In times of massive layoffs and a possible economic recession, tech companies can’t accurately predict their long-term hiring needs. They may need to recruit more staff if the business finds an opportunity to grow and stop hiring when the business just does its best to stay afloat. So how can you ensure that you’ll have the recruitment staff you need during the good times but not have idle recruiters doing nothing during down times?
Recruiting process outsourcing (RPO) might be the solution you need. In this article, we’ll explain what recruitment process outsourcing is, how companies benefit from this approach to hiring, and which challenges to watch for when collaborating with an RPO agency.
What is the recruitment process outsourcing?
Recruitment process outsourcing is an approach to recruitment in which you hire recruiters on demand from an outside agency to conduct some or all of your hiring activities. Based on your needs, RPO services might include one kind of recruitment task, like sourcing candidates or interviewing them, or they may cover end-to-end talent acquisition for certain positions.
Often, companies hire recruiters via the RPO model to have extra hands during hiring spikes. When you sign a contract with an RPO provider, the provider assigns an on-demand recruiter who takes one or two days to get acquainted with the company’s needs and processes and then begins the hiring tasks. An on-demand recruiter usually works with one client at a time.
Unlike traditional staffing agencies that follow their own established recruitment processes, on-demand specialists from a recruitment process outsourcing company follow the client’s methodology and adopt the client’s best practices. Basically, on-demand recruiters are just like in-house team members from your HR department, but they are hired for only the short period during which you need them.
Top 5 advantages of RPO
Besides the obvious increase in recruitment capacity, RPO services provide a variety of other advantages. Let’s outline the most important of them from a business standpoint.
First and foremost, RPO offers cost-effectiveness to companies looking for new employees. That’s because you don’t bear the cost associated with hiring more recruiters for your talent acquisition team. An RPO agency provides you with pre-vetted recruiters who have the necessary expertise and are ready to start assisting you with hiring activities once you sign an RPO service agreement.
Also, if compared to an in-house model, you don’t have to commit to paying a monthly salary and benefits to recruiters if no hiring tasks are needed. Once the hiring volume recedes and your in-house HR department can handle the remaining tasks themselves, you can easily terminate or pause an RPO agreement.
As a result, the RPO model saves you from increasing your fixed operating costs. When needed, you can augment your team for a month or two to fill the urgent-hire positions and then use your in-house recruitment department to move forward from there.
RPO offers scalability — you can quickly increase and decrease your hiring capabilities as needed. Suppose you have one in-house recruiter and a large project starting in just two months. You can either overload the recruiter with no guarantee of fully staffing the project team by the project start date, or you can collaborate with an RPO agency to get extra help from experts in the specific domain of the project.
You decide how long you want to collaborate with an RPO agency and the scope of service they’ll provide. For example, if the position you’re advertising for attracts way more candidates than you expected, you can quickly scale up your talent acquisition team with additional on-demand recruiters to deal with the high volume of applications. You can have on-demand recruiters take care of screening and interviewing the candidates and have your core HR team complete the rest of the hiring process (e.g., onboarding, orientation).
Your in-house recruiter might be a generalist who works with all kinds of vacancies, but sometimes you need a recruiter with more specialized expertise, especially for tech recruitment. In this case, you can outsource to an on-demand recruiter with industry-specific knowledge of certain domains, for example, fintech or front-end development, that your in-house team has less experience with.
The specialized expertise of on-demand recruiters increases the quality of hiring; you won’t risk hiring someone who doesn’t match your requirements and expectations. You’ll get an employee who can perform their tasks because an on-demand recruiter with domain-specific knowledge properly and thoroughly assessed their skills.
Additionally, finding skilled candidates with reasonable compensation expectations that align with your budget sometimes requires a global search. In-house recruiters typically have hiring experience only in the country where the company is located. In contrast, you can outsource to recruiters who specialize in different regions around the world. This means they know about the cultural aspects of talent acquisition in those regions, as well as all the regional labor laws and other legal aspects. So, an on-demand recruiter can broaden your horizons and find candidates in regions you couldn’t reach before.
Optimized time management
RPO providers have years of recruitment experience. Their recruiters understand hiring best practices, know how to collaborate with in-house HR teams, and can onboard in just a day or two to get to work fast. Plus, most on-demand recruiters have skills in recruitment optimization tools like AI-enhanced applicant tracking systems.
So, on-demand recruiters can quickly fulfill your hiring needs and free up your HR team for more strategic tasks, like building a recruitment strategy, monitoring the onboarding processes, or coordinating new employee benefits. Rather than overwhelm your in-house HR team with a ton of tasks, you can let an RPO agency handle your excessive recruitment needs.
Quality talent acquisition
Candidates with skills in high demand get a lot of offers, so competition for their attention is intense. RPO specialists know where to find hidden gems and how to approach candidates whose inboxes are overflowing with job offers. In fact, recruitment process outsourcing agencies often maintain their own databases of highly qualified candidates. As a result, collaborating with top RPO companies gives you access to a pre-screened pool of quality talent.
In addition, unlike in-house recruiters, who are often inundated with multiple HR activities, recruitment process outsourcing experts focus on a single task. They have the resources to provide a pleasant, seamless journey for candidates and know how to overcome recruitment challenges. As a result, a high-quality candidate experience increases the likelihood that you’ll beat the competition to get the candidate you want.
Summing up, RPO is a profitable approach to get high-quality and speedy recruitment results. No wonder the RPO market is expected to grow at a compound annual growth rate of 18.2% from 2022 to 2028. Still, business owners might have some concerns with this model. We address them in the next section.
Concerns & considerations related to RPO services
While recruitment process outsourcing comes with a long list of advantages, you might have concerns about collaborating with an RPO company. So let’s discuss them and dispel your doubts.
