Recruitment process outsourcing (RPO) is where a specialist business either partially or fully takes over a company’s talent acquisition functions – often by harnessing innovative technology.

This trend in recruitment is an iteration on a wider outsourcing trend playing out across the wider business world. Historically, outsourcing was a way of tapping into greater subject-matter expertise (think accountancy, law, etc.) and procuring a more efficient and effective service. But in the last 20 years, this trend has been driven more by smaller, more agile companies’ abilities to harness innovative tech solutions more quickly than enterprises.

Two industries have been focal points for this trend: recruitment, and marcomms – which have strong overlap in that they both relate to advertising to audiences and converting them into assets (i.e., customers, or employees). As a result, they rely on some similar practices, and some similar tech.

In this article, we’ll focus on the recruitment industry and the technology enabling paving the way for the expansion of RPOs. We’ll look at:

• candidate sourcing, and how emerging technology helps recruiters pull data from disparate sources to produce shortlists more efficiently
• the advantages of modern recruitment technology, and some common challenges that companies experience in taking advantage of these solutions
• explore the key areas of employer and talent activity that can be enhanced with modern tools, including recruitment marketing and workforce planning.

We spoke to two recruitment experts: Darrell Rosenstein, managing partner of boutique headhunting firm The Rosenstein Group, and Toby Thwaites, managing partner for the UK at embedded talent firm Chapter 2, about their tech investments over the past 12 months.

Data-driven sourcing and candidate experience

To understand the emergence of RPO business models (and the adoption of similar hiring practices by enterprises), it’s helpful to consider the different ways of regarding jobseekers:

• as people
• …or as audiences / data.

This mindset shift happened decades ago in marketing and effectively transformed enterprise agencies into data services companies.

Recruitment is more resistant to this trend due to the naturally more human nature of work (as opposed to the relatively process-led work of advertising most goods and services, however creatively). Nonetheless, technology has augmented activity on all sides of the market: with recruiters able to reach more candidates at lower cost and candidates able to apply for more jobs with less effort.

In short: competition has ramped up. Getting results, therefore, means that all organisations must now take more sophisticated approaches to sourcing and screening candidates.

Legacy sourcing tactics such as the use of job boards, or using LinkedIn to both post jobs and search for talent, are limited in their scope and can also lead to an undesirable volume of unsuitable applications. Some 87% of recruiters use LinkedIn in their search, and while it may still be a useful tool in the early stages of the process, it is limited in highly specialised job roles and is a closed shop in terms of analytics and reporting. Its algorithms also prioritise the most active and loudest voices, which redirects candidate searches away from quietly competent workers in highly specialised fields.

Thwaites says Chapter 2 now uses People GPT, an AI-powered sourcing tool which draws information from more than 30 public-facing digital platforms. The solution responds to language-based prompts and scans profiles on specialised platforms such as Google Scholar, GitHub and Dribbble to provide real-time recommendations which may not have been unearthed by a manual search. The ability to unearth candidate data via a third-party platform, at scale and at speed, is a differentiating factor for recruiters.

“Most of the people we work with, they already have LinkedIn Recruiter, or they expect us to bring it with us,” says Thwaites. “That doesn’t provide a differentiating factor for you as a recruiter. That’s the way people have been working for a very long period of time.”

People GPT also allows recruiters to build personalised outreach messaging for individual candidates. Using data points scraped from their disparate profiles and the key requirements of the role, recruiters can tailor their messaging across a range of channels including the candidate’s email, if it is publicly available.

While the risks of automated messaging are widely known – particularly with the margin for error around accuracy and personal relevancy – Rosenstein advises that harnessing this technology effectively is now a hygiene factor as employers race to keep up with the competition.

The Rosenstein Group has found that where candidates used to expect “four or five” points of contact during the early stages of a recruitment process, it can now take ten or eleven interactions, including the serving of content as well as outreach. He’s invested in a new email outreach tool to help automate this work.

While this doesn’t diminish the need for face-to-face interaction or relationship-building, being able to map out the rhythm of the candidate experience and execute this in digital campaigning is now crucial.

Thwaites says “LinkedIn spam” and obviously AI-generated correspondence can be major red flag for talent. But with sufficient command of the data, personalising messaging should mitigate the risk of candidates being put off by automation.

“Candidates are less inclined to respond on LinkedIn today as there’s more noise on the platform,” he explains. But for Chapter 2 as a service provider…

“…that’s very useful, being able to design that value add. You can create a more sophisticated workflow setting up email marketing campaigns based on communication trees; how many times do you want to contact them? How do you respond based on their response?”

Furthermore, candidates’ engagement with these campaigns can be measured, using widely-used CRM software to count clicks, opens, replies and landing page engagement. This can quickly wheedle out genuinely interested or capable individuals, reducing time spent on chasing candidates and slimming down talent pools quickly.

