RPO in India

Recruitment process outsourcing RPO India | Managed Services | Contingency Search | Executive Search Services | Temporary staffing | Permanent Staffing india

Definition : Managed Services / Recruitment Process Outsourcing (RPO) is a form of Business Process Outsourcing (BPO) where an employer out sources or transfers all or part of its recruitment activities to an external service provider.

The external service provider may serve as a virtual recruiting department by providing a complete package of skills, tools, technologies and activities. The RPO service provider is “the” source for in-scope recruitment activity.

Differentiating between RPO and Other types of staffing : Other types of occasional recruitment support, for example temporary, contingency and executive search services is more analogous to out-tasking, co-sourcing or just sourcing. In this example the service provider is “a” source for certain types of recruitment activity.

The biggest distinction between RPO and other types of staffing is Process . In RPO the service provider assumes ownership of the process, while in other types of staffing the service provider is part of a process controlled by the organization buying their services.

History of Managed Services / RPO :

While temporary, contingency and executive search firms have provided staffing services for many decades, the concept of an employer outsourcing the management and ownership of part or all of their recruiting process wasn’t first realized on a consistent basis until the 1970s in Silicon Valley’s highly competitive high tech labor market. Fast-growing high tech companies were hard-pressed to locate and hire the technical specialists they required, and so had little choice but to pay large fees to highly specialized external recruiters in order to staff their projects. Over time, companies began to examine how they might reduce the growing expenses of recruitment fees while still hiring hard-to-find technical specialists. Toward this end, companies began to examine the various steps in the recruiting process with an eye toward outsourcing only those portions that they had the greatest difficulty with and that added the greatest value to them. That’s when the concept of RPO came into existence in the US and spread to Europe as well. The initial RPO programs typically consisted of companies purchasing lists of potential candidates from RPO vendors. This “search/research” function, as it was called, generated names of competitors’ employees for a company and served to augment the pool of potential candidates from which that company could hire.

Over time, as business in general embraced the concept of outsourcing more and more, RPO gained favor among Human Resource management: not only did RPO reduce overhead costs from their budgets but it also helped improve the company’s competitive advantage in the labor market. The greater use of RPO was also said to be influenced by the ubiquitous use of technology to increase productivity. This reliance on technology placed a premium on hiring people with specific technical skills. This specificity required a targeted approach to recruiting, and RPO is a strategy that can satisfy this need even now.

While RPO is new to India, it is already a big industry globally and some estimates suggest it is worth $30 billion. The RPO wave is catching up fast in India. As the Indian labor markets become more and more competitive, RPO is fast becoming more of a common solution. It is claimed that a greater impetus for RPO is provided by the shortage of skilled labor. Although there is abundant pool of labor (3 million/year) in India, only 10% immediately hirable – lack of language skills, lack of practical experience, lack of cultural/interpersonal fit, mobility are some of the factors because of which shortage of skilled labor is faced by organizations and RPO is utilized by some to fill this gap. The Indian labor market too has become increasingly dynamic: workers today change employers more often than in previous generations. De-regulated labor markets have also created a shift towards contract and part-time labor and shorter work tenures. These trends increase recruitment activity and encourage the use of RPO model.

Reduces process variations Increases sourcing timeliness and expertise Improves quality of resumesDecreases time to fill Gives better leverage of technology Improves candidate nurturanceImproves applicant trackingEnables meaningful reports


  1. For any managed services model to work there are some critical requirements or must haves like Executive sponsorship of the project. Any business model innovation requires the executive to champion internal resistance into acceptance Clear Partnership Definition – A detailed and clear scope of work to be defined before agreeing on to the terms. The managed services agreement will have the scope of work documented & agreed upon. Clarity on the role & the deliverables from the onsite resource & the same to be documented & mutually agreed upon. Mutually agreed expectations to be jotted in the agreement. Prepare a project plan with defined recruitment process & get a consensus on the same. Historical data to be made available so as to help prepare a project plan blocking all possible loop holes and deciding on the key deliverables. Its imperative for the success of this arrangement that we have a buy in from each person involved in the project from Clients side and everyone understand that the intention is to meet the numbers and nothing else.