Frequently Asked Questions (FAQ) about Recruitment Outsourcing Companies
Recruitment process outsourcing (RPO) is still a new concept for many businesses, but unanswered questions shouldn’t keep companies from taking the next step. We’ve consolidated answers to the most common questions about recruitment outsourcing companies, RPO, outsourcing services, pricing, staffing, executive search, and contract recruiting.
- What does RPO stand for?
- What is RPO?
- How does RPO work?
- Why RPO?
- RPO vs. Staffing – What’s the Difference?
- What are the types of RPO models?
- What is a contract recruiter? How is RPO different?
- How much does RPO cost?
- Is RPO worth the cost?
- Can an RPO firm help with executive search or seasonal hiring?
- What metrics do RPO companies use to measure RPO success?
- Do RPO firms have annual or project hiring minimums?
- Will I retain control over hiring decisions?
- Is my business too small to benefit from RPO?
- Can I customize RPO solutions for my needs?
- Do RPO firms provide recruiting technology?
- Can RPO companies integrate with our existing applicant tracking system (ATS)?
- Will candidates be a good fit for my company culture?
- How does Hire Velocity perform compared to its competitors?
What does RPO stand for?
What is RPO?
RPO or Recruitment Process Outsourcing is the full or partial outsourcing of a company’s internal recruiting function to an external recruiting specialist. The external recruiting specialist, or RPO firm, assumes the role of the company’s recruiting function by owning and managing the recruitment process and related recruiting relationships, technology, etc. While RPO is typically used for direct hire employees, RPO can also be used for contingent labor with contingent RPO.
Learn more about what is RPO.
How does RPO work?
RPO solves talent acquisition challenges for your organization by partnering with your internal recruiting team, building on your company culture, and providing value-added recruiting services to deliver high quality candidates. RPO engagements typically start by assessing your recruiting needs, evaluating your current recruiting processes and technology, identifying areas of opportunity, then designing an RPO solution that fits the exact requirements of your organization. Typically, the RPO process includes 5 phases.
Learn more about the 5 phases of recruitment process outsourcing and how RPO works.
The goal of RPO is to solve business challenges for your organization. RPO companies do more than just fill open positions; they serve as recruiting partners, acting as an extension of companies and offering comprehensive human capital strategies and solutions designed to achieve specific business goals. The benefits of RPO are extensive, including:
- Flexibility & Scalability – RPO solutions can adapt to the changing needs of your organization.
- Cost – Companies utilizing RPO solutions consistently indicate cost reductions as one of the greatest benefits, in addition to the improved candidate quality.
- Access to Quality Talent – RPO providers are experienced in sourcing for hard-to-fill roles and have built extensive candidate databases and networks.
- Speed of Hire – With access to the best recruiting technology, industry expertise, and a broad referral network, RPO can significantly reduce the amount of time it takes to fill each open position.
- Technology Capabilities – RPO providers offer unmatched access to best of breed technology that drives greater efficiency in the recruiting process.
- Target Sourcing Strategies – Successful RPO solutions rely on the development of custom, targeted sourcing strategies to identify the hard to find passive candidates for clients’ positions.
- Deep Talent Analytics – RPO providers invest in the technology necessary to help identify trends in your talent data and predict future performance and retention.
- Compliance & Risk Mitigation – RPO firms protect your company from legal and financial liabilities by maintaining compliance with the everchanging regional, national and international labor laws.
- Employer Brand & Candidate Experience – RPO firms help you assess and strengthen your employer brand to ensure your recruitment marketing resonates with the target audience.
Learn more about recruitment process outsourcing benefits.
Learn more about all aspects of RPO with a comprehensive guide to outsourcing recruitment.
RPO vs. Staffing – What’s the Difference?
The goal of a staffing agency is to fill short term needs quickly. That goal is reflected both in the price you pay and in the quality of the candidates. Staffing models place an incentive on speed over quality of candidates, since they won’t get paid if they don’t fill the position first.
When you partner with an RPO firm, you can expect better candidate quality, more tailored and effective recruitment strategies, lower costs, and greater flexibility as compared with a staffing agency. RPO optimizes your recruitment process, streamlines your operations, and focuses on long-term business strategy while reducing costs.
