RPO vs Recruitment Agency — what you need to know

RPO vs Recruitment agencies

There’s no denying that recruitment is tough right now. Organisations are keen to get back on track after the challenges of the pandemic, but that means you need the right staff on hand.

But just as companies are looking to step up their hiring, we’ve hit the Great Resignation. The number of workers looking to leave their jobs has risen dramatically to nearly 20%, and many companies aren’t prepared.

We have too few skilled people to fill a vast number of positions. Prices are rising, as are wage demands. What is a Talent Acquisition Manager to do?

It’s definitely time to “get by with a little help from my friends”.

In times like this, smart HR and TA professionals reach out for additional help with their recruitment. And rightly so. But what help do you need, and where is the best place to turn?

We’re going to look at the two main sources of recruitment assistance: RPOs and recruitment agencies. What’s the difference, and which is right for you?

Let’s find out.

What is an RPO?

RPO stands for recruitment process outsourcing. Put simply, this is where you employ a third party to take over most or all of your recruitment process.

An RPO will contact potential employees in your name and will usually be involved in every stage of the recruitment process. In many cases, they’re already building your employer brand even before you’ve produced a job description for your first vacancy.

What is a recruitment agency?

A recruitment agency operates slightly more at arms-length. They act as a go-between for both candidates and employers.

Candidates give them resumes, and employers provide them with job descriptions. The recruitment agency then tries to find good matches between the two. 

In other cases, a company might give the recruitment agency their job description, and the recruitment agency can then post that advert online and create a shortlist of the best candidates.

What are the major differences between RPO vs recruitment agencies?

You’re probably getting a sense of how RPOs and recruitment agencies differ, but it’s important to be really clear about the differences.

Advantages of an RPO

When looking to find great talent, it probably doesn’t matter much to you where that talent comes from. The same isn’t always true for candidates.

When your RPO approaches potential employees, they aren’t necessarily aware of it. Your RPO acts on your behalf, with your employer branding, and provides a sense of personal connection with your organisation.

RPOs market themselves as ‘partners’. They are out there, representing you. They’re not just finding great candidates for you. They’re building a relationship with them.

This also means that an RPO won’t be suggesting roles with other companies to that great candidate. This can be a massive advantage if you’re looking for an in-demand skillset.

RPOs are also typically very hands-on. They can often work with you on all aspects of your recruitment, including employer branding, diversity metrics and analytics, and even onboarding.

Disadvantages of an RPO

The advantages of an RPO can seem very appealing, but this in-depth, bespoke service comes at a premium. RPO services can be significantly more expensive than typical recruitment agencies.

RPOs are mostly designed as medium or long-term relationships. If you are looking to fill a position urgently, your RPO might not be able to ramp up their efforts in the timescale you have available.

An RPO is an effective tool if you’re looking to make a large number of hires in a (relatively) short period of time. However, if you only have one or two staff to hire, there are probably more efficient ways of doing so.

Advantages of a recruitment agency

Recruitment agencies often have many potential recruits on their books already. They’re able to highlight your role to any candidates who might be suitable, giving you a quick and easy route to a large number of applicants.

If you’ve already put the work into your recruitment strategy, there’s no need to reinvent the wheel. A recruitment agency trusts you to have created effective employer branding and to know what you’re looking for in a new hire.

Because RPOs offer such a personalised service, it’s usually only possible to work with one at a time. In contrast, it’s normal to work with several different recruitment agencies simultaneously. This gives you access to a broader range of candidates.

Recruitment agencies are often quite cost-effective, especially if you already have a good HR team to cover other aspects of recruitment, such as interviews and onboarding.

Recruitment agencies build a different type of relationship with job seekers. They may have helped candidates to find previous roles, and prospective employees may find them to be a trustworthy third party. 

This can work to your advantage if you’ve built a good relationship with your recruitment agency.

Disadvantages of a recruitment agency

A recruitment agency is there to do two things; find great applicants for your jobs and great jobs for their applicants. When it comes to the finer details of recruitment, that’s down to you.

Remember that recruitment agencies are trying to sell their candidate to you and your role to the candidate. If you don’t have a long-term relationship with an agency, they may focus more on securing the hire (and payment) than finding the right person.

Even with the best will in the world, a recruitment agency might not know enough about your business to help you find a candidate who fits your corporate culture and values. You’ll have to judge that at the interview.

If you have a lot of hires to make, a recruitment agency that operates on a ‘per hire’ basis could prove surprisingly expensive. Traditional contingency recruitment agencies generally charge a percentage of the annual salary of your new hire, which can add up fast when you’re bringing in multiple new people.

Which should you choose?

Ultimately, it’s up to every organisation to decide how much help they need with recruitment and which model suits them best.

Your decision will most likely depend on your current situation, in terms of how many roles you have to fill (and what kind of roles they are) and how well developed your recruitment processes are, as well as how much capacity your HR team has to spare.

It doesn’t always have to be a binary decision, however. Some recruiters are finding a way to straddle the line between RPO and recruitment agency.

For example, crooton operates as a recruitment business — with a difference.

  • We offer recruitment marketing help for companies that want additional support
  • We can shortlist and even schedule interviews
  • Our unique employer fencing technology lets you focus your adverts on highly localised areas, including a competitor’s premises
  • And we use a fixed price recruitment model where we charge one flat fee no matter how many candidates you hire from a single campaign. This can significantly reduce your cost-per-hire

Get in touch with one of our friendly, knowledgeable team members to learn more about how crooton can solve your RPO vs recruitment agency dilemma.

And be sure to keep reading our blog to help you keep up to date with all the latest recruitment news.