Recruitment Agency vs Recruitment Process Outsourcing: Which is Right for You?
It’s no secret that the recruitment industry is highly saturated, with so many different service providers to choose from. One mistake that is often made, by both clients and candidates, is assuming that all of these agencies are the same. There are two main models that you’ll have to choose between: these are known as either recruitment process outsourcing (RPO) or a recruitment agency model. Looking from the outside in, the difference isn’t always clear.
In a competitive labour market, it’s vital to have a talent acquisition strategy that meets the needs of your organisation. It’s a common choice to outsource recruitment efforts, as skills gaps and shifting skill sets make recruiting the right people more and more difficult. So why wouldn’t we leave it to the experts, especially without the resources of having your own dedicated in-house team?
The recruitment industry is definitely a resilient one. In 2017/18, turnover for temporary and contract placements reached £30.85 billion, with permanent placements sitting at £4.84 billion. Despite a lot of uncertainties thrown in the mix, recruitment businesses continue to thrive and grow year on year. So, if you’re looking to outsource your recruitment to the experts, it’s important to understand the differences between what’s on offer to make sure you get the results you’re looking for.
Recruitment agencies are largely sales focused, simply because they’re billed on successful placement of candidates into an organisation. In an agency environment, there’s not a lot of exclusivity involved – meaning that other agencies are probably competing to fill the same role. An agency requires a constant stream of candidate placements in order to maintain their revenue and are very reactive to the jobs market.
Recruiters in this space are expected to sell their agencies services to organisations, as well as sell jobs to relevant candidates. The basic offering of a recruitment agency consists of sourcing and pre-screening candidates for you to bring in for interviews. Agencies are also known for specialising in specific roles or industries, meaning that if you’re looking for a specific skill set or you’re trying to fill a niche role, there’ll likely be an agency out there that specialises in what you’re looking for.
In its most basic form, recruitment agencies are there to make connections between candidates and clients by largely focusing on the sourcing function, then the process will be taken back by the client. This offering will still differ from agency to agency and their service offering may go beyond this, but understanding the basics will give you a good starting point for discovering which service will work best for you.
Recruitment process outsourcing has quite a different offering to a recruitment agency. When you choose an RPO provider, they essentially become an extension of your brand and handle the multiple stages of your recruitment process. They take over various steps, from sourcing, to interviewing, to employer branding and advertising – basically, they can take control of your end-to-end recruitment lifecycle.
RPO providers are more proactive than their agency counterparts, who act reactively. Because RPO are much more involved in your organisation, they spend time understanding aspects like your workplace culture and your overall strategy in order to integrate better with your business. They then use this knowledge to form a strategy that works for you, and essentially act as your in-house team.
The cost of RPO services will differ depending on the depth of their involvement and exactly how much you want them to take on, and for how long, but it is typically paid upfront.
Basically, RPO takes control of your entire process and takes into consideration your long-term goals, as they’re exclusive to your business. Recruitment agencies, however, are more concerned about speed and are often competing with many other agencies for the same roles.
Which is right for you?
The different models serve two very different needs. To start, it’s best to identify what your available budget is, what exactly is needed to meet objectives and what outcomes define success for your business. When you know exactly what it is you need to achieve, it will become much clearer which model is more appropriate.
Let’s start with what recruitment agencies are most commonly used for. If you have very low volume recruitment and have a one-off role to fill, it’s likely that the agency model will be more suitable for you. If you’re simply looking for a few hires or your having trouble filling a specific role, there will be an agency out there who already represents the type of candidates that you’re looking for. In so many words, they’re more suited to short-term projects.
Recruitment agencies are also commonly used for temporary and contract roles. In 2017/18 alone, the recruitment industry was responsible for placing 1 million temporary and agency workers on any given day – this makes up a very large percentage of the industry itself. Because of the speed often needed to fill these types of roles, agencies are the go-to. Temporary employment makes up such a large portion of the employment market, so many agencies are equipped with candidate pools ready to meet the needs of specific roles and industries.
RPO is more for evolving your hiring strategy by creating a long-term partnership. They integrate with your organisation to become an extension of your team, so trust, credibility, and flexibility on their behalf is a big consideration. If you know you will have a number of different recruitment campaigns over a long period of time and you’re looking to outsource the process, then an RPO is the right option. This can be the case in situations such as fast growth of an organisation, or you’re looking to drive long-term change in some way. It’s a very significant investment to make, so it’s important to find a provider that aligns with your values and can make a real impact in your organisation.