Recruitment process outsourcing (RPO) is a popular solution for businesses that want to improve their talent acquisition strategy, reduce their hiring costs and save time.
But how much does RPO actually cost? And what are the benefits of outsourcing your recruitment process to a third-party provider?
In this article, we will answer these questions and more.
We will explain what RPO is, how it works, what are the different pricing models and factors that affect the cost of RPO, and how to choose the best RPO provider for your needs.
We will also share some examples of how RPO can help you achieve your hiring goals and grow your business.
What is RPO?
RPO stands for recruitment process outsourcing. It is a service where you delegate some or all of your recruitment functions to an external provider that specializes in talent acquisition.
The provider takes over the responsibility of finding, attracting, screening, interviewing and hiring candidates for your open positions.
RPO is different from traditional staffing agencies or headhunters, which only focus on filling specific roles or providing temporary workers.
RPO providers offer a more comprehensive and strategic approach to talent acquisition, which includes:
- Designing and implementing a customized recruitment process that aligns with your business goals, culture and brand
- Providing dedicated recruiters, technology, tools and resources to manage your hiring needs
- Sourcing candidates from various channels, including job boards, social media, referrals, passive talent pools and more
- Screening and assessing candidates using various methods, such as resume reviews, phone interviews, online tests, video interviews and more
- Coordinating and scheduling interviews with hiring managers and stakeholders
- Providing feedback and guidance to candidates throughout the hiring process
- Negotiating and extending offers to selected candidates
- Onboarding new hires and ensuring a smooth transition
- Measuring and reporting on key performance indicators (KPIs), such as time to fill, cost per hire, quality of hire, retention rate and more
- Continuously improving the recruitment process based on data and feedback
RPO can be flexible and scalable according to your needs.
You can outsource your entire recruitment function or only certain parts of it.
You can also choose the duration of the engagement, whether it is short-term, long-term or project-based.
How Much Does RPO Cost? Cost Breakdown & Examples
The cost of RPO depends on various factors, such as:
- The scope and complexity of the services you need
- The number and type of positions you need to fill
- The volume and frequency of your hiring needs
- The level of involvement and support you require from the provider
- The quality and availability of talent in your market
- The pricing model and structure used by the provider
There is no one-size-fits-all answer to how much RPO costs.
However, there are some common pricing models that RPO providers use to charge their clients. These include:
Management Fee Model
This is where you pay a fixed fee to the provider for working on a certain number of positions or requisitions per month.
The fee may vary depending on the agreement or may have escalation factors if the number of hires increases over time. This model is typically used for enterprise RPO or white label RPO services.
For example, if you need to fill 50 positions per month across various departments and locations, you may pay $10,000 per month to the provider for managing your recruitment process.
Cost Per Hire Model
This is where you pay a fee for each candidate who is successfully hired through the RPO program. The fee may be a flat rate or a percentage of the candidate’s salary.
This model is often used for project RPO or point-of-service RPO services.
For example, if you need to hire 10 software engineers with an average salary of $100,000 per year, you may pay $5,000 per hire or 5% of the salary to the provider.
Management Fee Plus Cost Per Hire Model
This is a combination of the management fee model and the cost-per-hire model.
You pay a fixed fee for managing your recruitment process plus a fee for each successful hire. This model is also suitable for enterprise RPO or point-of-service RPO services.
For example, if you need to fill 100 positions per year across various departments and locations, you may pay $50,000 per year as a management fee plus $2,000 per hire or 2% of the salary to the provider.
Cost Per Slate Model
This is where you pay a fee for a set number of sourced, screened and qualified candidates for each open position.
The provider then hands over the candidates to your internal recruiters for further evaluation and hiring. This model is ideal for sourcing RPO or project RPO services.
For example, if you need to hire 5 account managers with specific qualifications and experience, you may pay $1,000 per slate of 5 candidates to the provider.
Cost Per Transaction Model
This is where you pay a fee for a specific process or task to be completed by the provider, such as initial screening, reference checks, background checks, etc.
You may pay an hourly rate or a flat rate for each process or candidate. This model is suitable for on-demand RPO or consulting RPO services.
For example, if you need to screen 100 candidates for a sales position, you may pay $10 per hour or $20 per candidate to the provider.
How to Choose the Best RPO Provider for Your Needs
As you can see, there are many options and factors to consider when it comes to RPO cost.
The best way to find out how much RPO will cost for your business is to contact different providers and request a quote based on your specific needs and goals.
However, cost is not the only thing you should look at when choosing an RPO provider.
You should also consider:
- The reputation and track record of the provider
- The quality and expertise of their recruiters and staff
- The technology and tools they use to streamline and optimize the recruitment process
- The communication and collaboration methods they use to keep you informed and involved
- The flexibility and scalability of their services to adapt to your changing needs
- The results and outcomes they can deliver in terms of time, cost, quality and retention
At Tribe, we understand that every business is unique and has different hiring challenges and opportunities.
That’s why we offer customized RPO solutions that fit your budget, timeline and expectations.
We have a team of experienced talent acquisition experts who can help you with:
- Employer branding and talent attraction
- Candidate sourcing and screening
- Interview coordination and scheduling
- Offer management and negotiation
- New hire onboarding and engagement
- Recruitment analytics and reporting
We also use advanced technology and tools to automate and enhance the recruitment process.
Whether you need to fill one position or hundreds, whether you need full-service RPO or point-of-service RPO, whether you need short-term or long-term RPO, we can help you find the best talent for your business.
How RPO Can Help You Achieve Your Hiring Goals and Grow Your Business
RPO is not just a cost-saving measure. It is also a strategic investment that can help you achieve your hiring goals and grow your business. Here are some of the benefits of outsourcing your recruitment process to an RPO provider:
- You can access a larger and more diverse pool of talent, including passive candidates who are not actively looking for a job but may be interested in your opportunity.
- You can reduce your time to fill by streamlining and speeding up the recruitment process, from sourcing to hiring.
- You can improve your quality of hire by finding candidates who match your requirements, culture and values.
- You can increase your retention rate by hiring candidates who are more engaged, satisfied and loyal to your company.
- You can enhance your employer brand by creating a positive candidate experience and showcasing your value proposition.
- You can free up your internal resources by letting the experts handle your recruitment functions, so you can focus on your core business activities.
- You can gain valuable insights and data from the provider’s analytics and reporting, which can help you improve your recruitment strategy and performance.
You might also be interested in our other article – 7 Reasons Why Outsourced Recruitment Pays Off (With Examples).
Ready to Take Your Recruitment Process to the Next Level?
If you are interested in learning more about how RPO can help you save money, time and hassle while finding the best talent for your business, we invite you to contact us today.
We would love to hear from you and discuss how we can tailor our RPO solutions to meet your needs.
At Tribe, we are more than just an RPO provider. We are your partner in talent acquisition. We are passionate about helping businesses like yours grow and succeed by finding the right people for the right roles.
Don’t let recruitment challenges hold you back from achieving your business goals. Let us help you take your recruitment process to the next level with our customized RPO solutions.
Click here to get in touch with us today!
