Why does your Firm have an internal recruiting function?

When many of you read the title to this post you may scratch your head and remark that “Dan may have lost it this time”.  In truth, I find the question to be valid and one I will blog on at least this week and maybe next.  Let’s take a look at the recruiting or talent acquisition function, and determine why firms still choose to leave this as an internal function.

At first glance, the reason firms seem to have the recruiting function internally is that they have “always done it that way.”  That same line of thinking holds true for many other functions, but in this world and period of time I see more and more firms really paring down their internal processes to those that are most essential and outsourcing many of those that are less a part of their core function.

Recruiting, sourcing, or talent acquisition are essential needs for most firms, especially those that plan to grow in size, but I believe many firms can be successful by taking this function and placing it into the hands of a qualified partner who will assist with the identification, sourcing and presentation of talent to the firm.  One such method of establishing this partnership is called Recruitment Process Outsourcing or RPO as it is designated.

What is RPO?  Here is the definition from Wikipedia:

Recruitment Process Outsourcing is a form of business process outsourcing (BPO) where an employer outsources or transfers all or part of its recruitment activities to an external service provider.

The Recruitment Process Outsourcing Association defines RPO as follows: “when a provider acts as a company’s internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through the onboarding of the new hire, including staff, technology, method and reporting. A properly managed RPO will improve a company’s time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance.”[1]

The RPO Alliance, a group of the Human Resources Outsourcing Association (HROA), approved this definition in February 2009: “Recruitment Process Outsourcing (RPO) is a form of business process outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external service provider. An RPO provider can provide its own or may assume the company’s staff, technology, methodologies and reporting. In all cases, RPO differs greatly from providers such as staffing companies and contingent/retained search providers in that it assumes ownership of the design and management of the recruitment process and the responsibility of results.”[2]

Occasional recruitment support, for example temporary, contingency and executive search services is more analogous to out-tasking, co-sourcing or just sourcing. In this example, the service provider is “a” source for certain types of recruitment activity.[3] The biggest distinction between RPO and other types of staffing is Process. In RPO, the service provider assumes ownership of the process, while in other types of staffing the service provider is part of a process controlled by the organization buying their services.

One of the key differences between RPO and traditional outsourced staffing or recruiting is the process component.      In RPO the external agent assumes ownership of the process where in most current models the firm has the ownership.  The RPO model allows the firm to place the responsibility on the outsourced agent so that the firm may more fully focus on the business at hand.

We will leave this for today, but I’ll be back later this week to answer the following questions:

1.  What are the advantages of RPO?

2.  What are the disadvantages of RPO?

3.  Why would a firm use an RPO provider?

4.  What does an RPO process cost?

5.  How does a firm find an RPO provider?