumes on average but only 4-6 of them will be interviewed and one will get the job offer. Just imagine if you need a high number of hires in the next months and these numbers can be applicable with your hiring posts. With the tedious screening process, you might miss out on your other business agenda. Hence, letting an RPO provider do this for you will ensure greater outputs.
2.) You have limited resources in finding quality talent
Having a small recruitment team might be limiting you from searching within the local and international market for competent professionals. RPO providers have access to a bigger pool of candidates and have an applicant tracking system to manage their database.
In average, it will take a group of people to complete a hiring process. The first one would be a recruitment officer or recruiter. Some RPOs even have a Recruitment or Human Resource Specialist who will be under the Hiring Manager. Upon approval of the job offer or final interview invitation, other people including personnel for background checking, medical examination (company nurse/doctor), talent coordinator, and lastly, an onboarding specialist will also be a part of a complete and thorough application journey. Most companies doesn’t have this kind of structure or department but an RPO does, hence, it will be extremely beneficial.
3.) You want to eliminate the tedious, time-consuming hiring processes
Because RPO gives you access to full-time recruitment consultants, these dedicated specialists will spare you the trouble of going through thousands of applications to filter the right candidates.
Since the average time of acquiring a new hire is usually more than a month, this may create a big impact on your ability to hire in house. Apart from shortening the period of the hiring process, having an RPO can also save your precious time from dealing with the recruitment task at hand. Most of RPO’s end-to-end solutions cover almost 90% of the needed things to do for employee sourcing and often, approval of the hires is the only thing that client companies will do.
Top recruitment process outsourcing companies adopt techniques and measures to make sure that the candidate experience will always be taken care of. There are about 83% of talents who agree that their overall experience will be improved if they will be provided with a clear timeline of the hiring process (CareerBuilder). Providing a great candidate experience is also another role of an RPO. In order to make sure that they nurture the candidates with the highest potential, RPO providers follow a timeline and standard communication plans to guarantee this.
4.) You want a cost-effective yet faster way of sourcing talent
Getting in touch with several recruitment firms can be pricier than simply pairing up with one RPO provider. As a one-stop recruitment partner, RPO providers can also take care of onboarding, technology, and change management.
About 36% of companies who utilized RPO for their hiring needs agree that it has reduced their cost per hire. More companies nowadays are also seeing the value of this decision so this percentage can definitely go higher. There are various cost models that most RPO adopt to ensure the cost-efficiency of their services and make it mutually beneficial for their client company. Two of the most convenient and common cost models are the Management Fee Model and the Cost Per Hire model. The Management Fee model means that the client company will be paying a certain management fee to an RPO for a fixed number of positions to be filled. Meanwhile, the Cost per Hire model requires the client company to pay the agreed amount for each position that was filled.
5.) You want an integrated talent source and recruitment tools
If you or your in-house recruiters are finding it difficult to manage multiple sourcing channels, your RPO partner can provide the people and technology to streamline your processes.
According to the Recruitment Process Outsourcing Association, “RPO partnerships are improving accountability in the Best-in-Class definition of top talent while helping the Best-in-Class brand for top talent matches and maintain a steady talent pipeline”.
Here’s how much an RPO can enhance your recruitment function according to the study of RPOA:
If any of these or all of these items ring a bell, then you should definitely hire a recruitment process outsourcing company now!
If you’ve decided that RPO can help improve the quality of your hires and reduce your expenses, take the next step by looking for a trusted staffing partner.
Your ideal RPO partner should have the expertise, resources, and experience to support your talent acquisition efforts. If they have a proven track record of helping businesses in various industries through their holistic recruitment solutions and have access to a global pool of talent, your firm can tap this RPO advantage.
If integrated successfully into your business, Recruitment Process Outsourcing can support your long-term human resources strategy and you’ll be confident that as you grow, you can find the right people for your firm.
If you are thinking that recruiting agency and RPOs are the same, you have to think again. There are a lot of factors where these two business models differ from each other. After all, there is already a pre-existing distinction between the roles and hiring techniques for both.
To help you differentiate the two, here are some of the factors that you should look into:
A recruiting agency makes placements from the pool of candidates that they have gathered and found through their own internal efforts. These agencies are being paid once they successfully ‘sell’ you one of their talents for hiring. Furthermore, the hiring process is strongly within the hands of the agency. Employee referral programs and usage of the client’s own assets like website, JobStreet, or LinkedIn profile are not being utilized as everything should be done in-house by the RA.
Meanwhile, RPO firms make sure to find the best talents across all sorts of sources. They make use of referral programs and their client’s own assets to maximize the capacity of the whole recruitment process.
Recruiting agencies technically ‘own’ their talents since they are getting paid per placement they acquire. On the other hand, RPOs do not necessarily own the talents. They give the full authority to their client regardless of how they were able to get the candidate for hire.
Scope of Services
Usually, the commitment of recruiting agency ends when their talent earns their placement. This means that there are still some remaining hiring process tasks that will be left in the hands of the client company or the HR themselves. But, for RPO companies, their commitment extends beyond the actual placement of the talent. Apart from writing the job description for the new hires, RPO experts also conduct the actual screening, proper turnovers to the HR manager, and assessments. This is what end-to-end solutions in RPO means.
The cost of services is another factor where both RPO and recruiting agencies vary the most. A recruiting agency charges a certain percentage of the allotted salary for the talent for hire. For example, a client company and an agency agree that 20% of the total salary of the new hire will be their fee. Imagine if the salary of that talent is around $1,000 (PHP 50,000.00) so the fee of the RA is going to be around $200 (PHP 10,000) - not to mention the residual tasks that will be handled by the HR team of the client company.
In the RPO side, it is entirely different. Each RPO firm adopts a cost model that will be mutually beneficial for them and the client company. This already includes all the end-to-end solutions and the management fee. The fee is usually 60% to 75% lesser than than how much recruiting agencies charge so it does make it more cost-effective in a holistic way.
EMAPTA Talent Solutions (ETS) provide end-to-end recruitment outsourcing solutions to growing businesses in Australia, New Zealand, America, and the United Kingdom. We have helped over 340 companies in building world-class recruitment teams and hiring high-performing professionals.
Here’s how EMAPTA Talent Solutions stands out from other staffing agencies or recruitment process outsourcing companies:
ETS is backed up by EMAPTA’s industry experience and leadership. We are highly committed to giving our clients the best talent that will surely contribute to the success of their companies.
We pride ourselves on offering easy, fast, and reliable recruitment process services. Here’s the six-step RPO process to give you an overview of how your potential provider will engage you in finding talent from proposal to actual deployment:
Remember: RPO is all about making your recruitment process simpler and easier with a trusted partner who can provide resources, tools, and expertise in finding the right talent, so you can focus on what matters most: improving your products and services for an overall better customer experience.
If you’d like to know how our solutions can help your business, book a meeting with us!