What is Recruitment Process Outsourcing? A definition of RPO

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One of the best ways for companies to secure top talent is by outsourcing talent acquisition and recruitment. But, what is recruitment process outsourcing?

Since the early 2000s, when Recruitment Process Outsourcing (RPO) started developing as a business discipline, it never stopped evolving to meet the needs of the ever-changing recruitment market.

In its early days, only a few companies with large hiring volumes were courageous enough to try a new concept for their recruitment function. Most HR leaders were not comfortable with the idea of recruitment outsourcing, but this has changed over the years.

Over time RPO providers were evolving and developing deeper know-how, new tools, and better metrics to increase their delivery abilities. At the same time, the difference between RPO providers and staffing agencies became more distinct, with RPO providers becoming the advocates of their clients through finding talent in all possible channels. So they could increasingly reduce the cost of hire for their clients.

Now, 20 years later RPO has become a solid multi-billion service industry helping big and mid-size companies to leverage solutions, technology, and delivery to find and recruit the best talent around the globe. Time to look deeper behind the scenes of RPO.

What is Recruitment Process Outsourcing: Key Takeaways

We can define Recruitment Process Outsourcing as a form of Business Process Outsourcing (BPO) where companies transfer all or part of their recruitment processes to external service providers.
RPO enhances the hiring process by increasing talent funnels by 50% and reducing time-to-hire by 40%, with cost savings between 35% to 50%. Embedded recruiters ensure alignment with company culture, resulting in better hires and lower attrition rates.
RPO Models:
1. End-to-End RPO: Manages the entire recruitment process, from job opening to candidate closure, making it the most common model.
2. Hybrid RPO: Integrates with internal talent acquisition teams, optimizing recruitment efforts by combining internal expertise with external knowledge.
3. On-demand RPO: Provides immediate access to experienced talent acquisition partners, allowing organizations to scale recruitment support during peak hiring periods.
4. Project RPO: Engages a team of talent acquisition professionals for specific recruitment needs over a limited timeframe.
The global RPO market is projected to grow at an average rate of 18.68% annually, driven by increasing demand for effective talent acquisition outsourcing strategies.
As talent shortages become more critical, organizations view RPO as essential for maintaining competitive recruitment strategies and securing the necessary talent for future hiring needs.

Definition of Recruitment Process Outsourcing

According to the Recruitment Process Outsourcing Association (RPOA), Recruitment Process Outsourcing (RPO) is a form of Business Process Outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external service provider.[1]

The RPO provider is responsible for closing the open positions of a company in a timely and quality-driven manner. Many providers combine offsite service centers with onsite recruitment experts and use talent analytics, recruitment technologies, and innovative sourcing to win the right talent at the right time.

The purpose of RPO is to increase scalability, quality, and access to talent while reducing cost. With the right scope and set-up, an experienced RPO provider can increase talent funnels by 50%, reduce time to hire by 40%, and deliver cost savings between 35 to 50%.

The difference between recruitment process outsourcing services and traditional staffing agencies or headhunters is that RPOs take over the full process responsibility for all positions within the defined scope, while agencies or headhunters work on call to supply candidates for single positions.

Recruitment Process Outsourcing: Meaning of Pure-Play

The RPO market has seen in the past years the so-called “pure-play” RPO providers growing significantly. “Pure-play” in this context means that the RPO provider is completely independent and not a business line of a bigger staffing or headhunting organization. Pure-play RPOs can take on full advocacy for their clients without facing any internal conflict of interest (i.e., needing to feed the recruitment agency with positions).

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How Does Recruitment Process Outsourcing Work?

An RPO provider delivers the necessary experts, technology, and methodology to fulfill a client’s recruitment needs. Professional RPO providers work nowadays with a two-fold delivery model.

On one side, they operate centralized service centers, where they aggregate knowledge and technology to find and attract candidates for their clients and - also - bundle the administrative support.

On the other side, they embed dedicated recruiters into a client’s organization. They work from the client’s location and align with the hiring managers and HR.

