Difference Between RPO and BPO

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What Is the Difference Between RPO and BPO?

Kathleen Dongo

Understanding the difference between Recruitment Process Outsourcing (RPO) and Business Process Outsourcing (BPO) is essential if your company is aiming to streamline operations and improve talent acquisition.

RPO, a specialized form of outsourcing, focuses exclusively on improving recruitment processes, thereby elevating the quality and efficiency of talent acquisition. On the other hand, BPO includes a wider range of outsourcing activities, targeting various non-essential business tasks to optimize overall operational efficiency.

At Tribe, our expertise in both RPO and BPO positions us to effectively guide your organization in choosing the right outsourcing strategy to meet your unique needs and objectives.

Let’s start from the beginning, what’s RPO?

RPO providers are well-trained recruiting professionals who specialize in both active and passive talent acquisition.

In order to deliver outstanding service, RPO (Recruitment Process Outsourcing) providers need to remain at the forefront of recruitment trends, possess the necessary resources to improve their abilities and fulfill the hiring requirements.

Simply put, RPOs integrate people, technology, processes, and analytics into the talent acquisition function to ensure optimal performance.

However, you might question the rationale behind hiring an external individual to handle talent acquisition for your organization.

It’s important to note that there are numerous advantages associated with RPOs such as the cost, time, and efficiency aspects of this process.

In fact, an RPO solution can offer a variety of benefits to meet the organization’s requirements, including:

  • Effectively managing fluctuations in hiring needs throughout the year.
  • Reducing overall recruiting expenses and reducing dependence on staffing agencies.
  • Enhancing satisfaction among hiring managers.
  • Decreasing the time it takes to fill vacant positions.
  • Strengthening the organization’s employment brand.
  • Enhancing the experience for candidates during the hiring process.
  • Simplifying and optimizing the hiring process.
  • Allowing more time for other tasks, among various other benefits.

A recruitment process outsourcing model involves an external outsourcing company acting as an extension of the HR department to handle recruitment.

This can be done either off-site or on-site.

Very often, RPO is utilized for high-volume recruiting, such as customer service, sales, and assistant roles, as well as for positions with a short-term nature or projects with specific deadlines, but ultimately, RPO can replace all internal recruitment functions within an organization.

It’s important to recognize that the function of contracting process outsourcing goes beyond simply filling vacancies during periods of high demand; it also plays a crucial role in enhancing an organization’s overall recruitment process.

By entrusting the entire outsourcing process to external experts, internal HR teams can significantly reduce their workload, enabling them to concentrate on other essential responsibilities.

Furthermore, it is crucial to understand that an RPO provider must fully embed themselves in your company.

As a result, they may invest time in training and thoroughly studying the structure and culture of your organization in order to accurately define the key criteria for an ideal candidate for the position.

But in case you want to immerse yourself and become a master in RPOs, I suggest you read this helpful and interesting article: What is Recruitment Process Outsourcing and How Does it Work?

You might also be interested in our other article – Why Companies Outsource Recruitment?

Now let’s delve into the BPO

Business Process Outsourcing, also known as BPO is a business process that involves the engagement of an external service provider to handle one or more of a company’s business processes. 

This third-party entity oversees all operations of the business function.

In a nutshell, this practice of delegating non-essential business tasks to an external provider is commonly referred to as business process outsourcing (BPO).

Whether it involves front-office or back-office jobs, the outsourcing of a specific process falls under the BPO umbrella.

BPO (Business Process Outsourcing) is categorized into three groups based on the location of the provider:

  1. Offshore Outsourcing refers to the practice of hiring an external provider to carry out business operations in a different country from where the products or services are developed or manufactured. This enables online benefits to be leveraged. 
  2. Nearshore Outsourcing takes place when the external provider is situated in a neighboring country to the company’s location. For instance, if the company is based in Germany, the BPO provider would be in Austria or another nearby country.
  3. Onshore Outsourcing or also known as domestic Outsourcing, occurs when the BPO provider is located within the same country as the contracting company.

Organizations opt for hiring BPO providers for several compelling reasons.

Firstly, they seek to improve the hiring processes by the involvement of advanced technology or AI techniques to streamline the steps.

This approach ensures smoother operations and enhances overall productivity.

Moreover, thanks to BPO providers, organizations increased quality control in candidate selection and declutter administrative tasks that can speed up the hiring process.

Secondly, BPO providers offer personalized support for customer service operations, encompassing marketing, sales, customer service, and complaint resolution.

By leveraging their expertise in these areas, organizations can deliver exceptional customer experiences and improve customer satisfaction.

There are several advantages to using BPO providers, including:

  • Cost Reduction: One of the main motivations for outsourcing is cost savings. Instead of purchasing IT equipment and hiring additional staff to perform specific tasks, companies can outsource those tasks to a service provider, thereby reducing or eliminating overhead costs.
  • Improved Efficiency: BPO firms possess extensive experience in various industries and consistently deliver excellent results. They also follow industry best practices and leverage cutting-edge technologies, leading to enhanced efficiency and productivity.
  • Focus on Core Business Functions: Many businesses, especially startups, often struggle with non-core activities. By transferring non-core processes to a BPO company, the business can free up time and resources to concentrate on its core operations.
  • Global Expansion: When a company decides to enter a foreign market, there are certain activities that require local market knowledge, expertise in national laws, or fluency in a foreign language. Such tasks can be delegated to a BPO firm, enabling the company to operate more efficiently and achieve faster growth.

The difference between RPO and BPO

Recruitment Process Outsourcing (RPO) is a specialized branch of Business Process Outsourcing (BPO) that enables employers to delegate their recruitment processes, either in whole or in part, to an external service provider.

The main goal of RPO is to enhance the overall recruitment process by reducing internal HR workload and allowing teams to focus on other important tasks.

RPO providers invest time in understanding the structure and culture of the business to define the key characteristics of ideal candidates

On the other hand, BPO encompasses the outsourcing of non-essential business tasks to third-party providers. 

Unlike RPO, which specifically focuses on recruitment processes, BPO encompasses a broader range of outsourcing activities, including front-office and back-office work.

The implementation of change management becomes necessary when transitioning in-house tasks to a BPO provider, as it impacts employees, workflow patterns, and overall business operations.

The decision-making process for outsourcing recruitment involves the following steps:

  1. The company’s executives decide to delegate a specific business operation or a portion of it to an external BPO provider.
  2. They carefully assess the advantages and disadvantages of this action, considering whether it aligns with the organization’s strategic objectives.
  3. They select the most suitable BPO provider for the task and outsource the identified operation to this external service provider.

Conclusion

It is important to note that most organizations frequently outsource one or more specific functions rather than outsourcing all HR activities.

For instance, instead of outsourcing the entire spectrum of HR tasks, a corporation may choose to outsource only payroll processes.

This selective approach allows organizations to focus on core competencies while still benefiting from specialized external support in critical areas.

If you are still considering working with BPO or RPO companies, always you weigh the benefits of outsourcing and the potential drawbacks (i.e. security issues, communication flows, cost, and structure) before making a final decision.

As you’ve seen, there are many reasons to opt for BPO or RPO.

If you are curious to learn how we can help out with your hiring needs, book a free consultation with us.

Kathleen Dongo

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