Understanding RPO vs BPO for Organizations
Looking for the right mode of outsourcing, whether the focus is on hiring or improving operational processes (hiring Talent vs Improving Operational Processes). Both models are crucial in the advancement of modern business, but the scope, implementation, and outcome are significantly varied.
What Is Recruitment Process Outsourcing (RPO)?
Recruitment Process Outsourcing is the service of a part or the entire recruitment process outsourced to another specialized provider of services. In this model, the provider is an extension of the internal HR or talent acquisition team of the company.
RPO providers manage a variety of activities from sourcing candidates, screening them, scheduling interviews, to onboarding assistance, recruitment analytics, etc. The whole point of this is to make the hiring process more efficient, reduce the time-to-hire, and increase the presence of better quality candidates.
Many organizations make use of RPO as a part of their talent acquisition services, especially in situations where the need for hiring candidates varies, or in situations where the internal HR teams don't have the resources to face the large volume of recruitment. RPO not only focuses on filling the roles, but it also helps in improving the hiring strategy as well as the employer branding.
What Is Business Process Outsourcing or BPO?
Business Process Outsourcing is the externalization of the business functions of the non-core activities, which are outsourced to service providers. These are often customer service, payroll processing, accounting, IT support, data entry, and administrative operations.
Unlike RPO, which is only concerned with recruitment, BPO has a broader scope of operations. The main objective of BPO is to make operations more efficient while incurring lower costs and helping businesses to focus on operations that require higher concentration.
BPO has a huge utilization in several industries, due to the benefits that come with them, among them are access to specialized knowledge and infrastructure, and a lack of heavy investment in these services internally.
Differences between RPO and BPO
The biggest difference in RPO vs BPO comparison lies in the specialty and the scope. RPO is only focused on recruitment as well as workforce management, but BPO involves many other business functions other than hiring.
RPO providers closely collaborate with HR and realign their recruitment strategy with the long-term business goals of the company. BPO providers, on the other hand, are fixated and focused on process execution, standardisation, and efficiency of operations.
One other important difference is a strategy of involvement. RPO tends to be more strategic, since hiring makes an impact upon the growth and culture of the business, whereas BPO is generally operational and process-driven.
Advantages of RPO
RPO has a lot of advantages for organizations that look to hire a strategic function.
One of the greatest benefits is access to recruitment talent and sophisticated hiring technology. Businesses benefit in terms of a shorter hiring cycle as well as quality candidates. RPO also has the benefit of scalability, as the businesses are able to scale up or down the number of hires without increasing the size of the in-house HR teams.
Also, other benefits include:
- Increased branding to employees and candidates
- Uniform and integrated hiring procedures - department/region
- Improved workforce planning using recruitment data
All in all, RPO can help businesses develop sustainable ways of procuring hires while ensuring flexibility.
Advantages of BPO
BPO offers advantages in operation in the form of standard or expertise process outsourcing to experts. This helps in reducing the load on the internal activities and thus helps organizations to concentrate on their core activities.
BPO also means more cost efficiency as there's no need to have large in-house teams and infrastructures. Companies get access to skilled professionals and existing systems that help to increase productivity and the quality of service.
Key benefits of BPO include:
- Reduced operational cost & improved efficiency
- Increased process execution/scalability
- Consistent and reliable service of the functions
For many businesses, BPO becomes a successful means of streamlining and carrying on with good business when the business begins to grow.
When to Choose RPO vs BPO
It is up to the business priorities to choose either RPO or BPO.
Organizations that are having challenges with hiring talent and expanding too fast, or even the scarcity of talent, benefit more with RPO. It helps to plan long-term workforce planning and proper recruitment for the purpose of the business.
BPO is more appropriate when businesses want to make their operations more efficient, when they don't want the administrative burden, or when they want to outsource their non-core functions. Many companies are using both models at the same time-RPO to hire and BPO to OP support.
Understanding RPO vs BPO for businesses helps business decision-makers to work on applying the right outsourcing strategy at the right time.
Real Life Examples Of RPO and BPO
A technology company undergoing explosive growth may use RPO to fill huge resourcing needs across the board in terms of hiring locations. The RPO provider takes care of sourcing, screening, and onboarding without compromising the consistency of hiring.
In contrast, a financial services organization may have contracted out customer support (BPO providers) as well as back office operations. This causes the operation costs to be kept down, and also ensures the quality of the service.
These are the examples to help demonstrate the difference between the purpose of RPO and BPO and how both complement each other in business operations.
Conclusion
The discussion around RPO vs BPO is not about one being greater than the other, but understanding the unique roles they play within the outsourcing models. RPO is focused on recruitment and talent acquisition, whereas BPO is operational efficiency through the use of outsourced business processes.
Businesses that have a clear set of goals that they wish to achieve can make use of both models in an effective way to further their business by not only improving their hiring outcomes but also saving money and assisting in the long-term growth of their business. Alignment between business strategy and execution of operations is ensured by choosing an appropriate outsourcing approach.
FAQs
Q1. Isn't RPO a form of BPO, or another form of outsourcing?
Ans. RPO is aligned with being seen as a special kind of outsourcing in terms of being just the recruitment aspect itself; therefore, this client is from the BPO services.
Q2. Which Industries are the Maximum Users of RPO Services?
Ans. Industries like IT, healthcare, manufacturing, retail, and finance are just a few examples of industries that frequently utilise RPO services because of the high need for hiring.
Q3. Are RPO and BPO for the benefit of small businesses?
Ans. Yes. Small businesses can implement RPO to bring more efficient hiring and BPO to reduce the size of the operation without increasing the size of internal business teams.
Q4. How does outsourcing that occurs through RPO or BPO affect company culture?
Ans. For this reason, RPO fits in with the company culture very well as it affects the hiring process, whereas BPO, for the most part, affects company culture less directly as they deal with operational-oriented tasks.
Q5. What are some of the possible considerations to be made prior to the selection of an RPO or BPO provider?
Ans. Businesses should consider expertise, scalability, technology capabilities, data security measures, cost structure, and alignment to business goals.