Difference Between RPO & Recruitment Agency

As one of the principal functions of human resource management, talent recruitment involves the systematic process of attracting, identifying, screening, selecting, interviewing and finally hiring the most potential candidates. New solutions to finding the right talents for in-demand jobs have emerged over the last few decades as the workforce evolves. According to recent statistics, over 79% of the global workforce are passive candidates while the 21% are professionals who are actively looking for new opportunities. 

There’s no shortage of companies looking for help when it comes to sourcing talents. Many are familiar with a recruitment agency, which is also known as staffing agency or contingent agency. There is also the recruitment process outsourcing or RPO. Both are external firms with similar functions but have different methods to effectively fill in the talent gaps of an organisation. 

Let’s find out their differences and which one is right for your company. 

 

Recruitment Agency vs. RPO

Recruitment Agency RPO
Short-term, transactional partnership  Long-term partnership with the company
Speedy hiring for temporary vacant roles Candidate search and screening may take more time
Hires in volume or by bulk offering Spends more time in assessing the candidates
Paid on per-placement basis Monthly fees for entire recruitment cycle

 

A recruitment agency specialises in hiring temporary or temporary-to-permanent employees. They act as a ‘middleman’ between the workers and employers. Recruitment agencies typically hire by volume or bulk offering. They process recruitment for multiple companies in different industries on a tight timeline for temporary job needs, therefore, they perform a speedy process when screening qualified candidates for immediate roles. Once the recruitment agency has successfully matched candidates for the company and have filled the vacant roles, their responsibility to the company is completed unless the client hires them again for another recruitment activity.

An RPO, on the other hand, is more flexible and strategic in their recruitment process. They are more hands-on and spend time learning about the industry and the company they are servicing. RPOs have a solid talent pipeline of active and inactive candidates. Their aim is to build a long-term relationship with their clients. Moreover, a RPO’s flexibility allows them to work with clients onshore, offshore or nearshore. 

 

Types of RPO Engagements  

To clarify, RPOs are not a one-size-fits-all service but their flexibility extends to offering different types of engagements or agreements based on the client’s needs. Here’s a gist of the different types of RPO engagements:

On-demand RPO 

On-demand RPO or recruiter on demand engagement is suitable for short-term recruitment activity such as seasonal hiring spikes. An RPO can provide a dedicated recruitment resource on a limited engagement.

Project-based RPO

There are periods when a company’s in-house talent acquisition needs extra hands and will outsource specific projects. Also known as selective RPO or point-of-service RPO, project-based RPO helps companies scale their workforce efficiently. Mid-large and established companies can benefit more from a project-based RPO than startups. Some companies hire project-based RPOs to test whether outsourcing can be a good part of their corporate practices.  

Full-service RPO

A full-service RPO or end-to-end RPO will handle all the aspects of the recruitment process starting from requisition request to successful candidate hiring. They are responsible for the entire life-cycle and impact of the employee in the company. A full-service RPO is also called enterprise RPO and may also perform project-based or on-demand services. 

Consulting RPO

A consulting RPO provides companies with knowledge about the recruitment process. This includes giving advice about hiring  tools, platforms and structure to effectively set-up or improve a company’s HR department. Large companies often hire consulting RPOs to evaluate their process or employment brand. Startups can also reach out to consulting RPOs to learn more about the process of recruitment or if they are planning to have their own talent acquisition team. 

Hiring an RPO is practical and beneficial to any business—from startups, midsize to large corporations. RPOs are built for long-term partnerships with an established network of candidates, have creative recruitment strategies and reliable analytics on performance management and workforce insights. 

 

CXC is a global HR outsourcing organisation with 30 years of experience in workforce management. Our innovative and cost-effective solutions help companies gain a competitive advantage by improving efficiency while reducing risks

Contact CXC today to start enabling your future workforce.

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