Friday, May 16, 2014

What is RPO (Recruitment Process Outsourcing)?

Sharing a write up I did previously. Many people know about in-house recruiters that are directly employed by a company. This post will cover a lesser-known recruitment type, RPO.
RPOs have similar functions to a standard recruitment agency, but there are major differences between the two.
Major differences between an RPO and a standard recruitment agency:
  • Representing the Account
  • Responsibilities and Access to ATS (Applicant Tracking System)  
  • Payment Structure

Representing the Account

An RPO is similar to a recruitment agency, but the employees there have the privilege of representing themselves as the account they work on to candidates. Example provided below.

Recruiter working for a regular recruitment agency hiring for a position at

“Hi. My name is David from XYZ agency and I have a position that you may be interested in.”

Recruiter working at an RPO on the account:

“Hi. My name is David. I'm working with Amazon's (or any other big name) recruitment team and I have a position that you may be interested in.”

The difference is small between the introductions, but it makes a large difference to the candidate especially if it is from a well known company. In the recruitment business it can mean either the start of a conversation, or being promptly cut off with a dial tone.

Responsibilities and Access to ATS (Applicant Tracking System)

RPOs work to promote their account. This ranges from creating news letters, candidate pipelines, and job postings. In addition to this we have full access to the client's ATS. An ATS is the system that resumes and contact information funnel into once candidates have applied to a position. Having access to a client's ATS is one of the reasons why RPOs can disclose specific job postings and companies versus agency recruiters who do not disclose this information.

Payment Structure

Agencies and RPOs both receive payment on positions they fill. A major fear of an agency recruiter is a candidate finding the company's job posting and applying directly. In this way the agency does not get paid unless they presented the candidate's information to the hiring manager before the candidate applied themselves. RPOs on the other hand freely disclose how to apply directly, in fact applying directly is a part of the process of getting hired.

RPOs charge a flat rate for the position that is being filled, it doesn't matter if the candidate found the position by themselves, an internal employee referred them, or even if the hiring manager referred the candidate (yes, this one is quite the easy hire). The amount charged per position depends on the seniority of the position, but it is usually several times less than the 20%-30% of a first year salary that recruitment agencies usually charge.

I hope this broad explanation of an RPO and how they are different from recruitment agencies has helped those that are interested in the subject.