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What is the difference between RPO and in-house recruitment?

As individuals, we all engage in outsourcing on a daily basis. When we buy milk or bread or drop off clothes at the dry cleaners, we are outsourcing because essentially, we don’t have the time, facilities or the expertise to accomplish those tasks ourselves. Hands up, who has a cow in their backyard? Thought so. There are definitely times when someone else can do something better than us and utilising their strengths is a way of making our own lives more productive, enriched and hassle free.

RPO Pros and Cons

Business practices have evolved in a similar way and especially when it comes to human resourcing. Recruitment Process Outsourcing (RPO) effectively means trusting the experts to provide you with what your company needs, up to but not excluding an end-to-end hiring solution. The fundamental goal becomes the acquisition of the best possible candidates as efficiently and cost-effectively as possible. In other words, the recruiter's success and the client's success become intertwined.

So, what is the difference between RPO and in-house recruitment? And what’s the best solution for you? Well, that all that depends upon the individual requirements of your business and on how many levels of the recruitment process you wish to delegate. Here we weigh up both the good and the bad.

A step or three ahead: RPO advantages

Kevin Wheeler, the founder of Global Learning Resources, a consultant, public speaker, writer and university lecturer believes the era of RPO is upon us and goes as far as to question whether internal recruiting is even needed at all.

"Does it [an internal function] do something that an external provider cannot do? Can it do it as cheap or as fast? Can it provide a higher-caliber candidate?" To remain competitive with outside providers, an internal function has to be as efficient as or more efficient than an outside provider, he adds.

Wheeler says that today, organisations are seeking out RPOs that offer quality and speed and are able to integrate the clients employment brand, culture, and knowledge in such a way that candidates are not even aware they are dealing with a third party.

Outsourcing recruitment activity is an ideal solution to the highs and lows of ever-shifting corporate requirements, feast or famine, small needs or big, plus it can lead to a competitive advantage when the talent pool is on the shallow end. It has been proven time and again that the more talented an organisation's workforce is, the more attractive the employer brand becomes.

Recruitment Process Outsourcing can be beneficial in this respect because the process, when properly and thoroughly executed, can also improve candidate experience. Often an HR department does not have time to offer feedback to applicants, which can leave a negative impression. An organisation that doesn't offer at least an acknowledgement indicating that their CV has not gone down a black hole, can damage its employer brand, leading to future problems in attracting critical talent.

Further advantages? Well, the quality of candidates has been shown to increase; RPO cuts the time needed to fill key positions, shortens training periods, promotes greater employee retention, reduces costs and increases HR effectiveness.

Additionally, managers and HR professionals’ time is freed up. It makes perfect sense that the early stages of the process are the most easily farmed out and it’s normally a given that the vendor's team would at least take complete ownership of the initial parts of the process; sourcing, job-board postings, initial screening, applicant tracking, management of the recruitment portal, background and reference checks, all of which are time consuming for hiring managers and in-house recruiters. This all results in managers and HR staff being able to focus on the organisation's core business, whilst retaining ownership of hiring outcomes, still keeping an eye on the process if they so wish.

Once the legwork is done, the flexibility of outsourcing recruitment means that the organisation can also rely upon the vendor’s team for the later stages too, and the flexibility further facilitates organisations by scaling their recruitment activities as and when needed or when they are dictated by economic conditions.

But even those organisations with dedicated HR departments who have successfully worked on a hiring process with an RPO provider can benefit from the long-term nature of the partnership through continued access to the vendor's resources. RPO is a customised process, which really is the whole point, and it’s why it evolved into being in the first place. 

And it's not a one-size-fits-all model either. RPO is a versatile solution depending on requirements. But the bottom line is that by embedding the team, the provider can better understand the organisation's needs, hiring culture, values and employer brand while supplying the client with the tools necessary to ensure best-case outcomes.

Outside of immediate hiring needs, in long-term successful RPO partnerships, providers can also offer support on strategic issues, recruitment planning, employer branding and consulting services.

In fact RPO is increasingly being viewed as a key strategy in and of itself when it comes to talent acquisition, building on its blossoming track record in delivering creative and increasingly sophisticated solutions as the sector matures and defines itself.

