The majority of businesses will be faced with the need to recruit at some point in their lifetime, no matter their size or industry. Each business will approach recruiting slightly differently. Whilst larger businesses may have in-house recruitment teams, others may lean on recruitment agencies. Many businesses – especially those looking to fill at least 20+ roles a year will also utilise Recruitment Process Outsourcing (RPO).
But what exactly is RPO and how is it different from traditional recruiting? In this article, we explain how these models differ and which may be best suited for your business.
RPO VS Traditional Recruiting
To explain the differences between RPO and traditional recruiting, let’s first explain a little more about each of these recruitment solutions and how they work.
So, how does RPO work? This is when a business partners with an external provider to manage recruitment on its behalf. This can either be for the entire business or specific departments. An RPO provider can effectively replace or become your entire recruitment function if needed, managing the process on your behalf. Alternatively, they can complement and work together with the recruitment resource you already have. This can provide additional capacity or specialist expertise.
The level of service you choose to outsource to a provider will depend on your individual needs. The following specific services can be offered and handled:
- Hiring permanent employees, fixed-term contracts and contractors
- Support for workforce planning
- Working with internal teams to shape their hiring plans
- Creation of targeted attraction strategies adapted for each type of hire
- Delivery of multi-channel, inclusive sourcing strategies
- Coordination of interviews and testing requirements
- Robust screening, selection and offer processes
- Onboarding processes
Traditional recruiting delivered by recruitment agencies works via a much more simplistic business model. Recruitment agencies tend to work on a more transactional basis. They only actively source candidates when a vacancy is shared with them by a business. Businesses often put vacancies out to multiple recruitment agencies simultaneously so they will be competing for the same talent.
If you’re in need of recruitment support, you may well be weighing up the benefits of RPO vs traditional recruitment. However, these two options really are quite different. Let’s take a look at a few of the key differences.
Integration & development
Traditional recruitment options such as recruitment agencies work in an independent manner. They retain their own identity when sourcing candidates for open vacancies. Once they have found you relevant candidates and helped you fill your vacancy or vacancies, they step away from your business until the next time you need to call upon their services – whether that be in a week, a month or a year.
An RPO provider, however, will become much more integrated and rooted in your business. Providers work with a business via a more long-term partnership approach. They take the time to learn as much as possible about your company and exactly what kind of candidate would fit best into each team and department.
Their role goes much further than just filling vacancies. They also add structure to your recruitment process and ultimately, evolve and improve it in the long run. This helps you shape your hiring plans for the future and increase your recruitment success. Because all vacancies are managed through your RPO provider, they are often able to offer significantly reduced cost per hire vs recruitment agencies.
Whilst businesses of all sizes can use both traditional recruitment and RPO services, RPO in particular is arguably best suited for larger businesses that require high-volume hiring. This probably looks like 20+ hires a year. At this point, notable cost savings and process efficiencies can truly begin to be realised.
For traditional recruitment, this model may be better suited to small and medium-sized businesses that do not recruit in high volumes. Therefore, they do not warrant the longer-term investment of establishing an RPO partnership.
Another big difference between RPO and traditional recruitment, and a big ‘tick’ in the camp of RPO, is scalability. The beauty of RPO is that no matter whether you face an increase in hiring or a recruitment drop, RPO can scale with you to suit your requirements.
Traditional recruitment agencies have limited capacity and resources to handle surges in recruitment requirements. Therefore, they may not be able to cater for these additional demands or changes in requirements.
There is also a difference in payment structure between RPO and traditional recruitment. A traditional recruitment agency is likely to charge a high one-off fee for filling a vacancy. An RPO provider, due to their more long-term approach, is more likely to charge a monthly retainer to cover a portion of the delivery costs plus reduced variable fees upon the successful start date of candidates.
Again though, if a business is looking to fill at least 20 vacancies a year, chances are that an RPO solution will provide much better value for money than utilising multiple agencies. It also adds further value in other ways such as an improved process and experience for candidates and hiring managers, an enhanced employer brand and reduced time to hire.
Final Thoughts …
Whether RPO or traditional recruiting will suit you more will totally depend on your business and recruitment needs. There is no right or wrong option. If RPO sounds like something your business could benefit from, we at The Curve Group would love to hear from you. Whether you are ready to utilise our services or simply want to learn more about RPO and our HR support, let’s chat.
To learn more about RPO, check out our recent RPO webinar. It includes a really detailed overview of everything you need to know such as the different types of RPO available and how to identify your RPO needs.
Perhaps you’re not quite ready to commit to RPO – and that’s okay. We can also support you with our traditional agency recruitment services. Whether you have single permanent or contractor vacancies to fill, or peaks in hiring that you need support with, we can help.