subject: RPO explained [print this page] RPO is a commonly used acronym in the business world that refers to a form of process outsourcing - where a company transfers an internal activity to an external service provider. In this case, the process is recruitment and appropriately enough the acronym refers to Recruitment Process Outsourcing.
RPO effectively places the control and management of a company's internal recruitment activities under the control of an external third party, who will then manage the entire hiring process for a company. Accordingly, they'll take over everything from job profiling to advertising and interviewing candidates, even the process of inducting a new recruit into the organisation.
This kind of outsourcing is closely related to when a firm contracts a recruitment agency for temporary or contingency staff or for executive services. However there's a key difference in the level of ownership the external agency has under RPO and other types of staffing; under other types, the external company is part of a process controlled by the client organisation; in RPO, the external company is in charge of the entire process and responsible for their strategy's success or failure.
Outsourcing the recruitment process so completely has certain risks and benefits. As with any business strategy, these are not so much inherent to the system so much as dependent on the efficiency of their implementation. In short, if the RPO provider is not reliable or experienced, they may fail to deliver your desired goals and could potentially weaken employer branding and employee engagement.
Yet if done well, RPO can often be much more effective than internal handling of this process. As the external agency is solely focused upon recruitment services, they can bring several benefits that an internal department is unlikely to be able to offer.
Firstly, by leveraging the economies of scale the recruitment process can often be undertaken at a lower cost per instance, particularly for larger organisations with high turnover. Secondly, the economies of scope - the broader reach of a larger recruitment staff with established assets in candidate information, recruitment tools and networks - allow them to reach both more and better qualified candidates for vacancies, particularly in niche specialist areas.
Thirdly, the commercial relationship between the provider and the client itself can offer certain benefits from a business perspective. As remuneration is often reliant upon the external provider meeting specific performance targets - which unlike an internal process, can be withheld if this contractual obligation is not fulfilled - the relationship can have very clearly defined objectives and goals, allowing a greater indicator of the client's ROI (Return On Investment).