The shoe on the other foot – RPO disadvantages

On paper, it’s fair to say that the advantages of an RPO solution may appear to outweigh the disadvantages - all the benefits of a pizza delivery made just the way you ordered it right, to your doorstep. But just as the pizza might get delivered to the wrong address or may arrive as a box of cold stringy cheese on soggy bread, RPO could, suffer from limitations, pitfalls and cautionary tales.

There are elements of risk to be considered, for example, the non-delivery of required outcomes, breaches in confidentiality or perhaps power struggles over the ownership of the process. When considering control, letting go of the recruitment process can be daunting for any organisation and it maybe even goes against the ethos of its culture. After all, the people a company employs are their most important assets, so who better to recruit than the company itself, right?

As with most things, especially evolving solutions, there are generally trade-offs that might need to be made in order to strike a balance, which is all part of building a strategic partnership.

Where careful thought, consideration and analysis of business requirements have not formed part of the initial stages of the RPO journey, there is a genuine risk of having an external recruitment provider who is not embedded fully into the business. Will an RPO provider gain the level of knowledge that in-house colleagues have? Will they not only understand the culture, but live, breathe and promote it to the highest standard?

We identified earlier that employee brand can truly benefit from the RPO provider, yet at the other end of the scale there is inevitably the chance that the culture your business has worked tirelessly to create will be misunderstood and under-sold to prospective employees. How will an outsourced recruitment provider embrace your brand? Can they entrench themselves into the organisation in the same manner as that of long standing, in-house colleagues?

And can an outsourced recruitment provider gain the knowledge that in-house colleagues have? Will they live and work by your values? And similarly, will your values be sold precisely with the image your business wishes to portray? Often, when considering ‘cultural fit’ against ‘skill set’ as desirable attributes, the feature which is higher on the agenda of the majority of hiring managers is cultural fit. Maybe this is because it is thought that technical, software, system or process skills specific to a role can be learned or improved upon whereas qualities more commonly associated with the right fit, come down to personality traits which are less likely to change.

Arguably the principal issue with RPO therefore, is the risk associated with taking on an RPO provider, whether that is an individual or an entire team, that may not themselves be the best cultural fit for your business. At the very least, you need an RPO provider who is on the same page as you and who is onboard with your vision, your requirements and overall, who you completely trust to hire only those candidates who are right for both the business and the role.

Pitfalls are not something that is RPO-specific and if handled properly, there is no need for it all to end in tears. With an eye on the long-term, the very nature of RPO offers every opportunity to overcome any obstacles. It's all about bringing together the right people, laying all the cards on the table from the outset and being clear and united on the ultimate goal, all the while keeping an eye on the ball.

Taking the bus vs buying a BMW – RPO summary

So, what have we learnt? An RPO, after an organisation has evaluated it’s own requirements, and a provider's technical and practical capabilities to deliver, becomes all about partnership. Partnership is all about trust. Simply engaging a vendor for a specific task is like taking the bus from A to B, getting off, turning your back and walking down the road. Buying a BMW is an investment that will take care of your motoring needs for a long time to come, as long as it's given the required amount of care, attention and respect.

A strategic RPO partnership can go well beyond an organisation's immediate recruitment needs and into the realm of value-added for both partners over time.

Much of the advice out there for those organisations contemplating such a partnership focuses on the absolute necessity of doing their homework, firstly as to what their own immediate, short, medium, and long-term recruitment needs might be, what has worked until now, what hasn't, or what changes might need to be made to structure. Bringing the home team on board is also important before taking the plunge into RPO. They should also know what RPO involves so there are no unexpected surprises down the road, along with any specific solutions the process can provide. In short, benefits and drawbacks for the organisation need to be considered initially.

The next step is to seek out a suitable vendor who has the expert capabilities, knowledge, experience and cutting-edge technologies to deliver what is needed. It should be a provider who will above all listen to their client’s needs and who can offer the right solutions to achieve that vision. They should be up-to-speed on new and emerging industry trends and show signs of being innovative and forward-thinking with their solutions, and ultimately, be able to walk the walk.

Communication is the key to building trust and once that is established, the groundwork can be laid for a successful venture based on pre-agreed parameters with clear expectations that both parties respect. Above all, RPO is a collaborative effort, a meeting of minds and of benefit to both partners.