Career Development

Recruitment firm vs RPO

Startups have several options available to them when seeking support in their recruitment. Among them, the two best-known models are the RPO and the recruiting firm. While the two solutions have similarities, key differences remain.
This article presents the main differences of the two models, a comparison of the advantages and disadvantages and recommendations on the choice of one or the other of these approaches. Should you choose an RPO consultant or a recruitment consultant?

What is RPO (Recruitment Process Outsourcing)?

RPO or Recruitment Process Outsourcing literally means Recruitment Process Outsourcing.
A company using RPO will entrust part or all of its recruitment processes to a service provider. The scope of missions may vary. Here is a list of the scope of activities that can be entrusted to RPO:

  • Sourcing candidates on Linkedin and CV libraries
  • Management of specific projects such as implementation of an ATS (Admission Tracking System) or a recruiting CRM
  • Work on the employer brand
  • Jobposting of job offers on different job boards
  • Sorting of CVs received and interviews pre-qualifications
  • On boarding new employees recruited

RPO missions are generally divided into 3 types:

  • Partial RPO : Outsourcing of part of the recruitment processes, generally the most time-consuming and the most key at the moment.
  • Full RPO : Outsourcing of the entire recruitment process
  • RPO on demand : Intervention on specific needs

What is a recruitment firm?

A recruitment firm is a specialized agency, commissioned by its clients to fill one or more positions.
We also talk about headhunters.

The operating mode of a recruitment firm is generally as follows:

  • Pay for successdepending on a percentage of gross annual salary of between 18 and 30%
  • Payment if a candidate is recruited by the companysometimes with a deposit to be paid at the start of the mission.

For more information on recruitment firms, particularly in startups, find our article on best recruitment firms and our advice for choose a recruitment firm.

Looking for a recruitment firm specializing in IT, find our comparison of the best IT recruitment firms

What is the price of an RPO service compared to a recruitment firm?

Now let’s compare the cost of these two types of services.

A recruitment firm charges one-off services based on success. The amount is calculated via a percentage of fees which applies to the gross annual salaries of the recruited profiles.

Example: If the defined fees are 20% and the candidate is recruited at a salary of 50,000 euros, the fees charged will be €10,000.

The price of an RPO service is generally a fixed price defined according to the number of days of missions and an ADR (Average Daily Rate). To this package can sometimes be added bonuses linked to the number of recruitments carried out by the service provider over the given period.
Thus the Average Daily Rate (ADR) of an RPO is between 450 and 650 € per day. The premiums paid depend on the model. They are included in a range between 1500 and 6000 €.
Thus, the monthly price of an RPO is estimated at around €12k per month.

Advantages and disadvantages of recruitment agency versus RPO

THE benefits of RPO compared to recruitment firms are:

  • By paying for a number of days, you know the service provider’s commitment, where the recruitment firm has no commitments of resources
  • The RPO can intervene on subjects related to direct recruitmentsuch as working on the employer brand or setting up recruitment tools and processes within your company
  • THE RPO will be dedicated to your business, since he is paid on a daily basis, where the recruitment consultant deals with several clients in parallel.

On the other hand the disadvantages of RPO compared to recruitment firms are:

  • THE price of the service can quickly soar depending on the number of days needed to complete the mission
  • There is no commitment to results when the RPO invoices for a daily service. The RPO has an obligation of means but not of results
  • For recruitment of strategic or rare profilesthe mission of the RPO can be limited since it is necessary, in this case, to have specific expertise, a substantial network and significant resources to find ideal candidates

Summary: When should you prioritize RPO over recruitment agencies?

Synthetic, RPO and recruitment firms are not solutions to oppose since they do not necessarily apply to the same cases.

If you want recruit standard profiles and usual for your company or startup, and you would like to deploy processes or tools, RPO can be a good choice.

If you have some strategic recruiting needsurgent or in short supply, you will have to consider going through a recruitment agency.

How to choose an RPO when you are a startup?

The main criteria to evaluate in a search for an RPO provider are as follows:

Knowledge of the professions recruited

Does the service provider in question know the jobs you usually recruit for? If you are a startup, does the consultant know the startup jobs ? Does he know the tech jobs ? So, he must know:

  • Understand the skills to look for within your industry
  • Know how to discuss the positions in question with candidates
  • Know the search channels associated with these candidates

The references

Does the service provider have interesting references in your field:

  • Has he recruited similar profiles in other companies?
  • Has he worked with players within your sector?

Strong references will support your choice of RPO.

Cultural fit

The feeling must necessarily pass well at the cultural level. The RPO will recruit profiles who will have to integrate into the culture of your startup. It is therefore essential that you are convinced that there is a real understanding of the company culture by the service provider.

Knowledge of recruitment tools

A good RPO must be at the forefront of market tools in order to use the best current recruitment solutions during their mission, and potentially implement them for you. So, he must know:

The price of the service

Obviously, the cost of the service will be decisive in your choice. As seen previously, the average TJM of RPO generally varies between €450 and €650 per day.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button