What are the types of RPO models?
There are several different types of RPO models that an RPO firm can offer to a client based on the client’s requirements. The most common RPO models include:
- Enterprise RPO – Enterprise RPO delivers a comprehensive recruiting solution that spans the breadth of your company. Enterprise RPO may take the form of fully outsourced, full cycle RPO engagements or targeted partial cycle RPO engagements depending on your needs. It includes talent acquisition strategies, flexible delivery models, strategic advisory solutions, talent analytics, and technology consultations. Enterprise RPO creates the most closely integrated partnership between the RPO solutions provider and the client. Learn more about Enterprise RPO.
- Partial Cycle RPO – In the partial cycle RPO model, you choose which recruiting activities you want to outsource and which ones you prefer to handle internally. You may engage us for select a la carte processes such as interviews, reference checks, pre-screening, candidate offer management, onboarding, or career transitions. With Partial Cycle RPO, we provide the specific services you need when you need them. Learn more about Partial Cycle RPO.
- Project RPO – Project RPO helps your company scale up hiring quickly, but it is in place for a limited timeline and has clearly defined objectives. This model is ideal for short-term hiring needs, such as a growth period or expansion into a new market. You choose whether to outsource the full recruiting cycle or only parts of it. Learn more about Project RPO.
- On-Demand RPO – On-demand RPO applies an RPO solution to an immediate need, such as a seasonal hiring demand for additional workers or a spike in hiring needs. Experienced recruiters supplement the efforts of your internal team with flexible talent acquisition services, industry-specific best practices, the ability to scale up or down quickly, and the option to turn on or off monthly with no extra fee. Learn more about On-Demand RPO.
- Contingent RPO – Contingent RPO acts as an extension of your talent acquisition department, giving you better quality contingent labor at lower cost, as compared to managed services providers (MSP) with vendor management systems (VMS). It blends the power of tried and true RPO models with the flexibility you need to manage a contingent workforce. With contingent RPO, you get the benefits of direct sourcing through an outsourced provider. Learn more about Contingent RPO.
What is a contract recruiter? How is RPO different?
Contract recruiters are professional recruiters that typically work with several client companies to place candidates for a specific period of time. They usually charge an hourly rate, and they take their candidate network and talent pool resources with them at the end of the contract. Contract recruiters may be used to place candidates for an interim period, such as maternity, paternity, or long-term medical leave. Typically, the contract recruiter will handle the administrative or transactional functions of the recruitment process, leaving little or no time for deeper sourcing of qualified candidates. Learn more about contract recruiting.
By contrast, RPO integrates with your team to offer customized strategies based on your needs. With RPO, you get greater flexibility and long-term hiring strategies, and you typically pay a lower fee per hire. You also keep your talent pipeline and qualified candidate lists when the engagement is finished.
How much does RPO cost?
Pricing varies based on volume, position type, location, services, and other variables. RPO solutions typically fall into one of these four pricing models:
- Monthly management fee based on volume, position type, or services contracted
- Cost per hire based on volume, position type, location, or other variables
- Management fee + cost per hire
- Cost per transaction based on predefined transaction such as requisition opened, interview scheduled, or offer extended
In an RPO arrangement, the overall cost-per-hire will be significantly lower for multiple hires, as compared with a staffing agency.
Is RPO worth the cost?
Can an RPO firm help with executive search or seasonal hiring?
It depends on the RPO firm that you select. Many RPO companies offer ancillary talent solutions. In the case of Hire Velocity, we offer both executive search and specialty search solutions to help you find and hire the best leaders for your company. Our search consultants have experience recruiting for C-level and senior executive roles as well as individual production roles. Learn more about executive search.
Typically, RPO companies offer RPO solutions to help with your seasonal hiring and other short-term hiring needs. For hiring contingent labor, Hire Velocity offers contingent RPO solutions, and for hiring permanent employees, we offer a variety of RPO solutions.
What metrics do RPO companies use to measure RPO success?
