What is Recruitment Process Outsourcing?

Small business owners are having to play multiple positions on the playing field of business – this can be a mistake. In an increasingly competitive market, long nights and hard work, business owners are quite often having to perform the role of the accountant, the HR adviser, the marketer all while running their company.

Much like we don’t see the quarterback Tom Brady do anything other than throw a football, business owners should start focusing on what they are good at. Just as we wouldn’t ask Tom Brady to do a 100-metre sprint, business owners should not have to handle every single component of their business, including spending their valuable time recruiting.

That is where outsourcing steps in

Outsourcing is the buzzword of the past couple of years. A business owner is facing competitive markets more than ever, and have to do all they can to win their market share. The key here is to do the things you can do, and leave the things you can’t. We do this through Payroll, HR, and Marketing. Even larger companies like Google are relying on outsourcing of programmers and customer service to help them focus on refining their product.

Business owners are outsourcing tasks like marketing, and this makes sense. Strategies, paid search, SEO, Google Analytics – so many systems and processes needed to be learned, it makes sense that we approach others in the space to handle this process. 

So why not do the same for recruitment?

Recruitment Process Outsourcing 

Simply, Recruitment Process Outsourcing (RPO) is when a company transfers all or part of its recruitment to an external provider. They integrate with your organisation to become an extension to your team. Larger companies have the resources and personnel to dedicate an entire department towards recruitment – RPO’s give that ability to smaller businesses by having a dedicated team that pair with, learn the intricacies of your business, then plan and execute a strategy to bring onboard new talent. Some primary areas we can help include:

  • Identifying and definining new roles
  • Attracting the right talent to fill the role, and where to find them
  • Analyse and assess candidates, finding you the right person for the job
  • Conduct onboarding and developmental sessions 

Recruitment Process Outsourcing and Recruitment Agencies are Not the Same

It is important to distinguish between these two types of businesses. Let me make it clear that there are a lot of good recruitment consultants that work with agencies, though while a dog and a cow both have four legs, they are not the same thing. Similarly, RPO’s and recruitment agencies are completely different animals. Below are two reasons why.

The incentives are different

Recruitment agencies are often sales focused and are remunerated by the commission, while RPO’s are often remunerated through hourly rates or contracts. This is a fundamental difference that affects how recruiters interact with both business owners. 

Recruitment agencies are largely sales-focused, simply because they’re billed on successful placement of candidates into an organization. In other words, their success is measured by the number of candidates they can ‘get through the door’ of businesses in order to get a commission, rather than how suitable the candidate is to the position. 

This focus on speed and volume, motivated by incentive of lucrative commission, motivates a number of behaviours which are not ideal. Being sent countless tailored resumes by agencies hoping one sticks is just one example. 

On a more serious level, this can lead to a lack of transparency and even dishonesty from agencies. Agencies have a clear motivation NOT to share any concerns with candidates with business owners, doing so would jeopardize their commission.

This simply does not exist for RPO’s because the incentives are different. They are usually paid by the hour for the work they do, and are profitable based on developing long relationships with business owners.

These lead to increased transparency. In fact, hiring managers I have worked with are often surprised when they highlight why a candidate is not suitable for them. 

The goals are different

Sales metrics – bums on seats and speed of hire are crucial. Consultants who work in agencies often have a large volume of jobs, so filling a role as quickly as possible, with an eye on getting someone in the role for the commission is crucial. So if speed is what you are looking for, then agencies are your best bet. 

While filling a role is important for an RPO company, the true test of success begins when the person begins. Are they performing the way we thought? Are there any problems? Are they achieving KPI’s? These are the questions that come up that determine how effective the RPO’s process has been. Since an RPO is ultimately an extension of your talent team, trust and flexibility are key attributes.

The focus is on performance, so the process needs to be objective.

RPO’sRecruitment Agencies
Often hourly or contract-based – you get paid for the work you do by the hourCommission incentive structure (often 15-30% of the candidate’s salary)
Can collaborate with you to identify and define the position you need and the right person to fill it, then carry out an end-to-end recruitment process that is tailored to your business’ needs.Usually only concerned with placing candidates
Success is measured based on the performance of the candidate once they are in the jobSuccess is measured by sales metrics like bums on seats to receive a commission
Perfect if you are willing to wait for a quality employeeSuitable if the speed to fill a role is the most important concern

There is a place for all services  When it comes to bringing on your next team member, you have an array of options. Recruitment agencies and RPOs alike can be excellent resources for your company and there is enough space for them to work in tandem. 

If you are seeking a competitive advantage, and you know who you choose to bring on can put you a step above your competitors, partnering with an RPO is your answer.