With hiring on upswing across sectors, demand for recruitment process outsourcing is growing too

Hiring is a challenging yet extremely essential activity that every business spends a lot of time, money and effort on. Off late, many organisations, particularly in the IT sector, have been leveraging Recruitment Process Outsourcing (RPO) to drive hiring objectives and combat the rise in attrition.

Recruitment Process Outsourcing (RPO) is a workforce solution in which a business transfers all or part of its permanent recruitment activities to an external agency. While the concept of recruitment process outsourcing is nothing new, its adoption, especially in sectors that hire in big numbers, have been steadily increasing. Today’s RPO providers use talent analytics, recruitment technology and innovative sourcing strategies to get organizations the people it needs. They help companies source, screen, engage, hire and onboard the right talent while building business agility.

However, in a dynamic market environment with a significant talent demand-supply gap, it is imperative that the RPO provider has the ability to scale its operations to match changing business needs. The service provider’s ability to scale its own talent, to meet client requirements, and also source candidates with niche skills across multiple channels should be evaluated.

Outsourcing recruitment can help bridge the talent gap faster

With the global RPO market being forecasted to reach $20.8 billion by 2027, it’s especially vital for HR leaders to truly understand the quality of external partnerships. The expected talent demand surge in the near future also needs to be kept in mind. Today, nearly 25% of Global Fortune 500 companies have Global Capability Centers (GCCs) in India – not just for operation related roles but also for Research & Development roles. With this number expected to rise in the coming years, India needs to prepare for this growth potential and build talent supply chains proactively. Engaging with an RPO provider will help ease these talent hiring and managing activities, and bridge the gaping talent gap in the market.

Yet, many organisations often enter into multi-year RPO partnerships without knowing how to evaluate the engagement. Let’s delve into why some RPO partnerships fail and others succeed.

With the demand for the service on the rice, impact evaluation metrics need to evolve

Most RPO providers use two key parameters to measure their success: Cost to hire and time to hire. While these are essential metrics, they fail to consider a holistic and long-term scalable goal for the RPO. Being purely focused on processes for recruiting rather than building a robust talent supply chain is a short-sighted stratagem. As most RPO players aren’t experts in hiring, they don’t have the tools or network to tap into the right talent. Moreover, they often fail to factor in unforeseen growth and don’t budget for additional recruiters to fulfil sudden demands – a common occurrence in this dynamic market. This lack of future-focused planning and talent building, coupled with low executive buy-in and poor governance models often results in failed RPO partnerships.

When selecting a RPO provider, companies should not look for an outsourcing partner, but a strategic partner instead

There are a few important parameters to keep in mind before signing the dotted line with a RPO service provider –

  • Having the right team in-house with the ability to guide and build a robust talent supply chain

    Having an experienced project manager and team leader can make a world of difference to outcomes. They ensure that the RPO team is aligned with the organisation’s culture, business model, growth projections, compliance mandates and hiring needs. Moreover, they implement a strong governance model that gives transparency and control.

    Sourcing talent solely through job portals or professional networking sites will not build the right talent pipeline. Ensure that the RPO provider taps into unique hiring channels – Webinars, Hack-a-thons, Centers of Excellence, Campus Drives, and other proactive hiring initiatives – to tap into the best talent, anywhere in the country. They should also be equipped to scour talent from established technology hubs as well as fast-emerging tier 2 and tier 3 cities to access all the available talent supply.

  • Having a structured incubation and implementation structure
    Before an RPO engagement begins performing service level agreements (SLAs) is essential to benchmark hiring patterns, rejection criteria, and any other expectations along with timelines. This mapping is essential to align customer expectations with delivery capabilities. An agreed-upon incubation timeline should be set up to assess bottlenecks and make room for course correction. Setting up a solid foundation is the only way to build a dependable RPO program
  • Usage of efficient technology that provide actionable insights
    Technology is a key aspect of any RPO solution — be it yielding positive outcomes or causing inefficiencies. Too often, unnecessary technology can hinder the time to hire rather than expedite it. Ensure that any digital tools and platforms being used by the RPO provider help achieve transaction efficiency and improve the talent funnels. Many service providers promise dazzling dashboards and extensive reporting – but not all of it is relevant. Enforce clear analytics practices that offer actionable insights rather than copious amounts of confusing data.

RPOs should not be treated like just another commodity. Cutting corners and costs beforehand, would have a long-term adverse effect on the outcome. If done well, RPO can be a key asset for any organisation’s recruitment and human resources functions and the entire enterprise. However, this happens only when the relationship is a true partnership. When all elements are in place and people are motivated, the outsourced recruitment process can be used as an extension of the client’s own team to produce results in the form of cost savings and new hires.



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Disclaimer

Views expressed above are the author’s own.



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