Although there is often some confusion around the topic, RPO (Recruitment Process Outsourcing) does not operate the same or provide identical services as contingent staffing companies. RPO is a new concept in outsource recruiting that provides some similar services but on a wider, more in-depth scale.
RPO/RPI was actually founded via the need of clients whose outside recruitment efforts needed more than what a traditional staffing agency could offer.
In short, RPO takes over, to some degree if not completely, the responsibility for an entire segment of recruiting, or in some cases the complete recruiting effort for the entire company. The degree in which the RPO takes over is dependent on each partnership and is typically based on the client company’s strengths and talents as described in Graph A.
Once degrees of competency are established, the RPO takes the helm and fills the gap with the goal of reaching 100% efficiency.
Once optimum efficiencies are met, not only are headcount objectives met, but also a myriad of additional benefits are accomplished including increased employee retention, decreased cost per hire, improved candidate experience, shortened hiring cycles and more.
As demonstrated in the above Graph B, utilizing a staffing company provides the client with candidates. The focus and responsibility of the staffing company is to find candidates via advertising or direct recruitment, pre-screen them and perform first round interviews.
If these are the only areas the client company needs assistance with, then, staffing companies could be the correct choice.
However, augmented RPO, or what People Science terms RPI (Recruitment Process In-Sourcing), can also be utilized to meet these objectives and, as noted in the following Table 1, the benefits of forming an RPI partnership as compared to a typically staffing company partnership often provides a much bigger value while reducing cost considerably.
Table 1: RPO/RPI – Contingent Staffing Comparison
|Typically less expensive||No placement – no fee|
|Builds candidate relationships for the company as compared to the Recruiter
The client company owns the candidate base
|Builds candidates relationships through the Recruiter
Recruiter owns the relationship
|Data collected provides best practices such as time to fill, recruitment roadblocks both internal and external||No data
Best practices through the recruiter only
|Compensated to act in your best interest||Compensated to act in the Recruiter’s best interest|
|Builds pipelines for Future hires for the company
Reduces time to fill, spreads your culture and recruitment messaging continuously
|Builds pipelines for future hires for the Recruiter|
|Guarantees placement for at least 90 days or replace||Varying guarantees. Motivated to supply candidates who “make” the guarantee period|
|RPO/I and company have a shared interest protected by the RPO/I||Protects the Recruiter’s interest|
|Success based on Recruiter’s work, as well as, “making the placement”||Success based on the client hiring the candidate and the candidate lasting through the guarantee period|
Finally, whether or not an RPO/RPI partnership is the best choice will depend greatly on the amount of hires the client company intends to make and their internal ability to fully grasp a lower cost, but at least partially fixed pricing model.
RPO pricing model samples include:
- Straight monthly fees
- A combination of monthly fees and placement fees
- Fees per placement (this will typically include a commitment of making a minimum amount of hires)
Contingent staffing is now and will continue to be an effective vehicle for many outside recruiting efforts. However, as RPO/RPI has come of age, and as flexible models have now developed a history of successful outcomes, consideration of its merits and benefits may very well prove to be a better solution for even the simplest recruiting efforts.
For a list of additional benefits, case studies and general RPO information contact us at www.people-science.com
About the Author
Christine Nichlos is the Founder and CEO of Options Employment Resources and People Science RPO/RPI. People Science has been creating unique recruiting solutions via RPO and RPI since 1997 and is considered a 3rd generation RPO/RPI provider.