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December 04, 2003
Recruitment Process Outsourcing
by Anil Kasibhatla, Principal

Companies have always been trying to find best ways to recruit quality talent, and contain the costs incurred in recruiting such talent. Unfortunately there isn't a "one size fit's all" solution to this problem. According to a Staffing.org poll there are only 9 percent of companies that are outsourcing large portions of organizational recruiting, with about 57.6 percent planning to increase the large-scale outsourced recruiting.

Recruiting is traditionally industry specific and strategies that work in the manufacturing industry for example may not work well in the life sciences industry and vice versa.

Hence from a Strategic perspective it's always a good idea to find niche based recruiting strategies that yield well for each industry vertical. The recruiting industry is already catching on to this phenomenon and "niche based" job sites are gaining rapid momentum and popularity. However sourcing talent is only a part albeit a very important aspect of the entire recruiting process.

For the purposes of this article we will study what are all the steps within the recruitment process that can and cannot be outsourced to a third party vendor. I will not be getting into the challenges, benchmarking of vendors, quality matrices etc since that is beyond the scope of this article.

So what in the world is Recruitment Process Outsourcing?

Recruitment Process Outsourcing or (RPO) can be defined as outsourcing all the transactional process driven initiatives that go into recruiting talent for any given organization. In lieu of keeping all the different aspects of the recruitment process in sync Global 2000 customers have spent hundred's of thousand's of dollars on automating the recruitment process with mixed results.

To counter the problems faced by Global 2000 customers a new process oriented outsourcing model could be used for faster, cheaper, scalable candidate acquisition. Companies like Kellogg's, Sodexho, Accenture, Bank Of America are already using this paradigm shift in outsourcing their process of Recruitment to a third party/outside vendor with measurable and quantifiable results.

So what are the steps in a typical recruitment process and what part of the process makes sense to stay in-house vs. outsource.

The typical recruitment process can be broadly defined as follows:

  1. Job creation/Strategy development
  2. Sourcing (direct vs. indirect channels)
  3. Job Board Posting/Mining
  4. Screening (reactive vs. proactive)
  5. Applicant tracking/candidate database upkeep, recruitment portal management
  6. Applicant Interviews, Interview Logistics
  7. Selection
  8. Closing the candidate
  9. Offer generation, offer extension
  10. Reference checking, background investigation, drug testing
  11. Start date co-ordination, orientation etc

Each of the steps outlined above may or may not be used by all organizations and the process usage statistics defines that the bigger the size of the organization the more complex the process of recruitment gets. However it's safe to say that 60 percent of above-mentioned transactions are generally used by all organizations in various shapes or form. With this conclusion we will address the recruiting transactions that can be outsourced.

1) JOB CREATION/ STRATEGY DEVELOPMENT: This is largely a strategic initiative for any organization and for all practical purposes makes absolute sense to keep it in-house.

2) SOURCING: By far one of the most important aspects of the recruitment process, and for the sake of making the recruitment process outsourcing a success it makes sense to outsource this function to a third party vendor. Recruiting vendors/Search companies have historically mastered the art of sourcing and can bring to the table their expertise in sourcing qualified candidates (active and passive) through direct and indirect channels.

3) JOB BOARD POSTING/MINING: However good or bad the economic cycles are it's safe to outsource the posting, mining of job boards to outside vendors. This again makes sense since most HR folks in companies can use their functional expertise in a much more strategic area rather than spend time posting jobs and mining job boards for candidates.

4) SCREENING: Screening just as sourcing is a very important aspect of the recruitment process and pretty much defines the quality of the candidates coming through. It's imperative that organizations invest sufficient time in defining the "attributes" both tangible and intangible they seek in candidates thoroughly to the recruiting vendor thus helping in bringing quality talent through the door.

5) APPLICANT TRACKING/CANDIDATE DATABASE UPKEEP, RECRUITMENT PORTAL MANAGEMENT: Depending on the amount of dollars already invested in ATS systems, recruitment portals, databases (ERP systems etc) careful analysis has to be done in outsourcing this function. If the recruiting vendor has expertise in supporting and upgrading the systems as per the needs of the organization it makes sense in outsourcing this function as well.

6) APPLICANT INTERVIEWS, INTERVIEW LOGISTICS: Applicant interviews or candidate interviews, are functions that have to b maintained in house and the only aspect of this transaction that can be outsourced is the logistics piece.

Steps 7, 8 and 9 and 10 are to be maintained in-house, and step 9 can be outsourced as well to a recruiting vendor.

In conclusion it's safe to assume that Recruitment Process Outsourcing is a safe bet, and if monitored carefully and implemented properly through effective due diligence of vendors etc can pay for itself in no time.


  About the Author
Anil Kasibhatla, Principal of Paul-Tittle Search Group
Anil Kasibhatla is a Principal with Paul-Tittle Search Group and plays a key role in their Entrepreneurial Services organization, focusing extensively on technology start-ups and early growth stage companies. Prior to entering the recruiting industry, Anil spent 4 years as a business systems analyst and software product developer. Anil has an MS in management information systems and a BS in mechanical engineering. You may contact Anil at anil@paul-tittle.com.

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