Outsourced Recruiting vs. In-House Recruitment Today: How RPO Emerges as Top Recruitment Trend

Published: August 7, 2023
SuperStaff HR specialists attends to clients of outsourced recruitment services.

The widespread layoffs in the tech sector and persistent economic slowdown dominating the headlines led many to wonder whether there’ll be an irreparable recession. However, with only less than 1% of the workforce being laid off each month, these sudden job cuts seemed to only be “ripples,” so to speak. 

The real problem is still labor shortages. The lack of available talents across western economies. 

Business leaders, therefore, should be more worried about how job openings outnumber candidates by a landslide. And amid this backdrop, how would leaders design a formidable recruitment strategy to identify talent-rich locations.

Will outsourced recruiting solutions be enough to mitigate the impact of talent scarcity? Let’s find out. 

State of the US Job Market

The tight labor market has become a major threat as businesses come back in full swing after COVID-19. By the end of 2022, the demand for the labor market already outpaced its supply by a large margin, with 5.5 million more job vacancies than unemployed individuals.

Simply put: Businesses are ready to hire, but they struggle to find people to fill the roles. 

Lower labor participation encourages better job security and higher wages for employees and potential candidates; but the stakes are higher for employers seeking to attract and retain workers.

In June 2023, however, the U.S. Bureau of Labor Statistics witnessed a slight uptick in its employment trend. Here are a few highlights:

  • The total nonfarm payroll increased by 209,000.
  • The unemployment rate was 3.6%, a 0.1% decrease from May 2023.
  • There were 1.6 job vacancies for every unemployed individual.
  • Sectors such as health care, social welfare assistance, construction, and the government continued to increase their workforce.

Despite the minor jump in job availability, it’s still fewer than what many economists anticipated. Even the unemployment rate continues to hover at its 70-year low. 

What’s fueling the gap? For one, the U.S. lacks immigrant workers to help alleviate the labor crunch. In 2021, the Department of Homeland Security (DHS) revealed that only 740,002 people had their legal permanent resident (LPR) status granted, the second-lowest figure since 2003. As a result, service-led industries like hospitality that rely on immigrant workers suffered high rates of unfilled jobs.

The recent surge of an aging population also adversely affected the size and productivity of the labor force. While the “prime-age” employees (aged 24-54 years) only crawled up by 40,000 in 2022, the number of Americans aged 65 and older skyrocketed by 2 million, showing that the existing talent pool may not be enough to replace the retiring workforce in the future.

Fortunately, U.S.-based businesses have one powerful tool in their arsenal to navigate the

labor shortage. By partnering with reliable recruitment process outsourcing providers in the Philippines and Colombia, they can mitigate risks, drive efficiency, and gain a competitive advantage. These top outsourcing destinations can provide them access to a deep pool of expert talents, available round-the-clock.

But how is outsourcing recruitment different from in-house recruitment? 

Advantages of In-House Recruitment

An infographic shows advantages of in house recruitment compared to outsourced recruiting.

Control and Alignment 

Many employers consider the human resources (HR) department as the heart of an organization due to their vital role in attracting and retaining top talents. 

Since they work solely for the organization, in-house recruiters have complete control over the entire recruitment process. With their deep understanding of the company’s needs, they align their hiring processes with the business’ goals and objectives. 

Another crucial part of their job is to review and assess job descriptions, ensuring that the candidates fit all the requirements. As such, they work closely with business owners to plan strategies and hire workers who are right for the job. 

Knowledge of Company Culture

A positive and engaging work environment is essential for any business to succeed. 

Research by Glassdoor revealed that over half (56%) of employees prioritized company culture over salary when it comes to job satisfaction. 

To achieve this, the HR team assesses not just a candidate’s skills and qualifications but also whether they’re culturally fit for the company – both now and in the long-run.

In the discovery phase, in-house recruiters develop a keen understanding of the organization’s culture and values. This valuable skill helps them discern which candidates are best suited for the company, thereby enhancing the company’s ability to hire active, committed, and passionate employees.

Talent Pipeline Development

Almost half (49%) of U.S. executives suffered from high turnover rates in 2021. The 2022 Talent Retention Report echoed this, highlighting that 28.3% of individuals quit their current jobs due to a lack of opportunities for career growth or advancement.

As such, hiring experts who seek to stay ahead of the curve should engage proactively with candidates to foster potential top talents and build a healthy pipeline – even when the roles are yet to be filled. In-house recruiters have an advantage in this respect because they can nurture relationships with potential candidates over time, ensuring a steady pool of qualified candidates for future hiring needs.