Data privacy and confidentiality
It can be hard to trust an outside vendor with a crucial business process like talent acquisition. Your company has to disclose lots of confidential information to the vendor, such as candidate databases or details about your business processes. However, an RPO agency cannot share or use any of your company’s information for its own gain.
All personal information is protected by the General Data Protection Regulation in the EU and a set of data protection legislation in the US. These and similar laws protect data related to any candidate that a recruitment agency processes. Violations of legal and ethical standards result in financial sanctions.
Plus, if you collaborate with a reliable RPO agency, they sign an agreement that, among other things, protects your confidential data. Let’s talk about this next.
On top of protecting your information, a legal contract with your RPO provider is your safety net and a guarantee that the procedure and results of your partnership will be exactly what you expect. Usually, a contract contains details about the following:
- scope of services
- contract violation penalties
- conditions for contract termination
With a signed contract, you can be sure that your rights are protected, and there won’t be any unpredictability, gaps, or service setbacks in the recruiter’s work.
Compliance with labor laws
Each country has its own labor regulations concerning hiring processes, compensation, employee benefits, work hours, and so on. What’s more, many regions have additional restrictions for employing foreign talent. Industry-specific knowledge, along with the knowledge of labor laws, is essential for a successful hire that avoids any legal trouble.
But you won’t have to worry about this when opting for recruitment process outsourcing. On-demand recruiters from the top RPO companies know the labor laws and cultural practices in the countries they work with. For instance, at Indigo Tech Recruiters, our experts specialize in different regions, like Europe, the US, or Latin America, so they know the hiring dos and don’ts for their assigned region. If your hiring methods might violate any legal and ethical standards, the recruiter lets you know and suggests a different approach.
Conflict of interest
Some HR directors are concerned that an on-demand recruiter might also work with a competitor and, as a result, be biased and source a stronger candidate for the competitor.
But in practice, this scenario is unlikely when you work with reliable RPO providers. Typically, on-demand recruiters work only with one client at a time. This means that a recruiter dedicates all available resources to the client and offers you the candidates who best fit your requirements.
Full-cycle recruitment agency or RPO?
At this point, you might be wondering what’s better: hiring a traditional staffing agency or opting for recruitment process outsourcing. Unfortunately, there’s no right or wrong answer; as with many things in business, it depends on your needs.
Full-cycle recruitment services
A full-cycle recruitment agency typically assumes ownership of the recruitment process and takes full responsibility for the results. In other words, they have their own established recruitment and hiring methods. They give their clients a short list of suitable candidates and provide any other assistance according to the contract they sign with you. There’s not much room for flexibility.
In some cases, when providing executive search services, a full-cycle recruitment company can also communicate with candidates through its own brand and disclose the name of the client only at the later stages of hiring.
This approach may suit you if you don’t mind the agency’s hiring methodology: with a full-cycle recruitment process, you just assign a recruitment task to an agency and get results in an agreed-upon timeframe. It requires a minimal level of involvement from you as a client.
The recruitment process outsourcing approach offers flexibility and more control over the hiring process. Recruiters from RPO agencies adopt your business processes and act as an extension of your in-house team. From placing job ads to screening, interviewing, and selecting candidates, on-demand recruiters substitute for an in-house recruiter for one, several, or all open positions, representing your brand.
The RPO model is the best fit for clients who need only one or two particular tasks in the recruitment process covered, have a temporary need for extra hands, lack expertise in a certain domain, or want to keep ownership of the recruitment process.
Customize RPO services to meet your needs
As mentioned earlier, with RPO, you can tailor the scope of services to your needs. Such customization is one of the biggest advantages of RPO — in-house recruiters and traditional staffing agencies can’t give you the same level of both expertise and flexibility as an RPO can.
Let’s look at an example of how things work here, at Indigo Tech Recruiters. We offer recruitment process outsourcing for tech companies. After discussing the scope of work a client needs, we suggest an optimal solution tailored just for your company. You’re free to provide your own candidates for us to screen and interview, request RPO service for a certain period of time, or let us help you with hiring in a certain region, like Latin America.
Choosing the right provider
If recruitment process outsourcing seems like a good option for your business, it’s time to choose a provider. With a wide variety of recruitment agencies on the market, it’s critical to choose one that’s not only professional and experienced but also one that can fulfill your request and has expertise within your domain.
We prepared a checklist you can use when selecting a recruitment processing outsourcing partner:
- Does the agency provide the RPO service you need (e.g., screening, interviewing, onboarding)?
- Does the provider work in the region where you want to hire?
- Does the provider have recruiters specializing in your domain and the employee profile you are looking for (e.g., DevOps engineer for an enterprise-level company, UI/UX designer for a fintech startup)?
- Does the provider have positive reviews from previous clients?
- Does the agency use best practices for its recruitment activities?
- Does the payment model (e.g., pay per hire, rate per hour) suit you, and is the rate on par with your budget?
- Does the agency provide a contract outlining the terms of the cooperation?
Answers to these questions will give you an idea of how a specific recruitment process outsourcing agency works so that you can decide if it fits your needs and can deliver the results you expect.
Recruitment process outsourcing can provide reliable support for HR directors who need to extend their in-house team to cover growing hiring needs for a short period.
With RPO, you can access recruitment services that meet your current business. Thanks to a high level of customization, access to a wide pool of talent, specialized expertise, scalability, time-management optimization, and cost-effectiveness, RPO is a top choice for many companies looking to increase their hiring capabilities.
Indigo Tech Recruiters provides professional recruitment process outsourcing services. Our recruiters specialize in a variety of regions and domains and stand ready to help your tech company achieve its hiring goals!