As we face our new reality in a remote work environment, the days of in-person interviews and in-house talent acquisition teams are over. Today, the recruiting landscape looks much different. These traditional processes are now being replaced by interviews conducted over Zoom. Offices are no longer essential to getting work done. As budgets were tightened for many organizations, the need for outsourcing roles became much more apparent. In a time where flexibility and cost savings have become crucial to the success of a business, outsourcing may be the right option.
A recruitment process outsourcing (RPO) agreement is where an employer transfers all or part of its recruitment process to an external service provider. So, an RPO provider is responsible for the design and management of the recruitment process and the responsibility of results.
When should a company invest in an RPO, what are the benefits and what are the potential risks? Let’s discuss.
When Should a Company Invest in an RPO?
Most organizations seeking an RPO are looking for a more cost-effective recruiting option. A lot of resources such as time and money are spent on the recruiting process. Recruiting costs not only includes advertising, payment for employee referrals and relocation fees, but it also has an impact on administrative work and job board fees. Additionally, sorting through resumes and interviewing candidates all takes time and, when a candidate doesn’t work out, the recruiting process has to start all over again.
Over the past year, there has been a narrowed focus on HR departments. From hiring to maintaining employee engagement, each is a job within itself. With so much time spent in the recruiting realm, it can be difficult to juggle multiple tasks at once. An RPO can free up the HR department to focus on those important non-recruiting tasks.
When Shouldn’t They?
You cannot build a successful RPO program overnight. It necessitates a long-term investment and commitment to work out kinks and refine the process. On average, a contract term for an RPO agreement is around three years. Without these established expectations and involvement from leadership, it can result in wasted resources and limited success.
Additionally, with RPOs, it isn’t guaranteed that they will have extensive experience with your industry. In this case, it might take them longer to get ramped up and educated on what exactly your business does to make the partnership worth the investment. For many companies growing at an extremely fast rate, waiting for an RPO to ramp up, is ample time lost.
What Mistakes Do Companies Make When investing in an RPO?
We’ve discussed why a company should invest in an RPO and a few reasons why they shouldn’t. But what are some of the mistakes companies make when first investing in an RPO? Oftentimes, human resources and talent acquisition teams work with multiple vendors –– from investing in an applicant tracking system to working with a vendor who prints your company’s business cards. If you don’t know what existing systems you have or the names and titles of new hires, it won’t do much good. It is the same with an RPO; preparation is extremely important. You need to ask questions such as “What types of services do I need?”, “What do I consider success?” and “What KPIs and metrics should I be measuring against?”. While RPOs can help you set guidelines at the beginning of a relationship, establishing your expectations will be essential.
Another common mistake when investing in an RPO is managing the relationship poorly. Once the RPO agreement is signed, it doesn’t mean you are simply passing the baton. For an RPO to succeed, constant communication and open dialogue between the two teams is needed. Additionally, it is necessary to establish clear expectations with KPI and metrics, reporting and a set communication schedule.
Investing in an RPO can provide great value to an organization, especially in the remote work era for cost savings, flexibility and productivity. With any agreement, understanding the pros and cons are important. When determining if an RPO is the right fit for your organization, be sure to pay attention to the details, do your research and make sure you are receiving the value for the price you pay.