The Recruitment Process Outsourcing (RPO) market has grown remarkably due to certain driving factors. Chiefly amongst these factors are the possibilities of cost savings through economies of scale and efficient recruitment processes. These enable businesses to use their resources more effectively. Furthermore, RPO boosts recruitment efficacy by minimizing time-to-hire and refining the recruitment process.

This does not necessitate dispensing with your in-house HR department. Rather, outsourcing recruitment tasks can greatly reduce the workload of your HR department. This allows them to redirect their focus towards equally important facets such as employee development and retention. Professional RPO providers have their unique ways of improving company efficiency and productivity. These providers free the HR departments to manage internal issues more effectively.

Additionally, companies can considerably cut down their recruitment expenses by engaging an RPO provider. Forming a partnership with a service provider that is conversant with RPO trends could massively reduce the need for in-house recruiters. Although there is absolutely nothing wrong with insourcing and hiring in-house employees, the cost can be significantly higher compared to outsourcing.

A closer look at the individual expenses that contribute to the cost per hire can help organizations discover more efficient ways of hiring. The cost per hire is calculated as follows: (Internal recruiting costs + External recruiting costs) / Total number of hires.

Internal recruiting costs encompass the cost of hiring managers, staff recruitment costs, training and development costs, compliance costs, and administrative costs. Each of these costs is essential to the hiring function but can be minimized through effective strategies.

Similarly, external recruitment costs incorporate marketing expenses such as job board fees, pre-screening costs, referrals or signing bonuses, and HR technology/software costs.

Considering these factors, it becomes clear how some hiring methods might incur more costs than others. For instance, job boards often charge upwards of $300 to display open job positions, usually for a limited time. This can quickly add up when scaled across multiple job websites and positions.

By understanding the contribution of each item to the total cost per hire, your business can adopt lower-cost hiring methods. Industry-standard fees for using an external recruitment agency or staffing company hover around 15-30%. Traditional RPO companies have charges ranging from 10-15%, but next-generation RPOs like Recrula cost less as they incorporate new technologies and optimized processes.

To cut down on recruitment expenses, companies should consider RPO as an essential solution. It is worth noting that all RPOs are not identical. For instance, a next-gen RPO company like Recrula offers flexRPO service that demonstrates unique qualities as it capitalizes on new technology and system optimization. Consider such innovative RPO solutions to meet your company’s recruitment needs.


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