RPO Agency Vs Traditional Staffing: Knowing Your Options
“The advance of technology is based on making it fit in so that you don’t even really notice it, so it’s a part of everyday life.” – Bill Gates, Founder of Microsoft
In a labor market that is so tight and competitive, businesses often have to turn to outside sources to help them achieve their staffing goals. More often than not, the most frequently faced issue by these employers is the question of whether they should go with a traditional staffing agency or an RPO (Recruitment Process Outsourcing) agency. Both sound like they perform similar functions on the surface. The truth of the matter is, there is a significant difference between the two service entities.
Unlike your old-school staffing agencies, RPO agencies are dedicated to your hiring process from start to finish. This means that they take a more hands-on approach to the process. From sourcing and screening the candidates to ensuring the long-term tenure of said candidate in the company. They become an extension of the employer.
In this article, we will try to give you a bit of a clearer perspective as to what each does and how they differ from each other. This should help you identify which would be best suited to your needs when the moment comes.
Both RPO and Traditional Staffing have thier advantages, you need to decided which works best for you.
The main function of a traditional recruiter is to connect the employer with the candidate. Typically they do the recruitment under the brand name of the employer in question. However, their service fees are based on the number of employees that they recruit. This policy of getting paid as per the number of candidates that have been sourced means that these traditional recruiting firms are more inclined to hire at a rapid rate. Efficiency is the name of the game here. They hire them and then move on to the next hiring job.
Looking at it from the outside, this is a good option for employers looking to fill the ranks at a moment’s notice. However, it is not so great for the long-term prospects of the company. A business that wishes to grow may not reap the riches through this particular strategy. There is no guarantee of these candidates staying on for long and there is also no assurance that they will be up to the standards that you expect.
Advantages of an RPO Agency
Now, if we look at RPOs on the other hand, it’s more a process where the employer hands over a part of, or the entire recruitment process to an external agency. The unique advantage here is that the process is more integrated. An RPO agency offers custom services to the employer based on their staffing capabilities, goals, current technology, and the ethos of the company.
“It’s impracticable to halt the exponential advancement of technology.“ – Ben Goertzel, CEO, and Founder of SingularityNET
Unlike the random recruitment that one gets with the traditional recruiter, the RPO agency takes full responsibility for the hiring process. This relationship also carries a higher degree of accountability. The RPO agency’s job is to ensure that your candidates have long-term prospects with your business and that you benefit from this placement and grow. It’s like having a personal business consultant to help you find the right people for the job. The RPO agency focuses on three big areas: making sure that the company culture is well-suited for the candidate and that the candidate has a good recruitment experience, reducing the cost of premium labor, and enhancing the employee retention rate within an organization.
Aside from the overall function and capabilities, there exists a wide margin of difference between traditional recruitment and recruitment process outsourcing services. Let’s get into the details of that.
Ideal Candidate or Just Filling the Position
In both cases, you could do reasonably well when it comes to finding the right candidate, be it through an RPO agency or any other recruiter. Staffing agencies are more suited for one-off hires where you can fill a specific role and fast. They are good for temporary fixes. Now, if you’re looking to reshape your long-term recruitment strategy and improve the talent pipeline, then the recruitment process outsourcing route is the way to go. Let’s look at the reasoning as to why an RPO agency tends to be better in the long run. Traditional recruiters measure their success based on the number of placements made.
Employers are also charged accordingly. This breeds a culture where the recruitment agencies generally tend to discourage the employers from creating referral plans or other direct methods as this would put a dent in the bottom line of the recruiter’s profits.
On the other hand, we have the RPO agency which tends to encourage sourcing candidates through all possible venues. Their primary goal is to ensure that you get the right person for the job, not that the post is filled as fast as possible. They source candidates through the employer’s website, social channels, job portals, and a vast referral network. This has a dual benefit of not only filling the role in question but also promoting a healthy employer brand image.
Traditional staffing agencies maintain more of a transactional relationship with the employer.
RPO Agency Vs Traditional Staffing: Transactional or Collaborative Relationship
Often overlooked, one has to consider the type of relationship that one wishes to have with their external recruiter. Traditional staffing agencies maintain more of a transactional relationship with the employer. As we talked about above, staffing agencies cater to need-based recruitment; that is to say, you have a role to fill, they fill that role for you as soon as possible. This is a good solution for those looking to fill those niche roles as staffing agencies mostly specialize in sourcing candidates with specific skill sets. Once the role is filled, they get paid and move on to the next recruitment job.
RPOs are the complete opposite, since they function as an extended arm of your talent acquisition department, they require a more collaborative bond with the employer. Don’t think of them as a vendor; rather a partner that works closely with your internal team to help establish and expand an ideal recruitment strategy. This is not short-term for the most part, and it’s also investment-heavy compared to the traditional option, but in the long run, it’s good for growth. It’s also not a set-it-and-forget-it option. You have to put in the work and nurture that collaborative spirit to succeed. If you are looking for a complete hand-off option, this is probably not for you.
Having said that, it should be noted that RPO agencies do offer an A-to-Z service where they take care of the entire hiring cycle and all the necessary activities within.
An RPO Agency Takes Ownership of Recruits
When it comes to rehiring from the same talent pool, it’s a bit of a challenge with traditional recruitment agencies. Think about it, they get paid per candidate. This means that in the future when you need to hire again, you can’t refer to the same candidacy pool that was presented to you by the recruiter without paying them a certain fee for that candidate. They ‘own’ the candidates in that way. This can make the prospect of rehiring an issue for the employer. Working with an RPO agency doesn’t carry the same obstacles. Their end goal is to make sure that the employer is well staffed for a long time.
This breeds a perspective that employers are the ones who have that ‘ownership’ over candidates, whether they were sourced by the recruitment agency or through other means. It makes things a little easier for the employer.
At the end of the day, you have to determine which option works for you. Each has its own set of benefits and drawbacks and the recruitment process outsourcing is not for everyone. That’s just the truth of the matter. Having said that, it is one of the best options out there for employers, especially in this cutthroat employment market of the 21st century. Weigh your options, business capabilities, needs and make the best choice for your business!