International Hiring
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Advantages and Disadvantages of Outsourcing Recruitment

Recruitment Process Outsourcing (RPO) falls under the Business Process Outsourcing model practised by the corporate companies. RPO refers to the act where a company outsources the recruitment process as a whole or as a sub-function. Generally, third-party service providers contribute towards recruiting employees for a particular company.

Why RPO is beneficial?

In today’s scenario, the recruiting process has become relatively complex. Thus, to recruit competent professionals for the open positions at your company, it is imperative a navigate through a stringent labour market. RPO providers are usually subject matter experts with a significant knowledge on talent acquisition. 

Given their knowledge and expertise on the recruitment front, the RPO providers are well equipped with the latest recruitment technologies. They also have designated resources to scaleup the recruiting capacity thereby meeting the altering hiring demands of their clients. Thus, RPOs helps with enhancing the talent acquisition function by uniting people, technology and process requisites. 

Types of RPO models:

The RPO assistance is further divided into three types based on the nature of help required by the companies who outsource their recruiting process. We are enlisting these types below for your reference,

On-demand RPO:

This type of RPO solution involves engaging outsourced recruiters to join your talent acquisition team for a specific project. It is a contract-based engagement with a third-party service provider who is aware of the company’s hiring policies.  

End-to-End RPO:

This RPO solution is generally used for a streamlined market, country or region. As in, this hiring mechanism is extensive and can focus on recruitment for any business division or job role. Hence, the end-to-end RPO initiative encompasses all the hiring requirements of a company.

Project RPO:

This type of RPO allows the company to outsource the talent acquisition process to a team of professionals who would hire the best talent. This service is usually an ad-hoc request which should be accomplished within a designated timeframe. It includes,

  • Hiring extra manpower to mitigate excessive workload during busy seasons
  • Launching a new team or sub service line and
  • Performing other just-in-time requirements

Finally, an outsourced provider is also used to build a contingent workforce. Therefore, this initiative is more like a strategic partnership between your company and the third-party provider. The resultant of this partnership also brings value added benefits. 

Benefits of outsourcing recruitment and selection process:

Cost reduction through outsourcing recruitment functions: 

The primary benefit of outsourcing recruitment is the cost-effectiveness. This is often quoted as the major motivation for various companies to adopt to this model. It is a notable fact that, the recruiting costs goes overboard in many companies. Hence, the recruiting partner assists with providing an integrated recruitment solution. This in-turn contributes to cost-reduction besides improving the hiring quality. 

Increased scalability:

While outsourcing the recruitment process, it is possible to scale up and down on the hiring activities per the requisite. This practice would allow your company to swiftly adapt to the altering recruitment needs. Thus, it proves to be an ideal solution for companies that are looking forward to expand in the near future. Moreover, venturing into new locations may demand a rise in the employee headcount within a stipulated timeline. 

Time-efficient hiring:

With any recruitment process, the time taken is inversely proportional to the cost incurred. As in, a cost-effective recruitment process requires significantly more time. This is because, most of the companies follow a standard recruitment module which is quite primitive. Such outdated strategies would consume potential time and money with little to no focus on the employment perks offered by the company. 

On the other hand, outsourcing recruitment results in adopting robust processes to mitigate obscure delays. This in turn results in securing the best talent available in the industry for the open position at your company within a short span of time. 

Improve quality of hire:

Hiring the right candidate could be a tedious task as it is not easy to sum-up the competencies of an individual based on their skillset or experience. Recruiters evaluate multiple factors that are while making a decision call in terms of hiring. To ensure accuracy with this evaluation, the hiring managers should have potential experience with the recruitment process. 

An experienced staffing agency would have the required HR experts who can identify the right fit for a job role. Furthermore, these agencies would meet with a constant stream of candidates from a specific industry thereby gaining more exposure. Whereas, an internal hiring manager may only search for candidates as and when they come across an open position. 

Analytics and reporting:

In addition to the above-mentioned benefits, outsourcing the recruitment process leads to data gain. Besides real-time reporting, the idea of documenting the candidate information also contributes to the decision-making factor. This practice further improves the standard of recruitment besides enhancing the efficiency, cost-effectiveness and the hiring quality. 

Thus, outsourcing the recruitment process also stimulates the growth of your company through dynamic recruitment assistance. 

Improves employer branding:

In today’s scenario, candidates with commendable skillset are sought after by varied firms from across the world. Hence, it is imperative to market the vision and values of your company in order to attract good talent stream. If the in-house talent team of your company does not add brand value to every open position, securing the best talent might become a difficult task. 

When you outsource your recruitment needs, the third-party service provider performs a thorough market analysis about your company. This analysis would revolve around researching about the industry and evaluating the performance of your company by making a comparison with your competitors. Based on the details acquired, the provider would create a brand-value for your company. It would further result in highlighting the benefits around joining your workforce. 

Global Compliance with hiring regulations:

International hiring demands maintaining compliance with the local recruitment laws and regulations. These may vary depending on the country hence, the HR department of every company should refrain from contravening them. Failing to meet with the evolving employment rules of a country may subject the parent company to significant liabilities. This would further deteriorate the brand value of the company. 

Hiring a professional talent provider with extensive knowledge on international and domestic labor laws would result in minimal risk hiring process. It would also contribute towards preventing the employer from performing non-compliant recruitment practices. 

Challenges of recruitment process outsourcing

Besides the above-mentioned benefits, enabling a third-party provider to manage your recruitment needs also gives rise to potential disadvantages. As in, 

Under-utilized HR resources:

The basic idea of redirecting an in-house functionality to an external service provider leads to loss of time. It also deteriorates the profit margin and efficiency as the internal resources are not employed to their full bandwidth. As in, the in-house HR resources may run out of errands to be performed on a daily basis. 

Staffing and Recruiting:

The outsourcing process also comes with the risk of not recruiting the right fit for your company. However, it is a known fact that the prospects of outsourcing recruitment functions overrules this disadvantage. To ensure seamless hiring, collaborate with only the reputed recruitment firms that specialize on your industry. 

Security concerns:

While outsourcing your recruitment process there is a threat around compromising on data confidentiality. In addition to this, the third-party providers are also exposed to certain process nuances followed by the firm. This may impose security risks or other data breach limitations. 

Search for the right hiring partner:

Before collaborating with a hiring partner, you should evaluate the recruitment team to test their acumen about the kind of talent they look forward to hire. In addition to this, you should also perform frequent reputation checks to assess the on-going recruitment process. 

Post the recruitment process, we at Multiplier can provide your employees with the best onboarding experience. Furthermore, we also simplify the technicalities around managing the employees. Especially, the international employees who fall under general compliance category. Multiplier also help you to process the payroll for all your employees through a single click from our platform. 

Visit us to know more about our services. 

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