An increasing number of companies have begun to outsource back office and support functions to outsourcing firms, taking advantage of the reduction in operating expenses. These are the functions that are critical to the business, but are not directly related to its core function. These include payroll, accounting, and recruitment. Most of these are sensible and can easily be handled by good outsourcing companies. However, some people question the logistics and wisdom behind recruitment process outsourcing – essentially letting an outside company recruit employees for the business.
The concept
RPO happens when an outside provider acts as a client company’s full or partial internal recruitment department. These HR outsourcing companies manage the entire process, from profiling the available job to interviewing applicants to the initial training of new staff. Ideally, these are all within the limits established by the client company at the beginning of the arrangement. In theory, a well-managed RPO firm can cut down on the resource cost of recruitment for a client, reducing the time and money needed to staff a department or fill a vacant position.
The main benefits
No business would outsource one of the most crucial back office functions without good reason. RPO is no exception, and the practice does generate some real benefits. Companies that commit to HR outsourcing can effectively cut the department from their budgets by allowing the service provider to perform those tasks for them. This also frees up data resources, removing the need for the company to handle things such as databases of candidates and the networks and tools required to recruit new employees. An HR outsourcing provider can also cut down on the time it takes to hire workers.
The risk factors
The main risk is that recruitment process outsourcing does not always yield the expected results if not carefully supervised. The client must provide the outsourcing company with very specific guidelines and the initial direction, as well as continue to monitor things closely to achieve the desired results. There is also no regulating body yet, as RPO is still very loosely defined. This means that an HR outsourcing firm may not always structure the recruitment process in a way that would be beneficial to their clients. There are also instances when the choice to outsource this task could become more expensive that having it done internally.
RPO can help a company grow without costing it too much, in terms of time, manpower, and finances. However, since recruitment is such a critical part of a company’s operations, even the best RPO provider needs to be closely monitored by its clients. There are benefits and advantages, and businesses must think carefully whether or not to employ this practice.