This two-fold approach results in significantly better results in the talent acquisition function:

The centralized candidate sourcing allows a powerful use of technology and knowledge to provide more and better candidates
The embedded recruiters guarantee the link into the client’s business, culture, and environment
The offsite administration brings cost advantages and higher service quality.

What kind of RPO models are there?

End-to-end RPO

In an end-to-end RPO, the provider has the responsibility for the entire recruitment process: from the opening of a position to candidate sourcing, interviewing, offer management, and closing of a position. End-to-end RPO solutions can vary by their geographic scope - a single country, region, or the whole globe.

Or the RPO focuses on a specific business department, a function (e.g. IT), or covers all hirings across the organization. With around 75% of all RPO solutions, end-to-end models are the most popular because they have the biggest impact on scalability, access to talent, and reduced cost per hire.

HYBRID RPO

Hybrid RPO solutions integrate seamlessly with in-house talent acquisition teams, fostering a flexible and results-driven recruitment process. By combining internal expertise with external industry knowledge, this model optimizes recruitment efforts and enhances efficiency.

This approach allows organizations to focus their in-house teams on strategic hiring while external specialists handle specific functions, regions, or business units. With the agility to scale up or down as needed, Hybrid RPO offers a dependable solution for organizations facing recruitment challenges such as:

Limited internal team capacity
Constraints on team expansion
The need for scalable, cost-sensitive solutions
Advanced technology and resources for effective sourcing

Key benefits include seamless integration, better governance, cost-risk optimization, and scalability tailored to dynamic business needs.

On-Demand RPO

On-demand RPO provides immediate access to experienced Talent Acquisition Partners, delivering recruitment support precisely when needed. This flexible solution allows organizations to activate dedicated recruiters during peak hiring periods and deactivate support when demand subsides—avoiding the long-term commitments of traditional RPO models.

It’s ideal for businesses facing:

Rapid expansions or restructures with unpredictable hiring surges
High-volume recruitment needs that require agile solutions
Demand for immediate access to expert recruiters without escalating costs

Key features include on-demand scalability, fast access to talent, reduced time-to-hire, and seamless integration, all designed for cost-effective, efficient hiring process.

Project RPO

This solution allows an organization to engage a team of talent acquisition professionals for a limited period of time to handle a specific need for recruitment. This could be for launching a project or product, meeting an unexpected hiring demand, or solving a recruitment back-log.

What are the benefits of RPO?

Outsourcing talent acquisition and recruitment provides many benefits:

Better Talent

The RPO can provide the knowledge and technologies to source candidates by using crawling tools, artificial intelligence, and best practices in approaching and attracting the best candidates in every corner of the globe. Normally individual organizations do not have the volume and bandwidth to build a sourcing function on their own. Recruitment statistics indicate that companies now conduct 40% more interviews per hire, and some businesses cant handle the workload.

High-Quality Recruitments

Outsourcing the recruitment process assures that the specific needs and culture of the client are understood by embedding recruiters into the client’s organization. While the sourcing consultants are dedicated to the talent pipelining and candidate screening tasks, the onsite recruiters focus on selecting, advising, and contracting the best candidates for the client’s positions. This results in better hires and lower attrition

Robust RPO Process

RPO works with a full set of Key Performance Indicators (KPIs) to manage and adjust recruitment performance on a daily, weekly, and monthly basis. By continually measuring the KPIs, such as the speed of the process, quality of the candidate pipeline, cost per hire, and satisfaction of both client and candidates, the RPO provider maintains high performance in delivery. Clients can control this through Service Levels and will receive transparency through the relevant reporting schedule.

Cost-Effectiveness

One of the key benefits of recruitment process outsourcing is that pricing models are based on volume and success. We at Serendi call this transactional pricing. There should be no fixed fees or monthly retainers—the RPO fees should follow only two factors: the number of positions managed (volume) and the channels used for closing a position (success). Instead of having high fixed costs for in-house teams in the P&L, clients will benefit from a flexible cost structure that follows their true recruitment needs.

