How Much Does RPO Cost? Models and Comparison!

There is a lot of confusion surrounding how much recruitment process outsourcing or RPO costs. The process of recruiting is expensive, so it’s only natural that one assumes that RPO prices would be costly as well. But how recruitment process outsourcing pricing depends on a lot of factors, and there are packages that you can avail of even on a tight budget.

Acquiring efficient and skilled employees must be the priority of the company if it wants to achieve profits. Several businesses worldwide are incorporating RPO agencies into their recruitment processes to achieve various business and recruitment goals. The recruitment process outsourcing pricing is based on the model you select. Let us find out about key RPO models first, and then discuss RPO prices or recruitment process outsourcing fee structures.

RPO: Overview Of Models

Enterprise RPO

Enterprise RPO, also known as fully outsourced RPO, is the complete outsourcing of the company. Most of the posts in the company are left to the RPO recruiters. The RPO provider is in charge of all elements of manpower sourcing in this model.

The RPO provider has a lot of responsibility in this case. It’s a model that affects the company significantly as the recruiting process is outsourced top from to bottom. It helps in employment branding as RPO can help recruit the best candidates for posts in a company in one go. It is a long-term and permanent recruiting method. Company-wide outsourcing in alignment with the company’s culture is a great solution!

On-Demand RPO And Modular RPO

On-Demand RPO is when the company resorts to outsourcing to fill specific posts on a short-term basis. It’s a viable solution for the company to receive immediate assistance while not making a longer commitment. It is a cost-effective method of making sure the needs of your team are met.

Modular RPO is an effective method for organizations to scale up their capabilities. It combines the best of both worlds- you can choose the number of recruitment functions you want to outsource for different types of positions.

Project-Based RPO

Project-Based RPO is suggested for short-term recruitment needs. It can serve as a pilot for a longer commitment in the future. It’s best suited for specific projects that have a well-defined goal within a short period of time. For a company to test RPO practices, this is the best solution. It’s a great way to start outsourcing. The RPO agency manages the acquisition of candidates for a particular project.

If your team lacks members with specialization, a project-based RPO can provide effective solutions. The time of hiring the employee is defined by a definitive start and termination date. This staffing strategy works well for hiring workers that fit the company’s culture without making a long-term commitment.

Project-based RPO services offer companies qualified candidates under a budget. The cost is dependent on only your needs, so you don’t have to pay for more than what you require.

Function-Based RPO

Function-based RPO is the staffing technique where the RPO provider is entrusted with the recruitment processes of a division or specific type of functions – data analytics, IT technical, scientific research, etc. It ensures that the division is properly managed and gets the talent it needs for various operations.

RPO Costs

1. Monthly Management Fee + Success Fee Pricing Model – Ideal For Enterprise RPO

In the monthly management fee with success fee Pricing Model, efforts to recruit are rewarded by a monthly management fee to the RPO agency. The RPO agency works to hire for a pre-agreed number of positions for the company. RPO charges are a combination of the monthly management fee you pay to the RPO agency based on the number of recruiters you need and the success fee you pay per successful hire.

2. Reduced Management And Success Fee Model – Ideal For Large-Volume Full RPO

In the Reduced Management and Success Fee Model, the overall recruitment process outsourcing fee structures or RPO charges are based on affordable rates to suit large volume recruitment needs. It includes a monthly fee along with the cost that’s fixed for each successful hiring that is completed. This RPO model is ideal for large volume recruitment needs, and the RPO costs are only a fraction of the benefits you get in terms of recruitment outcomes and staffing quality.

3. Cost Per Hire Pricing Model – Ideal For Project/On-Demand RPO

In the Cost per Hire Pricing model, you and the RPO agency come to a mutual agreement about the standard pay that will be paid to the RPO agency for each successful hire. The standard pay is usually a fixed percentage of the employee’s annual compensation.