The advantage here for an RPO supplier is obvious. Rather than solely leveraging headhunters’ sales patter and their little black books, forward-thinking organisations can process disparate sources of information gleaned from third-party data and AI-powered searches in order to largely automate candidate outreach. Indeed, this tech could free up resources, currently being spent on the minutiae of individual job searches, for talent strategy and employer branding.

Integrating modern technology can facilitate new recruitment practices

Implementing such practices will largely depend partly on the company’s ability to integrate modern technology into its existing processes and teams – which is anything but a given for many employers.

The core technology module used in recruitment is the applicant tracking system (ATS) which is used to track the entirety of a candidate journey, from the application stage, through vetting and onto onboarding. According to market research by JobScan, more than 98% of Fortune 500 companies use an ATS in their recruiting processes.

These solutions typically house a candidate database and a basic CRM, acting as the single source of truth for recruitment teams. However, as we’ve seen from the examples above, recruiters are increasingly building around this core ‘talent acquisition stack’ in search of incremental improvements.

That doesn’t diminish the importance of an ATS; it augments the role of this keystone tech into a central hub, from which other more iterative and specialised software can be leveraged either through white label integrations or the transfer of data through APIs.

Industry-leading ATS Greenhouse, for example, advertises more than 500 integration partners on its site. These partners allow clients to access industry-leading solutions in onboarding, analytics, sourcing and screening tools, while also integrating with commonly used tools such as Calendly for scheduling interviews.

Thwaites says any new technology investments made at Chapter 2 will be API-first solutions that can plug in and around their clients existing ATS. Navigate B2B has previously written on the importance of API-first technologies for digital transformation in various areas of the business, including marketing and sustainability. Read more here and here.

This is obviously an increased imperative for an RPO, as they work with a range of clients with different levels of technological maturity. Ripping out an integral platform such as an ATS usually isn’t feasible for an enterprise client. As Chapter 2 also works across different jurisdictions, they also need to be flexible to conform with data regulations in different markets. So the ability to build around existing technology reduces cost while enabling digital transformation.

Despite software vendors offering out-of-the-box integrations, actually leveraging and deploying the data housed within the ATS remains technologically challenging. Rosenstein says that while the outreach tools he’s invested in have allowed him greater control over candidate experience, he would like to see greater integration between the CRM and outreach tools to help facilitate relationship building communications with prospective clients.

“There’s still a lack of integration between email, LinkedIn and whatever you’re using for an applicant tracking system or a CRM, they don’t do it particularly well.

There’d be a lot of value in understanding, okay, here’s how to set up your marketing in a CRM package. And here’s how you would see who you’ve engaged with an organization. The AI recommends: here’s who you should be emailing today.”

What Rosenstein describes here is similar to an account-based marketing approach, and speaks to an opportunity for recruitment professionals and teams who can find new ways to harness and deploy their existing and newly sourced data.

It also speaks to a fast-evolving technology ecosystem of tools whose promise remains only partly realised.

In other industries – particularly in marketing – the businesses that have won are those which have sought to manage their data independently of any one software vendor; the presence of a ‘data layer’ is now par for the course in an enterprise stack. Similarly, IT consulting revenues are now heavily composed of data services.

It’s inevitable that the same will now play out in recruitment, with big wins both for technology vendors with sufficiently adaptable solutions, and RPO suppliers who can help employers to capitalise on these tools as they emerge.

How recruitment tech can produce better outcomes for an employer

To illustrate the opportunities here, let’s look at specific area of work undertaken by talent acquisition teams, and how they can be optimized with modern technology, focusing on:

• employer branding
• recruitment marketing
• attribution
• workforce planning

Employer branding (EB)

Many large organisations now engage in producing content around employee experience, using user-generated content and stories from within their staff to provide a snapshot of life at the company. This can include serving content on matters such as DEI or climate impact, presenting the organisation as a place where people can progress, or as a fun place to work.

Demonstrating return on employer brand has typically involved calculating the reduced cost of staff turnover against the overall spend on building that brand. For the most part, it typically results in a positive effect. A study by LinkedIn found that investing in an employer brand results in a 50% reduction in hiring costs. Chapter 2 founder Leo Harrison argues that ‘the best talent isn’t looking’; EB activity can create an inbound talent pipeline which attracts people to the brand, alleviating the costs of outreach.

The question – and a challenge for technology to solve – is how to make best use of this content and show a demonstrable impact on recruitment KPIs such as time to hire and cost per hire.

Most companies have the resources needed to do this at scale, though these resources often sit outside of the talent function.

The obvious one is the company website, which sits at the heart of most digital marketing activity. Many employers run a separate career site – which is sometimes hard to find, and runs the risk of fragmenting audiences; indeed, many website visitors, including customers, partners and competitors, could also make good employees.

Equally, if a potential recruit leaves the recruitment site and goes to the main company website, both the commercial team and talent acquisition teams would ideally want to track that activity and gain useful insights on the candidate.

