Article: Recruitment Process Outsourcing: The next big thing

Talent Acquisition

Recruitment Process Outsourcing: The next big thing

The current valuation of the RPO industry in India is Rs 400 crore and is expected to grow at a rate of 40-50 per cent
Recruitment Process Outsourcing: The next big thing

When organizations outsource their recruitment process, they save as much as 40 per cent of their recruitment costs


2015 will see a spurt in hiring in the range of 15-20 per cent owing to rapid business growth in India, according to a number of media reports. Meeting hiring demands of rapidly scaling companies is not an easy feat. Therefore, companies are turning towards specialized partners to support them with hiring the right talent.

Outsourcing has been a part of the workspace for a number of decades. The use of external suppliers for essential but ancillary services might be termed the baseline stage in the evolution of outsourcing. The model for most of the 20th century was a large integrated company that can ‘own, manage, and directly control’ its assets. In the 1950s and 1960s, the rallying cry was diversification to broaden corporate bases and take advantage of the economies of scale. Subsequently, organizations attempting to compete globally in the 1970s and 1980s decided to increase their flexibility and creativity. Core and critical processes were handled in-house, while the rest were outsourced. Outsourcing has been part of the fibre of corporations for years, however, it was formally identified as a business strategy post 1989 (Mullin, 1996).

According to recent reports, more than 70 per cent of Indian employers are likely to outsource the recruitment function either partially or completely. The current valuation of the RPO industry in India is Rs 400 crore and is expected to grow at a rate of 40-50 per cent. When organizations outsource their recruitment process, they save as much as 40 per cent of their recruitment costs. The experience, expertise and economies of scale of a partner can help companies improve the quality of recruits along with an overall faster process.

As I have observed over the years, the HR function in companies is diversifying and RPO is closely related to it. Today HR has evolved from a mere support function to a strategic function geared towards organizational development and hence the axiomatic need to focus on key functions. The advent of outsourcing opened the doors for companies to channel their energies on the redefined core HR undertakings.

If you look at the global scenario, companies have already recognized and have widely accepted RPO. The trend is now catching up in India as is evidenced by the growth numbers. I am sure the HR readers will agree that recruitment is a time, people and process intensive activity. Therefore, by using external specialized partners, which offer recruitment along with domain expertise, companies can now choose to outsource a part of or the entire recruitment process from sourcing to on-boarding.

Even the media has given due notice to recruitment process outsourcing and there was recently an article in Hindu Business Line titled, ‘RPO is an emerging trend for 2015’, quoting the top three growth drivers for the RPO boom in 2015 to be the need for organizations to enhance quality, reduce cost and increase speed of hiring.

Outsourcing Advantages

Here are some of the advantages that RPO brings to the table:

  1. Staffing flexibility
  2. Acceleration of projects and quicker time to market
  3. High calibre professionals who hit the ground running
  4. Ability to tap into best practices
  5. Knowledge transfer to permanent staff
  6. Cost-effective Solutions
  7. Predictable expenditures
  8. Resource and core competency focus

Why do companies today need RPO?

A good argument can be made for the need of RPO in companies. It decentralizes work and helps companies concentrate on their core competencies. RPO professionals help employers in not only sourcing talented candidates, but also in positioning the right candidate at the right place. By enhancing the capabilities of in-house recruitment teams, the RPO process can accelerate an organization’s ability to attract and retain top-performing employees, thereby improving the overall company performance. An organization when it is expanding may launch a new product or acquire entities that would require them to add a large number of employees on an almost impossible schedule, perhaps at various locations. Ramping up and deploying an in-house HR team may not be a feasible solution. In such a case, RPO provides a turnkey, cost-effective solution.

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Topics: Talent Acquisition, #TalentAssessment

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