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Today’s hiring landscape has become more complex, presenting recruiters and hiring managers with new challenges and opportunities. As high-performing candidates set higher standards for their next job and companies build workplaces grounded in diversity, equity, and inclusivity (DEI), recruitment has evolved from being transactional to a strategic and transformational aspect of employment.
As expected, there is a surge in demand for recruitment process outsourcing (RPO). According to a 2022 data reported by Grand View Research, RPO services had a market size of around $7.33 billion USD, with North America contributing 41.2% of revenue share in the same year. These numbers reflect the reliance of companies on RPO providers to address discrepancies in recruitment.
When outsourcing recruitment, you have two choices: an RPO or business process outsourcing (BPO). This begs the question: Is one better than the other? This article explores the strengths of RPO with traditional BPO.
RPO is a type of BPO in which clients outsource talent acquisition and other recruitment functions — whether in part or in full — to a third-party service provider. Although this strategy is typically associated with closing job openings, RPO can overhaul a company’s talent acquisition process and hiring initiatives by analyzing its KPIs and metrics, from cost of hiring to turnover.
Below are seven advantages of working with an RPO:
According to The Josh Bersin Company, the average time-to-hire in 2023 is 44 days. However, clients working with an RPO company can see reductions in hiring times by as much as 40%. For companies in competitive industries, a shorter time-to-hire is key in attracting the best candidates in the least amount of time.
Candidate sourcing is the most tedious aspect of recruitment — but RPO companies are built differently. Equipped with the best sourcing strategies, RPO providers can tailor job postings for a specific job search platform and effectively screen candidates who fit their clients’ hiring preferences.
Job descriptions make or break recruitment. RPO providers can craft unique yet succinct and engaging job advertisements that realistically highlight the role’s qualifications and major responsibilities. This increases the likelihood of high-caliber candidates applying for the position.
No employer wants to work with someone with a sketchy background. Background checks typically take around four days, or even as little as two days. However, the process can extend to seven days or more depending on the candidate and the company.
Since RPO companies have a dedicated (and reputable) background check provider, they can reduce background check times and hire candidates faster — preventing delays in hiring timelines.
DEI is one of the pillars of success. To help businesses achieve their DEI goals, RPO companies train clients on diversity and inclusivity, identify DEI issues, and create inclusive recruitment strategies. In some cases, RPO providers can leverage their own network or access minority-targeted recruitment platforms, so clients can hire talent from diverse groups.
More than ever, technology has become the backbone of human resources. RPO companies come prepared with the software essentials. One such example is the Applicant Tracking System (ATS) — a solution that simplifies the screening of candidates and scheduling of interviews, extracts resume content, and provides data-driven insights into recruitment metrics.
They also have a Candidate Relationship Management (CRM) tool for building and maintaining professional relationships with potential candidates. These software solutions include automated and AI-powered features to modernize hiring processes, minimizing human biases and errors while promoting efficiency across the board.
Regulations are constantly evolving, and it’s the RPO company’s job to keep abreast of regulatory changes. When businesses partner with an RPO service provider, they can maintain compliance when hiring.
As mentioned earlier, RPO is a form of BPO service. Meanwhile, BPO refers to services that include not just outsourced human resources but also outsourced customer support, content creation, and back-office support, to name a few. In short, a BPO company’s services are more diverse and less specialized than those of an RPO provider.
This section further explores other key differences between the two business models.
RPO services center on talent acquisition initiatives, which include consulting, candidate sourcing, interviewing, and employer branding. This means RPO companies only target HR departments.
Alternatively, BPO services are broader, spanning from accounting to digital marketing. Unlike RPO, BPO can support multiple departments. BPO is suited for clients who need more versatile support.
While RPO services streamline HR functions, they can also help companies attract qualified candidates faster and retain them for longer — improving a company’s employee life cycle and reducing recruitment costs.