To summarize, outsourced recruitment services are well-suited for businesses:

that have a continuous hiring need
want to hire the best available talent (and not just fill a position)
expect high quality in the recruitment process
need to control costs

The Future of RPO

To truly understand what is recruitment process outsourcing, one must consider the evolving talent acquisition trends and future prospects. RPO is a growing industry. Traditionally, big companies used RPO services only to reduce their recruitment costs. Today, as the shortage of talent is becoming imminent, companies understand that if they cannot keep up with the competitive pace of talent acquisition, they might stay without the talent they need for their economic future.

Everest Group’s annual RPO report states that RPO is the fastest-growing HRO market with a 20% growth rate.[2] A recent study projects that the global RPO market will experience an average annual growth rate of 18.68% between 2024 and 2028.[3]. When it comes to RPO for Europe, the market is expected to expand at a CAGR of 18.8% through 2026, driven by the rising adoption of recruitment process outsourcing solutions across the region. (4)

Find out more about recruiting across regions on our Recruitment Process Outsourcing Poland and Recruitment Process Outsourcing Netherlands pages.

The future world of recruitment process outsourcing will be driven by three main developments:

Technology for identifying, attracting, and selecting the best talent
Providers bundling more and more expertise, as we can see in the current trend towards pure-play RPOs
Flexible pricing with the elimination of fixed costs

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What is Recruitment Process Outsourcing: Conclusion

RPO has become a powerful tool for businesses to enhance recruitment efficiency, access top talent, and reduce costs. With tailored solutions like end-to-end, shortlisting, or project-based models, RPO provides the expertise and technology needed to meet complex hiring demands. As the global talent market becomes more competitive, RPO offers the scalability and flexibility companies need to stay ahead.

About the author:

Fiona-Sophie Grube is the Chief Development Officer at Serendi.

She builds on more than 15 years of experience in talent acquisition and recruitment with more than 25 international clients for setting the framework for Serendi’s RPO delivery strategy and operations.

What is Recruitment Process Outsourcing: Frequently Asked Questions

What is outsourcing in recruitment?

Outsourcing in recruitment refers to the practice of delegating specific recruitment tasks or the entire recruiting process to external providers. This can involve utilizing external resources for sourcing candidates, managing job postings, conducting interviews, and other related activities. By outsourcing these functions, organizations can improve their recruitment strategies, reduce time-to-hire, and access a broader talent pool without overburdening their internal recruitment teams.

What is recruitment process outsourcing?

Recruitment Process Outsourcing (RPO) is a strategic approach where an organization transfers all or part of its recruitment processes to an external provider. This can include various stages of the hiring process, such as sourcing, background checks, screening, interviewing, and onboarding qualified candidates. RPO allows companies to leverage specialized recruitment solutions and expertise from external providers, enhancing their overall recruiting process while enabling internal recruitment teams to focus on core business functions.

How is RPO different from recruiting?

RPO differs from traditional recruiting in several key ways. First, RPO involves a partnership with external providers who bring specialized knowledge and resources to enhance the recruiting process. This allows organizations to implement more effective recruitment strategies and access advanced technology for talent acquisition. Additionally, while traditional recruitment often relies heavily on internal recruitment resources, RPO provides a scalable solution that can adapt to future hiring needs and fluctuations in demand for qualified candidates. Ultimately, RPO aims to streamline the recruiting process while improving efficiency and candidate quality.

What is the difference between RPO and BPO?

While both Recruitment Process Outsourcing (RPO) and Business Process Outsourcing (BPO) involve delegating tasks to external providers, they differ in scope and focus. RPO specifically pertains to the hiring process, concentrating on recruitment functions such as candidate sourcing and selection. In contrast, BPO encompasses a wider range of business processes beyond recruitment, including finance, customer service, and IT services. So, what is recruitment process outsourcing? Essentially, RPO is a subset of BPO that focuses solely on recruitment-related activities.