What is RPO? Recruitment Process Outsourcing is “a form of business process outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external service provider,” according to the Recruitment Process Outsourcing Association. There are a few different models for RPO when it comes to engagement and cost. They vary in terms of the RPO provider’s involvement in a given company’s recruitment process.
Keeping up with hiring needs can prove difficult for small and mid-sized businesses. RPOA’s Industry Report: 2018 Talent Acquisition and RPO Trends suggests many SMBs are seeing the value of RPO and its ability to “scale quickly and provide functional recruiting expertise.”
Below we define the 3 basic models for RPO engagement that small and mid-size businesses are taking advantage of.
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.
Unlike a fully-sourced RPO model, the company 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, meaning the RPO provider is paid for each candidate they bring in who makes it through the interview process and is hired. However, because this model follows a contingent basis, the RPO provider isn’t paid anything upfront- only when a successful hire is made. To learn more about the inefficiencies of this payment model, read our blog post Why Do Recruiting Firms Charge So Much?
Similar to the on-demand model, a project-based model is used when a company uses an RPO provider to hire 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. If you have a specific need that requires a quick solution, a project-based model is likely the best option for your company.
When it comes to the on-demand model, RPO providers are typically paid a cost-per-transaction fee. This means a fee is charged when a specific process is completed. The company and the RPO provider must establish and agree upon a cost for that process. Oftentimes, this takes the form a set amount of hires being determined for a certain time frame.
The fully-outsourced model contrasts against the on-demand and project-based models. It is when an RPO provider is 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 and provide you with access to a number of recruitment resources.
The RPO provider is virtually an extension of the company’s in-house team in this model. They are retained by the company and paid 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.
What We Do
Lucas James combines the flexibility of the on-demand and project-based models and 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’re able to 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, contact us.