Actually, it's more than that. Recruitment process outsourcing is the complete or partial outsourcing of an organization's recruiting process for traditional employees. An RPO will act as a company's internal recruiting arm for all or a portion of its jobs. The service manages the entire recruiting/hiring process from job profiling, interviewing, salary negotiations, through the on-boarding of the new hire.
Some companies start off by handing a project to an RPO vendor. Let's take a look at a likely scenario. Best Buy or Sears is opening a new store and needs 500 employees for that location. The outsourcing of that initial hiring would be a one-time RPO venture. The point is that the RPO vendor owns those requisitions: It's not working against other vendors or a company's internal recruiters.
Other companies like, Cegedim Dendrite (See Contingent Workforce Strategies, Winter 2010) entrusted its MSP with recruiting the company's employees as well, after finding that there were redundancies and overlap in the company's recruitment process of its temps and employees. Cegedim Dendrite believed that it worked for it to have one process that finds and recruits the talent irrespective of whether it was contingent or traditional.
Skeptics, however, believe that Cegedim Dendrite's method makes sense only for specialized, unique hiring where recruitment and sourcing is an issue and there's not a lot of volume of hires involved.
Once an RPO deal is signed, the vendor will assign a set number of recruiters to the client. An RPO contract is like any other outsourcing contract, with service-level agreements. These are usually multi-year engagements with risks as well as rewards tied to the deliverables. In addition to the initial fixed implementation cost, there is a variable component tied to the number of hires made.
The fee structure is also dependent on the type of positions and jobs going through the RPO. Cegedim, for instance, pays its MSP on the number of positions filled. Of course, it's important to note that any organization is willing to pay more for an IT programmer than for an hourly factory worker. IT workers come in with a higher cost per hire but in lesser volumes than lower-wage positions.
There are a few big staffing agencies, including Manpower, Adecco, Kelly Services, CDI and Spherion, that have RPO capabilities. It would be a good idea to check out a few of these companies to get an idea of what the service involves.