The differences between anRPO (Recruitment Process Outsourcing) and a traditional recruitment agency are subtle. The recruitment strategies used by the two are different, amongst other things like the services they offer, the charges they levy for the services, and how they screen and select the candidates.
The terms are used interchangeably and people often blur the lines between the two.
Understanding Recruitment Process Outsourcing
Recruitment Business Outsourcing is a business process wherein an employer transfers recruitment processes to an RPO partner. Keep in mind that the employer always decides the RPO model how much of the process has to be transferred to the agency; only the employee screening process may be transferred or you could opt for a complete package which includes employee screening, interviewing, assessment, onboarding and so on.
Unlike a traditional recruitment agency, an RPO partner acts as an extension of your on-site HR department and your organisation. So, the services they provide caters according to the company operations, the technologies and methodologies used, and the work culture established for existing employees.
An RPO partner’s service offering goes beyond just finding the right person for a role that has to be fulfilled quickly. They start from scratch and shoulder the responsibilities of conceptualising, designing, managing and executing recruitment processes. In other words, they take complete responsibility of the recruitment cycle and are accountable for the results that are obtained.
Apart from the responsibilities mentioned above, an RPO partner also provides insights into the effectiveness of various recruitment strategies of the company. They also devise ways to improve employee retention, build a solid work culture for employees, and reduce costs of premium labour.
The Role of a Traditional Recruitment Agency
Perhaps the only drawback of a traditional recruitment company is that it utilizes traditional hiring techniques and no longer serves as a viable recruitment solution when the company starts to scale its operations and hires more people.
The objective of a traditional recruitment agency is simple — connect the employer with employees. Again, just like the RPO, the recruitment agency represents the company or brand it’s working for. Only when the potential candidates are identified, assessed, selected, and on boarded will the agency receive payments. Of course, remuneration for the agency increases the more clients it serves and the number of successful placements.
For recruiters, working with a recruitment agency is beneficial as they do not have to build referral programs or funnel money into marketing and ad campaigns to reach out to candidates. The ball lies in the employers court in terms of payments made to the recruitment agency as they might only be liable to pay if the recruiter meets all candidate requirements and they are successfully onboarded.
Working with recruitment agencies is effective for employers who are just starting out as they can partner with more than one agency. Multiple associations only means that the employer gets access to larger talent pools. Moreover, the open job roles are also fulfilled quickly as recruiting agencies compete to fill the positions and receive their payments.
So, a recruitment agency is ideal for businesses in nascent stages. An RPO, on the other hand, is more suited for businesses that are expanding and wish to hire employees with whom they can forge long-lasting relationships.
Let’s take a look at a few more differences between an RPO and a traditional recruitment agency.
An Extension of the Brand
As mentioned before, an RPO devotes enough time to candidate research and relationship building. They answer most of the candidate’s questions and thoroughly understand the company’s core values and culture. Traditional recruiters do not go to such lengths to find candidates. RPOs act as your company’s brand ambassadors, making a good first impression and relaying your company’s voice and message to all the candidates.
Analyze and Report
Traditional recruiters neither stick around for too long nor do they deliver crucial recruitment insights and reports. RPOs are into long-term partnerships — their offerings help employers gauge RPO partner’s performance. They constantly analyse the recruitment process and provide feedback in case there are any lingering inefficiencies. They leverage state-of-the-art Applicant Tracking Systems (ATS) that can analyze the recruitment cycle and provide reports on candidate satisfaction, time and cost to hire, and retention rates.
The Employer-Recruiter Partnership
RPO recruiters are more suited for long-term partnerships where a strategic approach is taken to build a pipeline of active and passive candidates. The candidates in the pipeline are regularly assessed and contacted by the RPO so that they meet client requirements. In contrast, recruitment agencies are best for emergency cases where a candidate is urgently needed to fill a vacant position.
They work on a commission basis and prioritize filling up roles within a short time span. As such, their overall model hinges on finding ways to speed up the hiring plan and place as many candidates as possible.
The Recruitment Process
The offerings of all RPO agencies are more or less the same. What your company wants is where the differences between two RPO providers emerge. And these differences vary slightly. What you can expect from any RPO though are services that cover every aspect of end-to-end recruitment.
They’re extremely adept at giving recommendations and guiding you through the interview process. Even if your internal HRs want something like the job description for an open role to be created in-house, the RPO steps in to provide expert feedback. At the end of the day, an RPO agency’s approach is more hands-on, assessing skills, improving candidate experience, and running background checks.
A traditional recruitment agency, on the other hand, expects the employer to have a greater influence on the recruitment process. Given the nature of work handled by such agencies where they solely focus on finding talent for multiple employers in huge numbers within a tight deadline, your inputs and contributions will be crucial. Unlike an RPO who can either write the job descriptions themselves or provide recommendations for one, a recruitment agency may depend on you to write and provide.