What is RPO, and why now?

Showing how RPO works

With the ups and downs of the labor market and the impact of COVID-19 on the economy, your recruiting efforts have likely been impacted. Perhaps you had to downsize your internal team and pivot to using third parties for assistance. Maybe you’ve looked at RPO in some form before; maybe you’ve already worked with a firm that provides these services. But what exactly is RPO, and why does it make sense as a solution more now than ever?

Source2 Recruitment FunnelRecruitment Process Outsourcing, or “RPO,” refers to the transfer of all or part of recruitment functions to an external provider. This can include any combination of candidate sourcing and engagement, advertising, screening, interviewing, offer provisions, background checks, and even retention efforts.

An RPO partner can deliver the technology and methodologies to fulfill a client’s recruitment requirements quickly and cost effectively. However, all RPO partners are not created equally, and their methods, speed, efficiency, and cost can vary significantly. RPO should also not be grouped with search or staffing firms, which are in their own category and operate under a different set of expectations (and are typically more expensive overall).

Why would you want to “outsource” something as intrinsically important to your organization as the recruitment of people, and why now? First, it’s important to note that RPO companies do not “hire”; they recruit candidates for you to make hiring decisions and facilitate onboarding. Hiring managers and human resources specialists often spend a disproportionate amount of time on many increasingly time-consuming recruiting tasks, preventing them from focusing on strategic priorities such as onboarding, retention, and training. With the continued uncertainty of the economy, companies are asking their personnel—particularly human resources managers—to serve in even more multi-faceted roles with fewer resources. Outsourcing some or all of your recruitment processes to a trusted partner allows other important objectives to be prioritized, and the right partner can also create greater time and cost savings.

Fixed Cost vs. Variable Cost Business Models & Related Spend

Source2 Fixed Cost vs Variable Cost model In working with our client partners, Source2 emphasizes flexibility and cost efficiency.

We typically begin our partnerships with a pilot program, sourcing qualified candidates for a specific location or position type, allowing for a low-risk proof-of-concept. This trial period enables both parties to “test-drive” the relationship and discover how to define roles and responsibilities that best suit the new client. A typical pilot program runs about 4–6 months. While there is no long-term commitment upfront, over 90% of our completed pilot programs result in long-term relationships.

Recognizing that hiring needs can change quickly and may vary seasonally, our agreements are structured to be highly flexible, while still allowing new clients to take advantage of cost efficiencies through economies of scale based on hiring volumes. Our cost-per-hire fee structure means we get paid for the value we deliver when we deliver it, not in upfront fees or deposits like many other firms.

The Source2 model aims to provide cost efficiency through a lean and agile process supported by advanced technology. The Source2 tech stack provides a competitive edge through best-in-class technology like AI, automation, virtual hiring events, targeted social and online media, and other advanced technologies. This means a higher volume of qualified candidates in less time and with less effort from your hiring managers.

These are just a few of the ways the right RPO partner can help optimize your recruiting. To truly appreciate the potential benefits of RPO, it’s important to fully calculate your cost per hire for comparative purposes. We’ll delve into this calculation and the various costs to consider, as well as process and performance efficiencies, in more detail in our upcoming articles, so stay tuned. If you want more information now, reach out to us at solutions@source2.com or by completing our contact form, and a member of our executive team will connect with you.

Written By: Source2

Tags: RPO, Recruitment, Recruitment Process Outsourcing, solution

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