Scaling Your Talent Acquisition: Recruitment Process Outsourcing vs AI-Led Recruitment

Companies that currently rely on recruitment outsourcing are witnessing a new dawn emerging on the horizon: the possibility to bring recruitment back home, thanks to artificial intelligence.

A shift that promises efficiency gains and cost savings, but not just that.

In this article, we delve into the transformative power of AI in recruitment and the implications of both RPO and AI-led recruitment, to shed light on where we think the future of recruitment is heading.

Recruitment Process Outsourcing overview

Recruitment Process Outsourcing is a form of recruitment where the responsibility for finding potential candidates is outsourced to an external party.

The essence of the method is simple: minimal involvement of the HR department in finding qualified candidates.

Unlike internal recruitment, where the recruitment team manages everything, RPO involves external staffing agencies.

To kick-start a successful RPO process, an agreement defining the project scope, and collaboration between the RPO provider and the client to create job descriptions are set-up. Once hands have been shaken, the RPO provider starts using various recruiting tools and techniques to attract candidates, assesses applicants, presents top talent, facilitates the interview scheduling and onboarding processes - et voila: the deal can be sealed.

RPO thrives on two main features: external expertise and resources.

While these main features offer numerous benefits, they also come with potential drawbacks and challenges.

The benefits of RPO

• Reduced workload: we all know by now: outsourcing tasks alleviates the workload. RPO is no exception. By entrusting candidate sourcing, screening, and engagement to an RPO provider, HR teams and hiring managers can focus on core activities instead of losing valuable time on time-consuming tasks.
• Scalability: Whether recruitment demand surges during growth periods or tapers off during slow times, RPO providers can adjust resources and capacities accordingly, ensuring that recruitment efforts remain efficient and effective, no matter the circumstances.
• Expertise: RPO providers stay ahead of industry trends, best practices, and emerging technologies. Their specialized knowledge, skills, and experience in talent acquisition and recruitment strategies bring fresh ideas and innovative solutions to the table.

Bon, in short: by outsourcing recruitment processes, organizations leverage specialized knowledge, access talent networks, and scale resources, sure, yet, to optimize hiring efforts and achieve strategic talent acquisition goals, organizations should consider the drawbacks and challenges associated with outsourcing recruitment processes. Knowing that: this side of the RPO-coin shines just as brightly.

The drawbacks of outsourced recruitment

• Loss of control: Without steering the wheel of recruitment, organizations may risk losing connection with recruitment activities and decisions made by external providers.
• Costs: While RPO will save costs in certain areas, yes, it  incurs expenses as well. Service fees, contract negotiations, ongoing management costs: they are unavoidable costs for using RPO. Especially for high-volume recruitment needs, this can require digging deep into budget-pockets.
• ‍Limited flexibility: RPO providers often operate with rigid processes. These might not seamlessly align with specific organizational needs or cultures, leading to mismatches between candidates and the organization and inefficiencies in the recruitment process.

To mitigate risks, organizations must carefully select RPO providers that align with their values, culture, and strategic objectives. Or, they can explore a different path.

AI-led recruitment overview

We know that AI-led recruitment sounds intimidating at first. The idea of relinquishing control and comfort is daunting.

However, where we are now, the reins are still in the hands of human recruiters. They determine how much control is retained and delegated to AI since it’s about collaboration, not surrender.

We covered more aspects of AI-led recruitment in the articles below:

• How AI is reshaping recruitment - and why the time to act is now
• A vision for the future of recruitment: From AI-enabled to autonomous hiring
• 6 top use cases of generative AI in recruitment
• AI-driven recruitment: The before and after states of the hiring process
• Implementing AI in recruitment: A framework to get you started

To give a short overview, the idea behind AI-led recruitment is that all the steps in the hiring process that don’t require live human intervention should be handed over to artificial intelligence workmates or assistants.

But here’s the catch: Autonomous recruitment uses intelligent AI agents and automation to not only automate tasks but also make independent hiring decisions, from candidate sourcing and shortlisting to following up with clients or job seekers.

This might sound futuristic, but it's a concept rapidly gaining traction.

While AI-assisted tools are already making waves, autonomous recruitment goes beyond that. Unlike its assisted counterpart, which relies heavily on human involvement, true autonomous recruitment operates with minimal human intervention, independently selecting the best candidate based on pre-defined criteria.

However, autonomous recruitment isn't just about speed. It's about empowering your Talent Acquisition (TA) team to focus on what matters most: the candidate.

By automating repetitive tasks, AI frees up TA professionals to dedicate their time to strategic initiatives and building strong candidate relationships. This shift creates a more strategic and candidate-centric approach to hiring.

