BPO is passe, enter RPO

BPO is passe. Enter RPO "" the next big thing among emerging new-age business opportunities. 'Recruitment process outsourcing' (RPO) can be a heaven-sent for companies which need to do a lot of recruitment but do not have the resources or the inclination to handle the entire recruitment process on their own.

With attrition rates being 14 per cent or more in the IT industry, and some 35 per cent in the BPO sectors, finding right replacements in such large numbers is no easy task.

An RPO not only does an efficient job of handling the entire recruitment process for firms in an industry plagued by high attrition, it also cuts hiring costs 20-30 per cent and a significant reduction in hiring time.

There are further niches within the RPO business also. According to a Gartner study, some 35-40 per cent of the worldwide HR outsourcing market, which will reach $80 billion by 2008 by growing at a compounded annual rate of 12 per cent, will go into competency assessment.

"We need to go in for multi-location outsourcing of the recruitment process and this is where RPOs whose core competency is 'competency assessment' helps. They save resources and time," said Nitin Nidhi, manager-HR, Progeon.

Getting a firm to do just that, finding people best suited for the job, may be the dream of many a CEO in IT. MeriTrac is such a firm, involved solely in 'competency assessment' for other firms. MeriTrac is neither into training nor placements. "They have assessed lakhs of candidates," added Nidhi.

The firm, started in 2000, focussed on the IT sector. But with the BPO boom, MeriTrac diversified its offerings to suit the BPO sector as well.

"An effective RPO standardises recruiting processes, enabling applicant tracking through all the stages with technology and deploying trained resources to run the process on a large scale," says Madan Padaki, director-business development, MeriTrac Development, MeriTrac.

As HR is becoming more visible and strategic across the IT sector, the adoption of RPO by the companies helps them replace the fixed recruitment costs with a flexible 'pay-for-performance' model that deploys recruitment rupees more efficiently. "This helps companies cut costs, improve quality of hiring and reduced cycle time," said Padaki.