When engaging with an RPO firm, you need to be able to measure the impact of the RPO engagement on your organization. To do so, it’s important to have specific metrics that you can measure before and after an RPO engagement. Typically, metrics used to measure RPO impact, include:
- Hiring manager satisfaction
- Cost per hire
- Time to offer
- Time to fill
- New hire retention
- New hire turnover
- Candidate satisfaction
- Recruiting process conversion rates
In addition to these metrics, other KPIs are based on the specifics of the engagement. During the due diligence and implementation phase of a RPO engagement, companies will discuss and finalize the RPO service level agreements, which will reflect the key metrics that both companies will be measured against and held accountable to.
Learn more about RPO service level agreements.
Do RPO firms have annual or project hiring minimums?
Many RPO firms have hiring minimums, either on an annual or per project basis. Some RPO companies require a minimum of 200-500 hires to engage.
However, at Hire Velocity, we believe that every company should have access to solutions that will save you money and improve the quality of new hires. If you’re currently handling all recruiting by yourself, RPO can free up the time your HR and hiring teams are spending on recruiting. Alternatively, if you’re currently relying heavily on staffing agencies or headhunters, RPO can improve the candidate experience, improve your employer branding, increase your candidate quality, improve new hire retention, and decrease your recruiting costs.
Will I retain control over hiring decisions?
Yes, if you want to retain control over the hiring decisions. In most cases, RPO companies will give you the option to either retain or release control over hiring decisions.
Learn more about how recruitment process outsourcing companies engage and determine how hiring decisions are made.
Is my business too small to benefit from RPO?
No. If you need quality candidates to facilitate business growth, RPO can help you, although you’ll have to find an RPO firm that doesn’t have hiring minimums, like Hire Velocity. Quality people make the difference between success and failure for a business, which means that finding top quality candidates is important no matter how large or small your company.
Learn more about how recruitment process outsourcing companies can work with companies of any size.
Can I customize RPO solutions for my needs?
Yes. Whether you are interested in diversity recruiting initiatives, short-term project hiring, or a comprehensive recruiting strategy, an RPO company can design a solution that will achieve your desired goals and promote your brand without squeezing you into a one-size-fits-all hiring approach.
Do RPO firms provide recruiting technology?
Yes, as part of RPO solutions, RPO teams typically have access to the RPO firm’s technology suite. If your company doesn’t have an existing recruiting technology infrastructure, RPO companies may offer client recruiting portals, possibly at an additional cost.
In the case of Hire Velocity, our recruiting teams have access and rely heavily on our proprietary recruiting platform, which includes technology to streamline sourcing, screening, scheduling, interviewing, reporting, and more.
Additionally, either as part of a broader RPO solution or as a standalone service, we will evaluate your technology platform and make recommendations based on your organization’s strategy. Typically, our technology evaluations include:
- Enterprise architecture and strategy
- Workforce management roadmap
- Applicant tracking systems
- Sourcing platforms
- Social recruiting applications
- Talent attraction automation
- Integration with back office legacy systems
Can RPO companies integrate with our existing applicant tracking system (ATS)?
Yes, typically RPO companies can and will utilize your company’s existing applicant tracking system (ATS), although you should ask if there’s an additional cost associated with that. RPO firms work with a large number of companies, all with different applicant tracking systems or other recruiting technology, so the RPO teams are well-versed in a variety of recruiting and HR platforms.
At Hire Velocity, we can seamlessly integrate the RPO process with your applicant tracking system, or we can use our own technology platform to deliver the results you’re looking for with any of our RPO solutions.
Will candidates be a good fit for my company culture?
Cultural fit has proven to be a strong indicator of success and retention for employees. As such, it demands that effective recruiting strategies include assessments of candidate soft skills, patterns of behavior, and value systems in addition to their education and experience.
Learn more about how recruitment process outsourcing companies recruit for candidates that fit your company’s culture.
How does Hire Velocity perform compared to its competitors?
Hire Velocity has been consistently recognized over the years as both a top RPO company as well as a top executive search firm by leading industry organizations and news outlets. We received multiple awards for exceptional client satisfaction and customer service as well as thought leadership in recruiting, HR, RPO and executive search.