The Birth and Evolution of the RPO Solution

by Preeti Lokagariwar

As organizations grow, staffing complexities follow. However, talent acquisition has morphed into a highly complex and specialized function that human resources departments may need assistance with managing. It demands a lot of time and expense from hiring managers and HR teams alike, and it can directly impact an organization’s bottom line.

Leading up to the dotcom era, what was in the past an important part of the HR function became the unruly child that demanded a lot of time. This transition was in part due to (1) the demand for and supply of a highly specialized and skilled workforce in bulk and (2) the need to be able to separate the wheat from the chaff for the lowest possible cost. This new function proved expensive, hard to maintain, and inconsistent in delivering a skilled workforce in bulk. These complexities led to the birth of the Recruitment Process Outsourcing (RPO) process.

A mantra rose during the dotcom bubble: form partnerships with specialized staffing firms if you need consistent delivery of skilled workforce on a large scale, at a competitive price. This idea was essentially built on the BPO model of those days. It was driven by the necessity to reduce the cost of hiring a skilled and specialized workforce. By 2010, the normalization of technology and the low cost of RPO (saving companies 30-50% in recruiting costs) led to it becoming a major staffing solution. Soon, large providers began competing in this space and two types of RPO solutions emerged: blended and pure. Blended solutions involved the employers transferring a part of their recruitment needs to an outside provider. The pure RPO solutions on the other hand, were typically designed around the vendor assuming complete and 100% ownership for an employer’s recruitment needs.

Today if you are having recruiting challenges, people love to ask, ‘have you tried the RPO solution?’ But RPO may not always be the right solution for you. Various parameters determine whether an RPO solution could be a good fit. These include items such as the presence of an in-house recruiting team, the annual job count, your cost per hire ratio, the amount of your annual recruiting budget, and the skill level required of the resources that need to be sourced. For example, if you are a small organization with 20 employees and only a few specialized job openings a year, it might not be a good solution for you. But if you have over 200 employees and no real recruiting solution in place, it could definitely be a game changer. RPO’s appeal is its ability to push the cost down for bulk hires, build a strategic partnership with partners, channel technology effectively and meet the demand for a highly skilled workforce quickly at low cost.

RPO is constantly evolving. A new trend is for large organizations to nurture multiple specialized RPO providers to create diverse pools of specialized talent banks within an individual organization. As solutions go, RPO can be an excellent solution if it is managed well and the transfer of knowledge between the provider and client is smooth. The keys to its success are the provider’s ability to blend and assimilate with the client’s environment and the client’s ability to nurture the partnership with the provider while keeping lines of communication open. Only then does this co-dependent relationship produce fast, accurate and healthy results.

About the Author

Preeti’s forte in global talent acquisition in the areas such as finance & accounting, IT, engineering, sales and operations. With over 15 years of global talent delivery experience, she is known for her ability to find innovative solutions to challenging situations.

Connect with Preeti on LinkedIn or reach out at preeti.l@gavatalent.net.

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