What is RPO? Recruitment Process Outsourcing is “RPO is the long-term transfer of ownership of all or part of an employer’s recruitment process to a third-party specialist.” RPO models differ according to the RPO provider’s involvement in a given company’s recruitment process and, subsequently, also by their cost. RPO for small businesses should be flexible to accommodate their unique needs. Keeping up with hiring needs can prove difficult for small and mid-sized businesses. Many SMBs recognize the value of RPO due to its ability to “scale quickly and provide functional recruiting expertise”
Below we define the 4 basic types of RPO service models that small and mid-size businesses are taking advantage of for building a talent pool, candidate sourcing, and talent acquisition.
On-Demand
In an on-demand model, an RPO provider is available to help whenever the company needs them. This model accommodates companies that need results delivered within a tight time frame.
Companies can pick and choose which recruitment solutions they need such as sourcing, recruiting, screening, and interviewing. This is the most flexible approach when it comes to RPO models.
Typically, companies pay a cost-per-hire fee. This means companies pay the RPO provider for each hired candidate who makes it through the interview process. However, because this model follows a contingent basis, companies don’t pay the RPO provider anything upfront – only when a successful hire is made.
Project-Based
Like the on-demand model, companies use a project-based model when an RPO provider hires for a specific project or division of the company. Companies usually opt for this type of model when they aren’t ready to take the plunge and hire a fully-sourced RPO team.
The project-based model works well for rapid recruitment projects with a short-term initiative because it is a low-commitment approach. For example, if you have a specific need that requires a quick solution, a project-based model is likely your company’s best option.
When it comes to the on-demand model, companies pay RPO providers on a cost-per-transaction fee. Usually, this means there’s a fee for each completed process. The company and the RPO provider must establish and agree upon a cost for that process. Oftentimes, the two determine a set amount of hires for a certain time frame.
Fully-Outsourced
The fully-outsourced model contrasts against the on-demand and project-based models. An RPO provider is essentially responsible for a company’s entire recruiting process. This means an RPO provider performs all recruitment functions, including sourcing, marketing, and interviewing.
A fully-outsourced model ensures that your company is using a team of talented and knowledgeable recruitment professionals. Because of this, using the fully-outsourced model can significantly improve the quality of hires your company is getting. If you’re a competitive organization looking for the best talent, a fully-outsourced model is sure to get the job done. Plus, RPO can provide you with access to a number of recruitment resources.
The RPO provider is virtually an extension of the company’s in-house recruitment team in this model. The company only pays an annual management fee for their service. Usually, the RPO provider is working on recruiting for a certain number of positions at all times and is paid regularly because of this.
Fractional RPO – A Combined Approach
Lucas James combines the flexibility of the on-demand and project-based models with the high-quality recruiting of the fully-outsourced model to create what’s called Fractional RPO. We work on a week-to-week, fractional time and material basis. This allows us to make the best use of our time and resources as possible. Depending on a company’s needs, we act as an extension of their recruiting department or as an outsourced recruiting agency on a flexible basis.
If you’re a small or mid-sized business looking for a dedicated team that can provide you with cost-effective RPO models, check out our service pages or contact us.
Updated and republished: December 12, 2024