You can learn more here: Autonomous recruitment - What is it and how do we get there?

So now let’s look at the benefits and drawbacks of this approach.

Pros of AI-led recruitment

• Efficiency: Sifting through talent pools, scanning thousands of resumes, handling heavy admin tasks: in today's recruitment landscape, the process overshadows the people. Luckily, AI is here to lend a hand. AI chatbots handling initial candidate engagement, virtual assistants managing schedules, AI-based applicant tracking systems organizing applications, automatically scheduled video interviews to streamline the process. AI handles all this work, operating seamlessly 24/7. In doing so, AI can significantly shorten the time-to-hire and boost efficiency.
• Reduced costs: Designed to work with minimal human intervention, AI systems reduce reliance on human labor, minimize human errors, and decrease the cost-per-hire.
• Improved hiring quality: AI tools can efficiently search and analyze vast talent pools, process resumes, identify candidates that best match job requirements, and cast a wide net across geographic regions, enhancing quality of hires. Job seekers, in their turn, benefit from AI as it integrates with social media for broader reach. Drawing from large amounts of information, AI can bring valuable insights about candidates to the forefront, once more, boosting the quality of hires.
• Data-driven insights: AI tools can make data-driven hiring decisions by identifying patterns associated with successful hires over time. Providing real-time updates and predictive analytics, AI helps organizations foresee hiring trends and needs, enabling decisions to be based on objective data and facts rather than intuition or gut feeling.

And yes, we know: we champion the benefits of AI-led recruitment. Nevertheless, we are well aware of its potential drawbacks too.

Cons of AI-led recruitment

• Knowledge gaps: Effective implementation and utilization of AI requires knowledge and skills that some recruitment teams may lack. However, you don’t need to be an expert in machine learning to get started with AI in recruitment. In fact, tools like Carv can be used right away, with only basic understanding of where AI can help in the hiring process.
• Bias concerns: AI algorithms can inherit biases from their training data. Organizations must actively seek out and address these biases and, once identified, take measures to mitigate them.
• Human touch remains important: Now, AI can help find the best talent, sure thing, but will never be as skilled as a human at understanding nuances. To prioritize candidate experience, AI-driven recruitment must maintain the human touch beyond metrics, cultivating meaningful connections with job seekers, and fostering long-term retention with new hires.

Equipped with this information, let’s see how to choose the best solution for your needs: RPO or AI-led recruitment.

How to choose the best solution for your needs

Both methods have unique benefits, so much is clear. The choice for the best solution depends on specific business needs and strategic objectives and aligning recruitment strategies with organizational goals and culture.

When can RPO be the right solution?

RPO can be beneficial in the following scenarios:

• Companies with high-volume repetitive hiring needs.
• Organizations lacking internal recruitment expertise.
• Sectors with specific hiring needs or high talent competition.
• Businesses with fluctuating hiring needs.
• Companies with limited recruitment budgets.

When is AI-driven recruitment the right choice?

• AI-led recruitment is suitable for companies of all sizes. Small companies can use artificial intelligence to streamline their recruitment processes, benefiting from the efficiency and scalability of AI. Large companies, on the other hand, can leverage AI to screen and pluck large numbers of candidates effectively.
• Businesses looking to automate tasks and improve their hiring effectiveness will find AI-led recruitment valuable. By letting AI virtual assistants do the repetitive admin work, human recruiters can spend time on what they’re best at: building relationships with candidate and clients. This allows HR departments to optimize their workflows and focus on retention and quality of hires.
• AI can help organizations lower the cost-per-hire and time-to-fill, so it’s well suited for companies that need to operate more efficiently and scale their talent acquisition efforts while having limited recruitment budgets.

And the best part is that there’s not a single approach to making AI-led recruitment work for you. AI leaves the choices up to you - for more on this, check out this article: Implementing AI in Recruitment: A Framework to Get You Started.

Over to you

We believe that AI-led hiring is the future. But AI is not here to render RPO obsolete.

Sooner or later, everyone, including staffing agencies and recruitment service providers, will use AI to work more effectively.

With the AI integration-journey now in full swing, one thing is certain: The role of artificial intelligence in recruitment is to assist, not replace human recruiters. AI is not a threat but a catalyst for innovation that pushes the industry forward, helping companies optimize their hiring efforts to achieve strategic talent acquisition goals.

Those who dare to innovate will emerge as leaders in attracting, retaining, and nurturing the best talent.

We encourage you to start getting familiar with AI-led recruitment - and we’re here to show you around if you need some help. Just book a call with our team below, and we’ll gladly show you how Carv’s AI for recruiters can support your team in bringing admin work down to zero.