Part 1 – Understanding the 3 distinct levels of Recruitment Process Outsourcing

Several recent discussions with prospective and current clients triggered the idea for this blog topic, which I will write about over the next few months. The term Recruitment Process Outsourcing is pretty broad, and can refer to a number of different activities. Even after providing solutions for 14 years, I’m sometimes confused by what I read about RPO. And some of it I wrote!

Here’s how I defined Recruitment Process Outsourcing along with the RPOA (Recruitment Process Outsourcing Association) back in 2009:

“Recruitment Process Outsourcing is when a provider acts as a company’s internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through the onboarding of the new hire, including staff, technology, method and reporting. A properly managed RPO will improve a company’s time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance.”

Understand? Maybe. But what if a company outsources only part of the recruiting/hiring process, such as resume searches? Is that an RPO project, or just a vendor or contractor engagement? How about if you don’t require assistance with interviewing or background checks? Is this still RPO? It’s time for better definition.

Having a solid understanding of RPO is important so you can set the right expectations, better identify the right type or types of RPO providers and effectively choose the right partner(s). Here is a way to define RPO by breaking it into three distinct levels. Please understand that there is no right or wrong answer here, just definition.

1st Level RPO

You have a hiring project and need a list of candidates based on specific hiring criteria. An example of this may be the opening of that new call center I mentioned in the 5 Questions to Ask blog. 1st Level providers are often technology companies, with many located offshore. They rely on technology such as internet search and resume parsing tools to deliver candidates based on specific content included in the candidate resumes. The approach is more rigid, but it works.

2nd Level RPO

Your hiring initiative requires a list of qualified candidates for each position, not just a stack of resumes. 2nd Level includes everything from the 1st Level above, plus a screening component. 2nd Level providers will find the candidates, and then conduct a live or technology-based interview to qualify them and confirm some degree of interest. Your organization then chooses the best candidate(s) and starts the onboarding process. This approach is less rigid, but still requires only minimal deviation from the standard model.

3rd Level RPO

Your hiring initiative requires assistance with more of the recruitment process, from candidate search through hiring and onboarding, to deliver employees ready to hit the ground running. Also called RPO 3.0SM, this includes everything from the two levels above, plus some degree of outsourcing across the complete recruiting continuum. RPO 3.0 providers must form a more strategic partnership to align their results with organizational objectives. Reporting also tends to be more strategic, based on factors such as the cost of vacancy, competitive influence, and employee lifetime value.

To remain neutral here, there’s no best approach to RPO, only the best approach to your specific needs at the time you require recruitment assistance. You don’t need RPO 3.0 for every situation, but conversely don’t hire a 1st Level provider if you have a 3rd Level initiative.

That said, each provider has their primary expertise at one of these levels. While it is possible for a 1st Level provider to offer a 3rd Level solution and vice versa, you are now taking providers out of their core competencies. Sorry, that’s just the way it is. Once size doesn’t fit all, at least in RPO.

These are very high-level definitions of the 3 Levels. Please share your feedback as you decide how to approach your recruitment projects and initiatives, and I will incorporate more detail and real-life experiences as we continue to demystify RPO.

You are what you measure.