Moreover, in-house recruiters can review the performance of the new employees as they take on their roles. The recruiters can then relay their observations to the respective supervisors who will ultimately decide the career path of the newcomers. 

Once they have been properly integrated into the company, a great strategy to ensure that employees are on track is through employee engagement – and one of the key denominators of which is praise and recognition. Employees who know that they can move up the organizational ladder will be more motivated to produce excellent work and exhibit higher levels of commitment. Otherwise, they may become disengaged and seek opportunities elsewhere.

Recruiters who work in-house have the ability to build long-term relationships with their hires as they work closely together. This makes in-house recruitment an ideal option for organizations seeking better employee retention as it allows them to foster connections with candidates from the get-go.

Confidentiality and Data Security 

In 2022, the U.S. was one of the top five countries with the highest average cost of data breaches amounting to a total loss of $9.44 million. Nearly half (45%) of businesses have encountered serious data breaches within the past five years due in part to insecure IT infrastructures.

Since both companies and applicants exchange and collect sensitive data during the hiring process, their information can be easily compromised by online hackers. 

Fortunately, an in-house recruitment team automatically has a confidentiality agreement with the company, preventing further breaches and violations during the talent acquisition process. They offer greater control and utmost care over the handling and security of all sensitive data. 

Furthermore, organizations can also implement robust data protection measures and ensure compliance with privacy regulations, safeguarding confidential information. 

Advantages of Outsourced Hiring

An infographic shows advantages of outsourced recruiting.

Now that we’ve learned the advantages of in-house recruitment, let’s dive into outsourcing, which means organizations get to offload recruitment duties to experts – enabling your in-house team to dedicate their time and energy to their core competencies. 

Let’s take a look at a few benefits of outsourcing recruitment companies from across the globe.

Global Talent Pool

Heading into 2023, workplace diversity, equity, and inclusion (DEI) have become major drivers of success in modern business settings. In fact, around three-fourths (76%) of applicants consider diversity in a workplace as a crucial factor when choosing a job. 

This is why business leaders should extend their hiring efforts beyond their local borders to diversify their workforce. More representations in the workplace can unlock more referral avenues – which in turn attracts a more diverse set of job seekers. When hired, these employees are 5.4 times more likely to stay long-term if they’re appreciated and fairly treated. 

Not only this will smoothen recruitment processes, but also drive revenue growth. In 2019, McKinsey’s research showed that businesses with ethnically diverse teams outperform their competitors by 36% in profitability.

How can firms tap into a global talent pool and explore these benefits? The answer: employing recruitment process outsourcing services from the Philippines and Colombia.

Outsourcing partners often have extensive networks, databases, and resources to source qualified candidates from various locations and industries, which in turn, can diversify your workforce and broaden your talent pipeline for future recruitment efforts.

Time and Cost Savings

Companies receive hundreds of applications for every single job posting. On top of screening these applicants, recruiters also need to conduct other tasks such as interviews, personality assessments, skills evaluations, and medical tests to ensure that the applicant is the right person for the job. 

This is why the recruitment process takes so long and costs so much. Let’s break down the numbers: 

  • The average time-to-hire hit an all-time high, taking 44 days to complete the recruitment process.
  • The average cost-per-hire almost reached $4,700.

But here’s the kicker: 62% of job seekers won’t accept their offers if companies keep them hanging for at least two weeks, or 10 business days.

This is where recruitment process outsourcing (RPO) becomes key. 

Faster Hiring Process

Outsourcing recruitment to global BPOs can solve your staffing issues anywhere with a quick turnaround. 

Moreover, outsourced talents have the necessary resources, tools, and experience to streamline the recruitment process, resulting in shorter time-to-fill metrics and reduced time-to-productivity for new hires. 

When vacancies are quickly filled, it signifies the respect the company has for the candidates’ time. With this positive impression, applicants are more inclined to accept your job offer. As a result, this promotes better productivity, enhances engagement, and reduces the amount of HR resources spent on sourcing candidates. 

Reduced Recruitment Costs

Business leaders can minimize expenses and substantiate efficiencies by outsourcing recruitment specialists. 

While there may be fees associated with outsourcing services, these costs can be offset by the overall savings in terms of reduced internal recruitment efforts, advertising costs, and time spent on candidate sourcing and screening. Additionally, outsourcing allows organizations to avoid costs related to infrastructure, technology, and recruitment software. 

