Overwhelmed by the concept of RPO metrics? Many organizations are turning to external service providers to help them take some of the stress out of talent acquisition. If you’re thinking about outsourcing your recruitment processes, chances are you want to know they’re in good hands. But how do you find out? RPO metrics are a great place to start.
What Is RPO and What Does It Stand For?
RPO stands for recruitment process outsourcing. It refers to the process of an employer transferring responsibility for their recruitment processes to an external service provider.
Recruitment process outsourcing is just one example of business process outsourcing (BPO). Many organizations choose to outsource key business processes in order to reduce the amount of time, and money, they spend on HR tasks and administrative duties. This gives them more time and resources to dedicate to other, more valuable, core business objectives.
What Are RPO Metrics and Why Are They Important?
RPO metrics are a series of criteria used to measure the effectiveness of an RPO solution. A variety of different key performance indicators (KPIs) can be used to achieve this, including:
- Job listing views
- Number of applicants
- Time to hire
- Cost per hire
- CVs received to interview ratio
- Interview to offer ratio
- Offer to acceptance ratio
- Quality of candidates
- Diversity of candidates
- Candidate satisfaction
Some of these metrics are quantitative, while others are qualitative.
Quantitative metrics are measurable, and use numbers to score and rank performance. For example, when examining cost per hire, a lower number will indicate that an RPO provider is efficiently hiring candidates at a low cost to the customer.
Qualitative metrics are more language based, and often require more interpretation. For example, candidate feedback can be investigated in order to learn first hand about the kind of recruitment experience an RPO provider creates.
RPO metrics are incredibly important in helping organizations assess the quality of their RPO provider. They help businesses understand whether the RPO provider they’re using offers a good return on investment (ROI), and therefore whether or not they’re getting good value for money by outsourcing their recruitment processes.
Organizations can also turn to RPO metrics in order to determine which aspects of their recruitment strategy can be improved. This helps them and their RPO provider offer a smoother recruitment process in the future, allowing them to find, hire, and onboard candidates more efficiently, and more effectively.
What Are RPO Providers and What Do They Do?
RPO providers are companies which specialize in recruitment processes. They have the technology and expertise to carry out recruitment more efficiently and more effectively than their customers could manage with an in-house solution.
Organizations which offer RPO solutions will also often offer market intelligence and predictive analytic services. In this way, they use data and insights to constantly improve the recruitment services they provide.
The services offered by RPO providers can vary, but they’ll commonly include:
- Developing recruitment strategies
- Communicating with candidates and recruiters
- Handling critical recruitment processes
- Interviewing and assessing candidates
- Onboarding new hires
RPO models can often be easily scaled to meet the needs of companies of all sizes, providing solutions that address their specific recruitment needs. Some RPO providers even offer other services, such as workforce management and talent transition services, which continue to support an organization after the initial recruitment process has been completed.
How RPO providers manage recruiters and drive performance
One of the main ways RPO providers help to drive performance in the recruitment process is by aligning the recruitment strategy of a business with their overall organizational goals.
This ensures employees are recruited who are well suited to the culture of each individual business. Recruiters with expertise in the client’s particular niche are used where possible, ensuring that their recruitment strategy is well-informed, and aligns with current industry trends.
RPO providers will source candidates from a wide variety of channels, giving them the best possible chances of finding the right person for the job. This could include job boards, agencies, and social networking sites such as LinkedIn.
One of the biggest ways that RPO providers continually drive performance is by paying close attention to Recruitment Metrics. A wide variety of metrics is regularly monitored and analyzed in order to identify areas for improvement.
Processes are standardized throughout recruitment in order to ensure consistency and efficiency, and these are continually reviewed and improved as necessary.
How do RPO providers report and analyze KPIs?
RPO providers employ a range of tools and techniques when reporting and analyzing KPIs.
Most RPO providers make use of an applicant tracking system (ATS), which allows them to accurately track metrics such as applicant volume, cost per hire, and time to fill.
An ATS can be used to store and sort resumes, input and edit candidate profiles, and manage job postings. As such, it provides a central location for data capture and analysis, allowing for a variety of metrics to be tracked and reported from one location.
How Do You Measure RPO Performance?
Measuring RPO performance can be achieved through the tracking of various metrics and KPIs for recruiters. Tools such as applicant tracking systems can be used to gather data relating to these metrics, which can then be analyzed and reported in a variety of ways.
Top 4 metrics to measure your RPO performance
There are four key metrics that should be tackled in order to measure RPO performance.
Cost per hire
Cost per hire (CPH) measures the average cost incurred to hire one new employee. Expenses such as advertising, recruiter salaries, onboarding costs, and RPO costs should all be included when calculating cost per hire.
A low CPH indicates that your RPO provider is efficiently hiring new employees, and is therefore providing a better return on your investment.
Time to fill
Time to fill measures the number of days a position is open before a candidate is placed into the role. It begins as soon as the job advert goes live, and ends once a candidate has accepted an offer and their start date has been scheduled.
A short time to fill indicates that your RPO provider is able to quickly and effectively Attract High-Quality Candidates, and efficiently move them through their recruitment processes.
Interview to offer ratio
The interview to offer ratio is used to determine what percentage of interviews are yielding job offers to candidates. Spending time interviewing candidates who are unlikely to be offered positions is a waste of time and energy for you, your RPO, and the candidates.
A high interview to offer ratio indicates that high-quality candidates are being selected for the interview process, and that the candidate criteria your RPO provider is using is aligned with your company values and requirements.
Offer to acceptance ratio
Offer to acceptance ratio measures how many offers of employment are accepted by the candidates they’re presented to.
A low offer to acceptance ratio may indicate that your RPO provider isn’t making expectations clear to candidates, or to you.
A good RPO provider will determine a candidate’s seriousness about making a career move early on, and will work to find candidates whose needs and motivations align with what you can offer as an employer.
How Can a Recruiting Metrics Dashboard Help Your Business?
A Recruiting Metrics Dashboard is a tool which allows you to visually track and analyze your various hiring metrics. By gathering all your metrics into one place, you’re presented with a single source of truth which allows you to draw accurate conclusions about your RPO provider.
Using a recruiting metrics dashboard grants you many benefits:
- More easily identify trends in data, making it easier to spot patterns and identify areas for improvement
- Data is all gathered in one place, making it easier to take well informed, data driven decisions quickly, which increases productivity
- Full visibility of hiring funnel
- Improved Diversity Insights, and better visibility into other key areas of hiring policies
- More easily identify bottlenecks and inefficiencies in hiring processes, and make well informed decisions about how they could be improved
- Better determine the value of a RPO provider, and demonstrate it to stakeholders
Leverage the Insights of RPO Metrics with Recruitment Reporting Software
Recruitment reporting software enables you to quickly and easily track and analyze your RPO metrics, allowing you to make good, data driven decisions based on your insights.
Oleeo’s recruitment reports boasts a series of pre-built metrics, analytics, and visuals to help you identify peaks, troughs, and trends in your recruitment data. Oleeo Insights takes things a step further, providing you with key insights into how your RPO provider is performing, and what changes you need to make to achieve, and exceed, your recruiting goals.
But that’s not all. You also get access to a range of other features, such as diversity analytics, data visualizations, and real-time results tracking. Everything integrates easily via API or spreadsheet upload, while remaining compliant with all the latest data protection regulations and privacy frameworks.
Why not book a consultation today, and find out just how much you can revolutionize your recruitment with Oleeo.