What is RPO (Recruitment Process Outsourcing)?
Definition: Recruitment Process Outsourcing (RPO) is a form of business process outsourcing where an employer transfers all or part of its recruitment processes to an external service provider, who manages the function as an extension of the client's team.
Also known as: Recruitment Outsourcing, Outsourced Recruiting, RPO Services
Quick Summary
TL;DRRecruitment Process Outsourcing (RPO) is when an organization transfers all or part of its permanent recruitment functions to an external provider. Unlike staffing agencies that fill individual roles, RPO providers become an extension of the client's HR team, often using the client's brand and managing the entire hiring process.
Key Facts
What It Is
Outsourced recruiting function
Industry definition
Scope
End-to-end or partial
Engagement models
Market Size
$7.5B globally
SIA research
Key Difference
Process, not just candidates
vs staffing agencies
Why Companies Choose RPO
In-house recruiting teams often struggle with scalability—they can't ramp up quickly for growth or scale down during slowdowns. RPO provides flexible capacity, specialized expertise, and often better recruiting technology. For staffing agencies, understanding RPO is important because RPO providers are both competitors (for permanent placement business) and partners (RPO often uses staffing agencies as sub-vendors).
Common Pain Points
- 1In-house teams can't scale with business demands
- 2Lacking specialized recruiting expertise for certain roles
- 3Inconsistent hiring processes and candidate experience
- 4High cost of recruiting technology and infrastructure
How RPO Engagements Work
RPO models vary based on client needs and scope.
- 1
Assessment and Design
RPO provider analyzes client's hiring needs, current processes, and technology. They design a customized solution for scope, team structure, and metrics.
- 2
Implementation
RPO team integrates with client systems (ATS, HRIS). Recruiters are trained on client culture, employer brand, and specific requirements.
- 3
Ongoing Delivery
RPO team manages recruiting: sourcing, screening, interviewing, offer management. They may use client's brand (embedded) or their own (project).
- 4
Continuous Improvement
Regular reporting on metrics. Process optimization based on data. Scaling up or down based on hiring demands.
Result
RPO transfers process ownership, not just candidate delivery.
RPO Deep Dive
RPO Models
End-to-End RPO transfers the entire recruiting function including strategy, sourcing, screening, interviewing, and onboarding. Project RPO handles specific initiatives (new facility, product launch) with defined scope and timeline. Selective RPO takes over specific functions (just sourcing, just screening) while client retains others. On-Demand RPO provides recruiter capacity for volume spikes.
RPO vs Staffing Agency
Staffing agencies fill individual positions on a transactional basis, billing per placement. RPO providers manage the recruiting process itself, often with dedicated teams, using client systems and brand, billing on outcomes or retained/hybrid models. Agencies provide candidates; RPO provides capability. Many RPO programs use staffing agencies as one sourcing channel within their model.
RPO for Staffing Agencies
RPO represents both threat and opportunity for staffing agencies. Threat: RPO can displace direct relationships with clients. Opportunity: RPO providers need sourcing partners for hard-to-fill roles or volume surges. Positioning as an RPO partner means demonstrating specialization, quality metrics, and ability to work within RPO workflows.
Common Misconceptions
- RPO is just a staffing agency by another name
- RPO is only for large enterprises
- RPO replaces all need for internal HR
- RPO always costs less than in-house recruiting
RPO vs Staffing Agency
| Factor | RPO Provider | Staffing Agency |
|---|---|---|
| Scope | Process ownership | Position filling |
| Team | Dedicated/embedded | Shared across clients |
| Brand | Often client's brand | Agency's brand |
| Pricing | Outcome/retained | Per placement fee |
| Technology | Uses client's ATS | Own ATS |
| Relationship | Strategic partnership | Vendor/transactional |
Key differences in service model
Related Terms
Frequently Asked Questions
Related Resources
Support Your RPO Partnerships
Professional resume formatting for RPO submissions