What is an RPO?

Definition – RPO, -noun, abbrev. “Recruitment Process Outsourcing” – a form of business process outsourcing (BPO) where an employer outsources or transfers all or part of its recruitment activities to an external service provider.

History – Developed out of an historical circumstance, Silicon Valley’s highly competitive high-tech labor market of the 1970’s, fast-growing high-tech companies were hard-pressed to locate and hire the technical specialists they required. Rather than paying large fees to specialized recruiting agencies, they began to outsource difficult positions selectively. Consultative RPOs have gained ascendancy as a way to reduce overhead costs from a company budget while, at the same time, improving the company’s competitive advantage in the labor market.

Benefit – Economies of scale enable us to offer recruitment processes at lower cost while economies of scope allow us to operate as high-quality specialists. An RPO has a larger staff of recruiters, databases of candidate resumes, and investment in recruiting tools and networks. An RPO can expand services as necessary and retract when they are not needed obviating the high cost of full-time internal staff and the need to lay-off internal recruiting staff when activity is low. Unlike the internal human resources department with its many competing agendas, an RPO provides expertise and complete focus on talent acquisition.