The answer to this is to maintain a single website front-end, with separate back-ends for talent acquisition and marketing purposes (or ecommerce, if it’s that type of business). This gives both talent and marketing teams access to the core functionality they need, whilst the front-end provides a single environment for content publishing and tracking audience journeys.

Recruitment marketing

A further problem is that the recruitment team will nearly always operate a parallel CRM contained in the ATS, while the marketing team operates one or more CRMs for campaigning purposes.

For an enterprise employer trying to recruit at scale, the talent acquisition team may miss the advanced functionality of a modern marketing CRM; indeed, widely-used ATSs such as Loxo offer extremely restrictive email marketing functionality, lacking even the ability to format an attractive email. In some cases, the recruitment team and marketing team could be trying to reach the same candidate/customer with clashing messaging.

The optimal setup here will be to integrate a modern ATS with an existing CRM. This can give all teams access to the best tools whilst enabling a single source of truth on candidate data.

Of course, this also requires collaboration between the teams. Talent acquisition and marketing will need to agree on workflows, such as which triggers mark a contact as a priority for recruitment or general marketing, and how to coordinate those competing priorities ongoing. Normally, the API connection between the CRM and ATS will need to be customized and managed for the company’s specific requirements – incurring the need of at least some development resources.

Attribution

Proving exactly where a candidate first engaged with a campaign is notoriously difficult – but it’s crucial, because this allows companies to measure ROI on different recruitment approaches and shift budgets accordingly.

Typically, an ATS is able to track a candidate entry to a careers’ site, and while tactics like candidate surveys can help, it’s an inexact science.

Thwaites says a tool called RealLinks helps Chapter 2 demystify this process somewhat. The solution allows recruitment teams to leverage their existing workforce’s personal social media profiles to share content or promote job roles.

An integration with collaboration tools such as Slack, Microsoft Teams or an email client allows employees to post on their personal channels with a click of a button; referrals are then fed back into the ATS via a personalised link. This means that colleagues across the organisation can support the talent team with almost no increase to their workload. The platform is gamified, providing rewards for the staff members that generate the most referrals. RealLinks reports that 92% of their clients get referral hires “when and where they need them”.

Crucially, it can also help recruitment teams see which campaigns have resulted in high quality hires, improving future talent marketing campaigns.

Of course, many other non-recruitment-specific tools for attribution can also be used effectively. Free solutions such as HubSpot can can track website visitors’ activity and indicate how they arrived at the site, yielding greater insight on the performance of content and landing pages, and of marketing activity on external channels such as the company social media page.

Workforce planning

Previously, workforce planning has been an inexact science. In some cases it would be reactive, rather than proactive, as recruitment teams looked back over the previous quarter and pinpointed where they needed additional support. In other cases, companies would draw on market forecasts to anticipate workforce demand. But there has been great variability in companies to source and deploy such data effectively.

Thwaites says Chapter 2 uses a solution called Horsefly to deploy their data effectively. The platform combines internal data, from existing job descriptions and candidate information, with third-party market data gleaned from similar job descriptions posted on platforms such as LinkedIn, to allow for more holistic workforce planning. This can help to flag gaps in the current workforce, model scenarios such as industry-wide layoffs and prepare for hiring drives or freezes, and identify where to target recruitment efforts. Thwaites says,

“We can give our clients insights which are unique to them. There’s some insights which are very specific around meeting DEI goals and salary information which is more granular and accurate than other sources.”

These insights can also be combined with data from inside the business to allow for a more holistic approach to planning in general. For example, learnings from a recruitment-focused tool such as Horsefly could draw on data from the ERP (enterprise resource planning system), the technological centre of many large enterprises.

The ERP is already used to forecast fluctuations in trade and predict ROI on investments; being able to pull this data into the ATS could provide an additional complementary data source to help businesses forecast their recruitment needs.

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As we’ve seen in the first section of the article, emerging tech can also help source premium talent outside of the usual catchment areas, and it can also produce tangible results in other HR processes such as onboarding, building application processes and managing interviews.

To recruit better, harness tech, partnerships – or both

As we’ve seen, technology evolution is seeing recruiters evolve from networking business into information hubs, marrying internal client data with third-party sources to produce an altogether more productive recruitment function.

There is significant potential for firms to improve candidate experience, model future scenarios, source better candidates and reduce churn by adopting such modern solutions.

Recruitment, it’s fair to say, has historically not been the most technologically proficient business function, which has created the perfect environment for new RPO business models to take hold.

By bringing a tried and tested tech stack alongside embedded personnel, RPOs can craft and tweak their approach more quickly than their clients, and become facilitators of digital and organisational transformation.

With such specialists now firmly established in the market, there’s only one possible outcome: greater competition for talent – perhaps not in terms of jobs, but certainly in terms of their attention. In such a market, a company’s effectiveness as an employer will depend significantly on their abilities to partner with RPOs who have harnessed such tech – or, if they have the resources, attempt to harness it themselves.