Say, you’re outsourcing recruitment services from the Philippines – you can strike down labor costs by at least 70% while still receiving quality services. 

Expertise and Specialized Knowledge 

A recruiter’s responsibility extends beyond merely fulfilling their day-to-day tasks. They’re also concerned with attracting hire-worthy candidates, building great relationships with past applicants, and establishing the company’s employer brand. 

All the while, they must stay on top of recruitment trends and continuously develop their skills to maintain a healthy workforce.

However, upskilling your recruiters can be costly and require consistent effort. Understandably, research shows that only 40% of workers undergo specialized training for their respective jobs – according to a survey.

How can companies gain access to a team of recruitment specialists? By outsourcing recruitment services.

With RPO, companies won’t need to spend time and money conducting extra training for their in-house employees. Rather, they can leave hiring responsibilities to the capable hands of experienced recruiters. 

By leveraging their expertise, firms can result in better candidate selection, improved quality of hires, and reduced hiring risks.

This is because outsourcing partners who specialize in talent acquisition have deep knowledge of the recruitment landscape. They stay abreast of industry trends, best practices, and effective strategies for attracting and assessing candidates.

Enhanced Employer Branding

The ever-evolving economy and high demand for a top-tier workforce have shifted the labor market into a unique position, making it increasingly difficult for companies to recruit skilled talents. For that reason, businesses can’t afford to receive any bad rep; otherwise, workers may hesitate to apply.

Here are some shocking stats that companies need to know: 

Now more than ever, businesses must work on establishing a strong employer brand driven by a good reputation. To do so, they can start by curating the best candidate experience possible for job applicants. 

Applicants are more likely to see opportunities for career advancement in companies they deem to be well-respected – hence, higher likelihood of more recruits.

Check out these best practices in forming a good experience for candidates to get you started:

  • Ensure easy application for job seekers.
  • Promptly update on their progress.
  • Let them know what to expect in the next hiring stages.
  • Guide them in every step of the way.
  • Maintain professional and respectful communication.

When candidates gain pleasant experiences from the application process, they tend to raise brand awareness and recommend the company to their peers through positive word-of-mouth. With a strong brand reputation, you won’t need to spend as much on your marketing efforts, as candidates will seek you out.

Your outsourcing partners can act as brand ambassadors and convey a positive yet consistent message about the organization’s culture, values, and opportunities. Consequently, organizations can uplift their reputation, attract high-quality candidates, and improve overall employer branding.

Flexibility and Scalability

The seismic shifts in the hiring landscape are inevitable, especially as economic uncertainties trickle down to businesses, leading to potential headcount fluctuations.

To keep pace with changing demands, businesses should be flexible in scaling their operations up or down – which is what RPOs are known for. 

Let’s take a look at how RPO can scale hiring efforts in an ever-changing market:

  • Providing you with the required size for staff capacities.
  • Using digital tools to search for eligible candidates.
  • Reorganizing your recruitment data pipeline and streamlining workflows.

Recruitment Process Outsourcing as Top Emerging Trend

The future of hiring lies in these three main tenets – automation, strategic organization, and better incorporation of company objectives and cultures. 

As skillful talents are turning into a number-one necessity for business leaders, companies must consider outsourcing recruitment process services so they’re quick to adapt with evolving recruitment trends.

Why is RPO emerging in the recruitment landscape? Here are 4 factors fuelling the shift in the labor market. 

Artificial Intelligence (AI)

AI solutions help companies assess a large volume of applicants and source ones who are valuable to the company, essentially making recruitment easier and more efficient.

Here are some roles that AI can take over in a hiring process:

  • Background screenings
  • Rerouting candidates
  • Onboarding of new hires
  • Pre-employment evaluations
  • Assessing the candidate’s cultural fit

In early 2023, generative AI innovations – such as ChatGPT and AI-Writer – are already growing at a rapid pace, receiving a total of $12 billion in investments. A McKinsey survey found that these AIs can condense up to 60-70% of employees’ time doing work activities. 

One of the technical features of generative AIs is their natural and human-sounding capabilities. This allows businesses to automate crucial recruitment documents such as job descriptions, email templates, and even candidate touchpoints.

Issues with AI-Generated Tools

While AI can offer enormous value in recruitment, it still can still be counterproductive for companies.

