Discuss about the Recruitment Process Outsourcing.
While outsourcing essentially initiated as a strategy for reaping cost savings particularly in context of non-core functions, but over the last decade or so it has developed itself into a strategic tool responsible for competitive advantage. One of the prime facilitators of the same is the limited availability of skilled manpower and the global availability of the same. Further, in the knowledge economy, skilled manpower tends to be key differentiator for which firms have to scout globally. In this regard, RPO or Recruitment Process Outsourcing gains significance. RPO may be defined as a sub-category of BPO (Business Process Outsourcing) where the recruitment function is outsourced to an external agency which is rendered the responsibility of hiring skilled employees for the employer (Klaas, McClendon & Gainey, 2001).
Besides, cost savings RPO provides free time to HR managers which thus could be used to focus their attention on designing key HR strategies so as to enhance the overall satisfaction level of employees which would lead to higher productivity and retention. RPO as a process has been facilitated by the increasing focus of the management on talent management which essentially begins with recruitment. As a result, the HR managers globally have cashed upon outsourcing as a strategic option which could essentially improve talent management as a whole (Nelson and Gerard, 2005). Besides, it is critical to consider that in the globalised recruitment field, there are significant overhead costs which are often not noticed by the employer. But through the hiring of an agency in the RPO, it is comparatively easier to highlight and measure these costs which are otherwise hidden and thus uncontrollable (Mazur & Kleiner, 2002).
Besides, with the geographical spread of multinational organisations, it becomes essentially difficult for the employers to integrate all the requisite information so as to enable proactive workforce planning which indicates the estimated demand based on which recruitment needs to be periodically held. This is achieved through RPO whereby a dedicated agency is able to form an integrated platform for talent management (Stroh & Treehuboff, 2003). This allows the HR personnel to save their crucial time and also allow for better hiring decisions so as to ensure that there is no shortage of requisite manpower while minimising the employees kept as buffer. An RPO can also provide a thorough analysis to the employer with regards to the job market and prevailing compensation and incentives that are being offered by other players. This information enables the employer to benchmark the compensation and related incentives being offered and allow them to make requisite changes in a timely manner so as to attract the best talent in the industry without overpaying (Shelgren, 2004).
The methods deployed by the agency hired in the RPO tends to provide specialised knowledge about the appropriate tests to be considered to check specific skills the availability of manpower in line with the expectations of the employer. The specialist agency can enables the employer into highlighting the potential sources of candidates based on their underlying skill requirement. As a result, the RPO seems to a superior alternative in comparison with the available traditional hiring mechanism which the employer would otherwise use with lesser efficiency. Besides, being a specialist in recruitment services, the RPO agency could provide exposure to global best practices in terms of hiring to the employees besides ensuring that the organisation is not constrained by geographical parameters and is able to hire global talent (Nelson and Gerard, 2005).
Having explored the benefits of RPO, it is imperative to shed light on the underlying process which is essential so as to be able to reap the above. The RPO process begins with the meeting between the employer and the specialised agency which is undertaken primarily to understand the requirements of the employer. Based on the underlying requirements, the underlying job description and specification is decided based on inputs from the employer. Further, with regards to the compensation to be offered, discussions are held with the HR executives of the employer and market trends are highlighted so that the employer can design suitable packages with inputs from the agency. Once this done, advertisements are placed through requisite sources where the chances to reach the desired candidates would potentially be the highest. Based on the responses and applications received by the interested candidates an initial screening is performed by the agency based on the criterion provided by the employer (Masinovic, 2010).
Initial interview is arranged by the RPO where the company HR personnel along with subject experts are invited so that further screening of the candidates can be done. Additionally, another round of HR interview and other tests (such as psychometric) may be held in assistance with the representatives of the employer which would enable them to finally select the best candidates. In the process of final selection, the agency provides key inputs based on their expertise and experience so as to help the employer make prudent choice (Shelgren, 2004). This is imperative since there are significant training costs that the employer invests on employees and as a result it is essential that the employees should stick around (Prowse & Prowse, 2010). The agency issues offer letter to the selected candidates and also communicates with them with regards to their joining date and other formalities that they need to fulfil. As a result, it is evident that the RPO agency clearly plays a pivotal role as a mediator between the employer and the candidates while ensuring benefits for both parties involved (Ordanini & Silvestri, 2008).
Based on the above description, the flow diagram of RPO is shown below.
It is noteworthy that even though RPO is gaining higher acceptance and popularity but the key aspect for the success of this endeavour is the level of communication and coordination between the client and RPO agency. This would ensure that the client would be able to reap the benefits of specialised knowledge possessed by the agency. Also, it would enable that the agency would be able to provide relevant services to the client which would ensure long term relationship and mutual gains for the involved stakeholders (Stroh & Treehuboff, 2003). Considering the potential gains that are on offer by RPO, it may be concluded that in the near future, it is expected that this trend would increase further so as to build competitive advantage in an increasingly competitive business place (Shelgren, 2004).
Klaas, B. S., McClendon, J. A. & Gainey, T. W., (2001), Outsourcing HR: The impact of organisational characteristics, Human Resource Management, 40(2), 125- 138.
Mazur, M., & Kleiner, B. H. (2002), How to hire employees effectively, Management research news, 25(5), 21
Ordanini, A., & Silvestri, G. (2008), Recruitment and selection services: Efficiency and competitive reasons in the outsourcing of HR practices, The international journal of human resource management, 19(2), 372-391
Prowse, P. & Prowse, J. (2010), Whatever happened to human resource management performance?, International Journal of Productivity and Performance Management, 59(2), 145-162.
Masinovic, D. (2010), RECRUITMENT PROCESS OUTSOURCING AND ORGANISATIONAL CULTURE, CONNECTING THE DOTS, Retrieved December 23, 2016 from https://www.diva-portal.org/smash/get/diva2:357986/FULLTEXT01.pdf
Nelson, T. and Gerard, B. (2005), Recruitment Process Outsourcing: Transforming End-to-End Talent Acquisition, Retrieved December 23, 2016 from https://www.google.co.in/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwiW5ceN9onRAhWHOo8KHXdXDWAQFggeMAE&url=http%3A%2F%2Fwww.kornferry.com%2Finstitute%2Fdownload%2Fdownload%2Fid%2F17084%2Faid%2F184&usg=AFQjCNEcEbK0KhDlzErm4Al6Yj9G5USshA&sig2=O53wb9WgrY941pqhuYJphg&bvm=bv.142059868,d.c2I
Stroh, L.K. & Treehuboff, D. (2003), Outsourcing HR functions: when – and when not – to go Outside, Journal of Leadership and Organizational Studies, 10(1) , 19-28.
Shelgren, D. (2004), Why HR outsourcing continues to expand, Employment Relations Today, 3(2), 47-53.