Welcome to the Talent Acquisition MasterClass! This weekly video series will deepen your understanding of the talent industry through valuable insights and strategies from our founder Tim Schumm. In this video, we’ll introduce our approach to talent acquisition, known as RPO or recruitment process outsourcing. Learn the typical cost-per-hire, how it contrasts against traditional recruiting, and the estimated amount it can save you. Check back in next week to learn about the top issues and frustrations that come with the traditional recruiting model.


“The following text was generated from an automated transcription. Please excuse any errors.”


At Lucas James Talent Partners, we do Recruiting Process Outsourcing or RPO, as it’s commonly known in the talent acquisition industry. I often get asked the question, what is RPO? What is the difference between traditional recruiting and why does it make sense for organization? So we’ve mapped out a common example that I see with companies in the small, medium-sized business space as well as growth-based technology firms. Let’s take the example, which I often see is an organization that needs to make ten hires over the course of an entire year.


Candidates come from a few different avenues. One would be employee referrals or network-based referrals, where someone that someone on the team knows refers candidates in. The second would be through internal resources. This could be job postings or internal employees on LinkedIn, someone on the internal team that’s attracting a Canada poll to make successful placements. And then the third would be outsource. So this is traditional recruiting companies coming in and providing a service to source, screen, and select qualified candidates for these organizations.


And how most people know traditional recruiting firms is that they charge very high fees for every placement that they make. Typically, it’s 2025 30% in some cases of first year salary. Organizations making ten hires, let’s say they get three from referrals, they get four from internal resources, and unfortunately, they need to outsource three positions to traditional firms at a $75,000 average salary. Let’s just use the low end 20% fee. That’s going to be $15,000 per hire that you need to outsource.


Multiply that by three, you’re going to get a $45,000 budget for an entire year just to fill these three openings. We typically work with small, medium sized businesses and growth phase technology companies where they’re very budget conscious and they’re looking for an alternative solution. And I’m going to show you why RPO is a good route for that. So under the RPO model or again, recruiting process outsourcing, how it works is you can basically tap into our team of senior recruiters and dedicated sourcing specialists for a fraction of their week. So for two days a week, three days a week, five days a week on up, you can tap into my team on a variable week to week basis.


You can flex up, you can flex down based on your needs, and you can turn us on and turn us off if need be during the time that we’re engaged. We can fill multiple openings during that time. And that’s really where the cost savings come from and drives the cost perhaps down pretty low. So under this model, the rule of thumb that I like to use for $15,000 on one hire for the same cost as one hire through a traditional firm. You can hire my team for two days a week for an entire quarter.


You can use us to source candidates. You can use us to screen candidates. You can use us to provide bandwidth for you so say you can’t get around to those 200 applicants that came through your job posting that you had just put up, we can provide that outsource service for you and generally RPO runs about 40% to 60% more cost effective. Now, RPO isn’t revolutionary. In fact, most large, large organizations, Fortune 1000 type companies, enterprise type companies, this is how they go about outsourcing their talent acquisition.


They have a lot of volume, they have a lot of budget and they’re looking for a cost effective solution for that. So what we’re doing at Lucas James Talent Partners is bringing all the benefits of RPO down to the small, medium sized business level as well as growth phase technology companies that really need a cost effective solution. So as a result, in summary, it’s cost effective. It’s a dedicated model. There’s a lot of flexibility because you can flex the team up and down depending on your hiring needs or busy periods and it’s also very high quality solution that you’re getting.


This is what RPO is this is why RPO is different than traditional recruiting firms and this is why it makes sense not only for small or medium sized businesses, but in my opinion for all businesses.