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Differences Between Traditional Hiring And RPO

What Is The Role Of An RPO Company?

Recruitment Process Outsourcing or RPO is a term used for the process of outsourcing the recruitment process of a company to a third-party company. Such types of third-party companies are called RPO companies or RPO providers. These organizations take up all or a certain portion of an employer’s recruitment process and help companies reduce HR labor. They provide a dedicated team that focuses on saving costs on labor, improving employee retention and finding the right culture for each candidate.

An RPO company assumes ownership of the management and design of the whole recruitment process. They help companies create the right recruitment strategy and derive the best results. Some RPOs offer their process, while others follow the methodologies of the employers.

How Traditional Recruitment Agencies Work?

A traditional recruitment agency connects employers and employees. Instead of going through the elaborate process of advertising on job portals or conducting employee referral programs, businesses can hire agencies to help them connect to the right talent. The agency will then search for the right candidate that matches the job profile and source them. The agency is compensated when the company hires the talent picked by them.

While this sounds like a quick and efficient hiring process, it is not a perfect solution for retaining candidates for long. In this scenario, recruiting agencies compete against each other to find a candidate to fill the position quickly. In the process, the quality of the candidates takes a big hit. Hence, it is immensely important to choose the right talent. In addition, quality talent will reduce the burden of re-hiring as the candidate will stay longer in the company.

Also Read: How Does RPO Differ From MSP?

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Significant Differences Between RPO And Traditional Recruitment

Candidate Ownership

A recruiting agency owns the candidate you hire. It means that an employer cannot go back and hire the same candidate who was working with them without paying the recruiting agency. This stance will be an issue when the contract between the company and the agency expires. It complicates the hiring process to an extent.
RPO companies do not own the candidates hired by the company; whether they source the leads directly or indirectly. The process is much simpler when the company owns the employees.

Company Expense

The way a traditional recruiting agency bills a candidate is different from an RPO firm. An agency typically bills the employer 25% to 30% of the salary offered to the candidate. RPO firms take a different approach. RPOs handle all the recruitment tasks for the employers, and they are paid every month. The charge will include fees for the HR tasks and transactions when the company hires a talent. Comparatively, RPOs are cost-effective and work out 65% lower than the total fees charged by a recruiting agency.

Recruitment Strategy

Recruiting agencies mostly discourage employers from hiring through recruitment drive or referral programs as that may create a dent in their business. For recruiting agencies, the number of placements made by the employers through them defines their success. It is completely different with RPOs. RPO firms source candidates using different channels like referral programs, job portals, client websites, and references. They offer multiple avenues for hiring.

At Techfetch, one of the leading RPO companies, we ensure that each talent picked by us will be a great match for the job profile. We assist our clients in creating a quality talent pool. Contact us today to learn more about our services.

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