Challenges of Recruitment Process Outsourcing

Despite the availability of a huge pool of talent, why do so many companies still find it hard to find talent? A probable answer lies in the way companies manage their talent acquisition and recruiting activities.

Back in the 80s and 90s, when companies began to see significant cost-savings by outsourcing their employee benefits and tax functions, they also realized that recruitment was eating up a major portion of their revenue. Thus was born the Recruitment Process Outsourcing (RPO) model, in which companies outsourced their entire recruitment function to third parties.

While recruitment process outsourcing has been around for many years and has proven to be tremendously successful for several companies, there are many more businesses that still find it difficult to make the choice between handling the recruitment function in-house or outsourcing to an RPO provider, while also wondering if there is yet a better alternative.

If your organization is looking for strategic ways to manage its hiring needs, recruitment process outsourcing might be a good option for you—or it might not. It’s important to weigh the benefits and challenges of recruitment process outsourcing to understand if it’s right for you, or if alternative solutions could work better. Let’s examine these benefits and challenges, while also examining modern alternatives, such as programmatic recruitment.

Benefits of Recruitment Process Outsourcing

Critics of recruitment process outsourcing cite loss of control over the recruitment process as a major drawback of outsourcing to an RPO provider. However, if managed well, this perceived lack of control can be a blessing in disguise, and the whole process of outsourcing can prove to be a successful strategic move. Let’s see how.

1. Less transactional, more strategic

An RPO service provider does not merely fill open positions but strives to improve your entire recruitment process.

A good service provider works with your internal teams to understand your organization’s culture and values and incorporates this understanding in the candidate search process.

Typically, RPO service providers work with clients for several years on an ongoing basis, constantly examining turnover rates, time-to-hire, quality of hires and scalability, and finding ways to improve these metrics.

They also build your organization’s brand as an employer, enticing candidates to consider a career with you. And once on board, they endeavor to provide a superlative candidate experience, highlighting the positive aspects of your organization.

2. Cost-effective

Every business experiences highs and lows in recruitment needs. Transferring the responsibility of expanded recruiting needs to a dedicated RPO service provider helps reduce unforeseen delays in the recruitment process, thus decreasing time-to-hire and cost-per-hire. When your recruitment needs shrink, your RPO vendor is in a better position than your organization to divert resources to other areas.

Since RPO service providers have streamlined processes in place for recruitment, they are able to achieve scalability in terms of recruitment spending—job advertising, applicant tracking systems, background screening and other recruitment technology—effectively passing on these savings to the client.

3. Better quality of hires

RPO providers typically have areas of specialization in terms of the industries they serve. They maintain an extensive pipeline of active and passive candidates, who are thoroughly vetted and well-matched to their client’s culture. They use innovative sourcing strategies to engage passive candidates that the client may not otherwise be able to reach. Consequently, the client is able to hire well-qualified candidates, thus improving the overall quality of hires.

Challenges of Recruitment Process Outsourcing

Most of the time, recruiting process outsourcing works well and yields the expected results. However, occasionally, the process fails to deliver, due to common challenges of recruitment process outsourcing which have a cascading effect over time. 

1. Unclear understanding of what RPO is

A lot of temporary staffing agencies and remote recruiters call themselves RPO service providers when, in actuality, they are not. Hiring them seems like a cost-effective option and might even prove successful for entry-level roles. But it might not always work in the long-term, especially while recruiting for senior and executive-level roles that require highly-qualified and well-matched candidates. Since recruitment process outsourcing is more than just filling open positions, it is necessary to conduct due diligence about the service provider prior to outsourcing.

2. Lack of communication

Employees are living embodiments of a company’s vision, mission, and values, which is why the right ‘fit’ between the company and its employees is so important.

If the RPO vendor does not understand and have a clear picture of the client’s culture and image, the matching of candidates, and hence the quality, suffers.

And the whole purpose of outsourcing the recruitment process proves futile.

In order to overcome this, organizations would benefit from being transparent and keeping the communication channels open, in real-time, considering that these service providers are brand ambassadors and the face of the company in the candidate market.

Programmatic Recruitment Advertising: A Better Alternative

A lot of businesses have made the RPO model work for them by managing their expectations and relationships with service providers successfully and avoiding the usual pitfalls associated with outsourcing. However, when it comes to your individual scenario, you may find the challenges of recruitment process outsourcing to outweigh the benefits. In these situations, it’s important to understand what options can give you what you need.

One solution is automation. Almost every organizational function has had some level of automation affecting it over the past couple of decades. HR seemed to be a function untouched by it. However, over the last couple of years, there has been a growing interest in automation of the HR recruitment process as well.

One such technology, termed programmatic recruitment advertising, aims to overcome some of the common difficulties associated with finding talent.

Programmatic recruitment advertising attempts to target the right candidates, at the right place (online) and at the right time.

Using data science, machine learning, artificial intelligence and predictive analytics, it aims to provide more relevant job opportunities to candidates in real-time. It optimizes where, when and how organizations are able to reach candidates, thus offering enormous savings in time and money.

Programmatic recruitment advertising can boost a conversion rate of 5X compared to traditional recruiting. So, if better candidate-matching and more control over the recruitment processand recruitment spendingare your priorities then programmatic recruitment advertising might be the best option for your organization.

Ready for a demo of PandoLogic’s programmatic recruitment software?

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