Your company has way too many jobs to fill and not enough internal support to do it. Alas, you’re looking into an external agency to supplement or even take over your hiring process from the corporate side. So, what’s the best avenue for your growing company?
Recruitment Process Outsourcing Benefits
Recruitment Process Outsourcing (RPO) comes in different shapes and sizes, using a variety of techniques to find great candidates for companies both small and large. Recruitment process outsourcing benefits extend to both the on-demand and enterprise varieties, though there also notable differences between those two.
Providers use myriad terms to describe services, and different providers offer all or a subset of these services. This makes it challenging both for recruiting providers and customers to define each one, so we’ll do it for you.
Traditional enterprise RPO (also known as full-scale RPO, or just simply RPO) is a way your business can outsource its entire staffing administrative and recruitment processes at a potential savings compared with internal solutions. This essentially eliminates the need for a full, in-house HR team to be on the payroll. Enterprise RPO can be further broken down into two subtypes:
- Long-term, company-wide: A company hires a provider to handle the entire recruiting process, including technology and the results. <
- Job- or location-specific: This is very similar to the long-term arrangement, except that it's just for a certain job function or location (e.g. a call center).
On-demand RPO (also known as limited RPO, partial RPO, sourcing RPO, or project RPO) is an alternative in which your company partners with a team of recruiters or sourcers who become an extension of the existing HR or recruitment department. An on-demand outfit is going to supplement you with that extra help when a hiring surge comes, but won’t replace your entire hiring operation.
Before we get to the differences, let’s remember that both models share several benefits compared with other in-house and external agency methods. Both RPO options offer:
- Decreased time-to-fill
- Decreased cost-per-hire
- Higher interest in client success
And, yes, there are drawbacks shared by both on-demand and traditional RPO ideologies. They include:
- Being highly dependent on the recruitment agency’s quality and fit
- Productivity issues that are less prevalent in an on-site recruiter
- Being literally not worth it in terms of cost per hire when only a small number of jobs need to be filled
OK … How are They Different?
Now that you’ve been schooled on where both on-demand and traditional RPO score well and suffer from drawbacks, it’s time to dive into their differences.
Traditional RPO can handle large businesses -- think those with thousands of employees or who are Fortune 1000. Companies with multiple locations who want to standardize their recruiting processes or who are concerned that some locations don’t have adequate resources will benefit from this solution because of the economies of scale that an RPO can offer.
Therein lies the downfall of using the enterprise RPO model: Contracts can be expensive and may not offer a positive return on investment.
On-demand RPO offers the option of “pay as you go” services. On-demand providers all have slightly different pricing structures. Some, for instance, charge a simple hourly rate, while others charge a flat monthly fee.
Traditional RPO services typically last 12 months or longer. If you’re happy with your provider, that’s great.
Here’s the problem: RPO contracts are difficult to get out of, so if you want a change, good luck.
On-demand supplements, but does not replace, your existing HR or recruitment team, and support can be turned on or off depending your needs. You won’t be blindsided by long-term commitments or surprise charges. Contract lengths are flexible and short-term, with some offering “instant-on/instant-off” capability.
Is there a catch? Not really, other than the fact that most on-demand solutions are virtual, so if you need an on-site resource, this sometimes presents a challenge.
Which Form of RPO Passes Your Test?
You’ve studied up -- now what’ll it be?
Traditional enterprise RPO can meet the needs of a big-time business or one looking for long-term solutions.
On-demand RPO for small and mid-sized businesses is flexible and adaptable -- you can get through those hiring spikes just fine. On-demand recruitment process outsourcing benefits let your business expand in a carefully managed way, with team-based support from recruiters offering customized services.