Recruitment process outsourcing (RPO) pricing is often a tricky subject to tackle considering many RPO buyers want cheaper solutions to their current in-house recruiting costs. Unfortunately, there isn’t an industry-standard flat rate for specific RPO services. With this in mind, in short, the price of RPO will depend upon your business’ specific needs and targets, in addition to your RPO provider. However, in this article, we would like to discuss this in more detail.
Part of the reason that prices depend on the RPO provider is that they employ various cost models that depend on the services provided and the length of the contract. Some of the common RPO cost models that are used by RPO providers are as follows:
For each successful client brought through the program and hired a fee is charged to the employer/customer. This cost per hire model can be used for short-term project RPO, in which the solution is based on accomplishing specific results or when the solution is only needed for a few months.
This model may also be a good fit for point-of-service RPO, in which specific recruiting functions are outsourced to the provider.
In this model, typically associated with enterprise RPO services and some emerging RPO services, a fee is paid to the RPO provider for working on an agreed-upon amount of positions. This cost may change depending on the agreement and has the potential to increase if the number of hires increases over a period of time.
This is a combination of the two models above and combines the payments for the success of the program with the consistent recruiting effort under the management fee. Again this model is ideal for enterprise RPO and point-of-service RPO.
In this sourcing model, the RPO provider will charge a fee for a set number of candidates who have been sourced, screened and are qualified for each open position. From this point, candidates will be passed onto the internal recruiters to continue the recruiting and hiring processes.
This model is well-suited to point-of-service and short-term project RPO.
In this model, a fee is charged for a specific process that is completed by the RPO provider. This means that buyers wanting on-demand RPO services may be charged per transaction, whether that is for an hourly rate or for each process and successful candidate.
Although we have discussed the models, these don’t mean anything if they don’t improve a business’ recruiting costs. When calculating your recruiting costs you need to include resources required for onboarding and data entry as well as the office space and utilities.
Essentially, comparing the costs between RPO and your internal recruiting is much more than looking at the pounds and monetary savings. It also means looking at the value of letting specialists take on certain functions so that your current staff can focus on fewer tasks and focus on their roles in the recruiting process.