This model is beneficial for both the agency and the company. External fluctuations like the change in industry rates or other factors do not influence the money you have to pay to the agency. Cost per Hire pricing model is ideal for Project-based RPO and On-demand RPO. It is always a fixed amount according to the agreement, and you’re only charged money after a successful hire.

4. Cost Per Slate Pricing Model – Ideal For Modular/Function-Based RPO

Cost Per Slate Pricing Model is the RPO model in which the RPO agency charges for the fixed number of candidates they source for the positions in the company. After the RPO agency carried out interviews and assessment tests, it put forward a list of suitable candidates for the job. The company is liable to pay fixed RPO charges based on the recruitment process outsourcing pricing fixed for a position. It makes the company’s work a lot easier and simpler.

The RPO Agency is required to meet an agreed number of candidates to hire and then charge the company. Internal recruiters take over the process from there. It’s well suited for all positions for which finding and attracting, and sourcing manpower is challenging.

5. Cost Per Transaction Model – Ideal For On-Demand/Modular RPO

In the Cost Per Transaction Model, the RPO charges are based on every transaction or service the agency is tasked with. It could be end-to-end recruitment for some positions or manpower sourcing activities for other positions. The RPO recruiters will be assigned specific tasks per recruitment operation, and RPO costs depend on the number of transactions done.

Cost Benefits And Savings From RPO

70%-90% Savings In-House Office Space, Infrastructure For Recruitment Teams

Hiring with an RPO agency is efficient and pocket-friendly. It reduces operational costs and more. You do not have to hire space, resources, and infrastructure to maintain a talent acquisition team, for which you need to keep hiring new members either for new roles or to replace existing ones. RPO allows you to have the services of virtual recruiters who work from anywhere and get you the talent you need by leveraging the RPO agency’s resources and infrastructure.

60%-80% Savings – Recruitment Resources, Technology, Man-Hours

RPO agencies are equipped to source the best candidates for you and provide you with a talented workforce. They’re updated with the latest technology in the market. You can save a lot of technology and training expenses spent on buying and maintaining recruitment technologies and training new talent acquisition executives.

Up to 70% Savings – Time Per Hire And Related Costs

A top RPO agency usually has 5x to 10x more talent resources and access than companies. They also have extensive experience in using the best Lean, SMART methods to quickly identify and place candidates. You can expect between a 50%-70% reduction in time to hire and related costs.

Cost Savings From Reduced Backfilling

When you are unable to retain new employees, you keep filling the same position again and again. Backfilling usually translates to higher salaries and recruitment expenses for the same position, increasing your recruitment costs. With the focused, outcome-oriented recruitment methods used by RPO recruiters, you can significantly reduce backfilling.

Cost Savings From Lean, Optimized Recruitment Practices

With an RPO agency, recruitment operations become fast, productive, and optimized. All unproductive and time-consuming processes are replaced by tech-enabled methods that can lead to the achievement of better outcomes in less time. So the cost in man-hours spent on all unproductive processes can be minimized and saved.

Conclusion

There are several models of RPO you can choose from. Each caters to the specific needs of the company. RPO models and RPO prices are available for every budget, depending on the company’s requirements. You can get access to a wide talent pool through RPO agencies and achieve different business goals through the right talent acquisition.

Effectively incorporating an RPO agency into your company’s hiring processes can earn the company significant savings. Understand your company’s needs and reach out to an RPO agency for effective recruitment solutions! The assistance of an RPO agency is the best solution for a company’s hiring needs. Your company’s multiple hiring needs can be efficiently tackled by an RPO agency.

Alliance Recruitment Agency-UAE

Alliance Recruitment Agency is a trusted RPO agency of hundreds of companies worldwide. We offer RPO services to companies across 50+ industry sectors in 30+ countries. The extensive, diverse, and global talent resources we have acquired help our clients find talent from anywhere in their country or from across the globe. We make RPO affordable, flexible, and totally customized to meet their specific needs. If you would like to know more about RPO costs and models, reach out to us. We also offer a free consultation.