For one, job seekers who perceive AI-enabled job applications as untrustworthy and undependable will be less likely to complete their applications.

Furthermore, there are also potential legal ramifications that come with using AI-generative tools such as breach of intellectual property and plagiarism. Worse, these platforms can “hallucinate” non-existent facts and make them appear true.

To strike a balance with recruitment technology, RPO experts still need to incorporate a human touch in recruitment processes. They should leverage interpersonal and emotional intelligence in critical parts of the application such as explaining the company mission and vision, understanding the skillsets of candidates, and elaborating on compliance and regulations. 

Here, your outsourced recruitment team can take charge of these tasks and cultivate human connections. They also play a significant role in carefully scrutinizing and analyzing content produced by AI tools to avoid any negative implications. 

Social Media Recruitment

A whopping 90% of firm managers struggle to get the right talent onboard. To increase their chances of landing qualified hires, firms should boost online visibility and incorporate social media recruitment as part of their strategy.

About 5.04 billion are active in social media  worldwide in 2024. With the rise of TikTok, it has attracted a billion more users monthly. And on average, these online users spend 151 minutes a day browsing through social media and messaging apps. 

So, what do these numbers mean for firms? 

It signifies how imperative it is to expand their recruitment efforts on social media such as Facebook, Twitter, Instagram, LinkedIn, and even TikTok. By leveraging these networking sites, companies can promote their job openings at an affordable rate. For example, advertising a job ad on Facebook is more cost-advantageous and far-reaching than traditional recruitment methods.

Online platforms can also help firms effectively screen potential red flags. In fact, 67% of employers already leverage social networking sites to assess their applicants. While researching, over half (55%) of them detected content that led them to not recruit the candidate.

Thankfully, RPO agents from the Philippines and Colombia are well-versed about the benefits of social media recruitment. They have successfully reaped the rewards of social media’s revolutionary potential by generating higher leads and quickly landing skilled hires. By partnering with RPOs, companies can ultimately streamline their hiring process at a cost-efficient rate.

Process Automation

Earlier, we established that nuanced human-centric recruitment processes can’t be replaced with bots, no matter how sophisticated they may be. Nevertheless, tech still plays a vital role in reducing the administrative workload and improving employees’ well-being.

Unfortunately, a majority of organizations still treat automation as a lower-priority concern, with only 26% optimizing their work through technology. With so much on their plate, 42% of HR teams suffer from exhaustion.

Who can companies delegate these overwhelming responsibilities to? An outsourced recruitment crew in Colombia or the Philippines, of course.

Colombian and Filipino RPO specialists employ a systematic and innovative approach in automating mundane and repetitive tasks, which can help firms save time and resources and allow in-house recruiters to focus on their core competencies. 

For instance, Robotic Process Automation (RPA), an automation bot, is deployed by RPO agents to screen resumes, gather relevant data, and schedule interviews. While AI can execute intelligent tasks (like scanning for specific skills, characteristics, or keywords on resumes), RPA automates massive volumes of tasks at a high-speed rate. 

Data-Centric Recruitment

Employers can’t just rely on luck and gut feeling when it comes to recruiting applicants. To build a strong and reliable workforce, they should base their hiring decisions on facts and figures. 

Recruiters should regularly review predictive analytics, real-time data, and insights that will give them a glimpse into critical labor trends. With this information, employers can score better hires and streamline lengthy and inefficient hiring processes.

Fortunately, since RPO agencies are data-driven, they can help firms land the right candidates, retain skillful employees, build talent pipelines, and optimize hiring.

Outsourced recruitment specialists from the Philippines and Colombia gather and analyze relevant data from a candidate’s profile – including technical and soft skills, work experience, and educational background – to refine candidate-to-employee conversions. They then employ systems that measure key metrics such as cost, quality, and efficiency to guarantee hassle-free recruitment.

Partner With Outsourced Recruiting Teams in the Philippines and Colombia

Although businesses are returning to their normal operations, the pandemic still leaves a knock-on effect on the recruitment market. However, effective recruitment process outsourcing (RPO) services can elevate your hiring strategies by incorporating emerging recruitment trends and technologies.

In SuperStaff, we’re dedicated to enhancing the quality of your hires, delivering a meaningful candidate experience, and fueling your company’s competitive strengths. Besides, our offshore and nearshore excellence offers access to qualified candidates who are ready to hit the ground 24/7.

Contact us now and let our HR professionals assist you in your recruitment journey.

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