Many kinds of outsourcing can be beneficial for businesses struggling with heavy workloads, but not every type is the right fit for all organizations. Services like Recruitment Process Outsourcing (RPO) and Business Process Outsourcing (BPO) may sound similar, but they have distinct advantages and use cases.

BPO hands non-mission-critical functions to a third party, whereas RPO is a more specific outsourcing strategy focused on recruitment. Understanding the differences between them is a crucial first step to choosing the best solution for your company.

In that spirit, here’s a closer look at RPO vs. BPO and how you can pick the right one.

What Is RPO?

Recruitment Process Outsourcing involves outsourcing some or all recruitment processes to an external service provider. While other staffing solutions often focus on filling a specific role, RPO is for multi-hire situations and improves overall recruitment effectiveness and efficiency.

This solution helps businesses find the right talent for current or future needs without adding to HR’s already strenuous workload. As a result, it can lead to better employment outcomes, higher productivity, and reduced turnover.

Here’s a closer look at what RPO is and how you can benefit from it.

Types of RPO 

There are three main types of RPO you should know about. These are:

• On-Demand RPO: This scalable solution transfers the end to end hiring process or discrete recruitment processes like screening or candidate sourcing to a third party to support teams during busy periods.
• Project-Based RPO: Like on-demand RPO, this method is a short-term solution. Here, a service provider will manage your recruitment for a singular project, such as opening a new location or launching a new product.
• Enterprise RPO: Also called “full lifecycle” or “end-to-end RPO,” this approach turns to outside experts for most or all of your recruitment needs for long-term sustainable results.

Key Benefits of RPO

Across all three types, RPO has several noteworthy advantages to consider. The most straightforward benefit is that it lightens HR’s workload, leaving your team with additional time to focus on other pressing needs.

Outsourcing recruitment can lead to noticeable workforce improvements, too. These include better candidate selection, a lower cost-per-hire, and a shorter cycle time suck as time-to-hire KPI. You’ll also strengthen your brand as an employer to attract top talent now and in the future.

RPO’s flexibility likewise deserves attention. It can adapt to your shifting needs and scale up or down with your organization to ensure quick growth and manageable margins.

What Is BPO?

Business Process Outsourcing transfers one or more non-core business functions to a third party. Recruitment can fall under this umbrella, but BPO also covers other ongoing tasks. Some commonly outsourced tasks include:

• IT Support and Application Development
• Finance and Accounting
• Customer Service
• Human Resources and Payroll

While BPO and RPO are similar, the kinds of work they cover, and their key benefits differ.

Types of BPO

You can differentiate between BPO strategies in a couple of ways. One of the most common is to divide them by task type, splitting them into:

• Front-Office BPO: A kind of BPO where an external provider handles customer-facing workflows.
• Back-Office BPO: Where you outsource non-customer-facing internal processes to a third party.

Business process outsourcing can also fall into one of two location-based categories. These are:

• Offshore BPO: Where a service provider in another country handles your outsourced program or projects. This includes near-shore strategies, which target nearby countries or those in similar time zones.
• Onshore BPO: Where the provider operates within the same country as your company.

Key Benefits of BPO

The biggest advantage of BPO is that it reduces operational costs, as the third party can handle repetitive tasks more efficiently than your team can internally. Similarly, BPO often streamlines ongoing workflows that may otherwise take up a lot of time.

BPO also lets you focus on your strategic plan and priorities. Functions like accounting or IT may be important but are not the core of what you do as a company. Offloading them to an external partner helps you put effort into what you do best. RPO shares this benefit, but with a more specific focus.

Finally, outsourcing these workflows results in time and cost savings compared to handling them internally, so scaling up becomes easier. That’s particularly beneficial for fast-growing organizations.

RPO vs. BPO: Which Is Right for Your Business?

RPO and BPO can both be advantageous. However, which one is best for you depends on what your business needs and goals are. Here’s a rundown of when to opt for RPO vs. BPO and vice versa.

When to Use RPO

You should use RPO when recruitment and hiring optimization is your biggest need. If you struggle to attract quality candidates, have high recruitment costs, need to expand your workforce, or have overburdened HR teams, RPO is the outsourcing strategy for you.

RPO is also a good fit when it comes to filling talent gaps in high-demand areas like IT. For example, Acara worked with a large healthcare services organization to source over 2,200 passive IT candidates while saving over $150,000 through RPO.

Other common RPO use cases include:

• Seasonal hiring
• Expanding into a new market
• Reducing turnover
• Sustaining long-term workforce growth

When to Use BPO

BPO is ideal when your company has multiple smaller functions that need streamlining. You should consider BPO over RPO if your recruitment function is working well, but you have several inefficiencies across other workflows. BPO may be ideal if immediate cost savings are a bigger concern for your business than long-term strategic shifts as well.

Many organizations also turn to BPO for international operations. You could work with an offshore partner to localize services in a region where you don’t have any employees or when expanding into a new country.

Other common BPO use cases include: 

• 24×7 customer service
• Offloading IT support from in-house staff
• Small workload reductions across multiple teams

Find the Right Outsourcing Solution for Your Organization

Understanding the difference between BPO and RPO is the first step to finding the best outsourcing strategy for your needs. Begin by reviewing your current workflows and goals, then compare BPO vs. RPO to see which one most aligns with your business.

If you need to fill labor gaps, free up HR workloads, or otherwise optimize your recruitment function, RPO may be right for you, and Acara can help. Whether you want to move forward or would like some more information on RPO, contact Acara today to get started.