Like the latter, a BPO provider optimizes processes for efficiency, freeing up their client’s internal team from non-core tasks. Beyond efficiency, outsourcing companies can also boost website traffic, close more leads, and reduce errors. Additionally, clients outsourcing to developing countries can enjoy reduced labor and overhead costs.
RPO providers collaborate with the client’s HR department. By working closely with the HR team, RPO companies can provide the necessary feedback and support on their clients’ recruitment pipelines as well as ensure alignment on future goals and initiatives.
BPO also involves collaboration between the client and service provider. Throughout the RPO partnership, the client conducts performance reviews and schedules regular check-ins for continuous improvement and accountability.
There are different types of RPO models:
Hybrid RPO is ideal for companies in dynamic hiring landscapes. With this model, clients can take advantage of on-demand assistance, long-term support, and business continuity.
Likewise, BPO has four types of outsourcing models:
The onshore model is for clients who want to work with outsourcing companies that already possess knowledge of the local market and regulations. It’s also great for companies that prioritize timely communication and smooth collaboration between in-house and outsourced teams.
However, clients can save more on nearshore outsourcing so long as they outsource to a neighboring country with cheaper labor costs. Overall, nearshore outsourcing is ideal for businesses that want to diversify their teams while maintaining oversight and proximity.
Further, offshore outsourcing results in bigger cost savings and wider access to a specialized talent pool, allowing businesses to fill job positions faster with minimal financial strain. The opportunity to work with offshore staff from diverse cultures can also help meet DEI goals. Offshoring is a viable outsourcing model for businesses that want strategic — not just cost-effective — partnerships with overseas service providers.
This model is great for companies that want to play on the expertise of their in-house and outsourced staff members while maintaining flexibility and cost savings.
Outsourcing HR and recruitment to a third-party provider can be the best decision you can make for your business. Between KDCI Outsourcing and a dedicated RPO company, both are equally good choices, as they offer valuable advantages.
Before you outsource talent acquisition, it’s important to identify your hiring needs so you can select the best provider for your company. Let’s take a look at what KDCI and an RPO provider bring to the table.
KDCI Outsourcing — a Philippine-based BPO firm — specializes in offshore outsourcing. Hence, you’ll only be working with Filipino HR professionals and project managers. KDCI’s offshore model promises not just operational efficiency, but also cultural compatibility with your team.
RPO service providers offer multiple RPO models. For example, if your HR team is currently swamped with an influx of recruitment tasks — especially during hiring seasons — then a project-based RPO is the most appropriate model. In terms of talent diversity, RPO is much preferred, as the service provider and client can pool talent worldwide, not just from a single country.
Outsourcing to KDCI is easy and takes out the guesswork of hiring:
Nevertheless, regular communication with your offshore team helps maintain optimal performance and alignment on goals and expectations.
Outsourcing to an RPO company works similarly as above, albeit with small differences:
KDCI Outsourcing’s offshore services leverage AI and automation to streamline recruitment tasks, from screening to talent analytics. The company also sources HR professionals who are proficient in various HR platforms and solutions — including Bamboo HR, Workforce Now, and Workday — so they can provide immediate recruitment assistance.
Like KDCI Outsourcing and other BPOs, RPO companies integrate technology into a client’s recruitment efforts. When partnering with an RPO service provider, expect its services to come bundled with an ATS, a CRM tool, and a Vendor Management System (VMS), along with chatbots and AI tools for optimizing recruitment tasks.
At the end of the day, it’s up to you. To help you out, here are factors to consider when choosing between KDCI and an RPO service provider.
Choose KDCI if you:
Choose a dedicated RPO company if you:
Hiring is a strategic endeavor, not a game of impulsive decisions. If you’ve grown sick and tired of bad hires costing your company time and money, consider outsourcing recruitment to KDCI.
KDCI builds high-caliber recruitment teams that not only demonstrate deep knowledge of hiring trends and advanced HR technologies, but also implement actionable hiring strategies that elevate your recruitment game — so every new employee is both the right fit and a valuable asset to your company.
Ready to hire smarter with KDCI? Get in touch with our outsourcing expert today!
