Talent Acquisition RPO Contracts
Tug-Of-War: Remote vs. On-Site
The Talent Acquisition industry’s external resource alignment is shifting from contingent and retained search resources to Recruitment Process Outsourcing (RPO) business partnerships.
An RPO level agreement for staff augmentation is designed to minimize external resource costs for recruitment, sourcing, and other talent related services including contingent workforce hiring. An RPO staff augmentation company is an extension of a client’s internal Talent Acquisition organization.
RPO level talent support organizations (large or small) provide multi-level talent hiring and contract work-force services at varying levels. Cost differences are significant, a key benefit to utilizing the talent industry’s advanced service offering. RPO level hourly contract rates are a minimal budget expense compared to contingency or retained search percentage rates of 20% -35% per placement.
The Transition to RPO Recruiting Services
Both contingency and retained search firms are still viable resources for talent hiring support but are less popular then they once were since the talent industry on the whole utilizes many of the same shared industry resources (i.e. LinkedIn, HireEZ, SeekOut, Indeed.com) for client talent hiring support.
Both retained search firms and contingency agencies were heavily utilized in the past due to their extensive talent databases. Starting in the early 2000s the industry starting using mutual tools for identifying talent (i.e. LinkedIn and job boards) in order to help clients identify and hire candidates faster for open positions.
Placement fees for retained search firms run around 35% of a hired candidate’s base salary plus annual bonus. Contingency recruiting agencies charge 20%-25% on average for placement fees.
A retained search firm generally does not guarantee a placement. They guarantee the search. A typical retained search may include hiring candidates the company has received internally as referrals, or through other sources.
Contingency firms invoice clients 20%-25% fees once a candidate placement is made. No retainers. The contingency agencies must place a candidate to invoice their fee.
For companies with high levels of annual hiring, costs for recruitment and hiring can exceed millions of dollars for companies using retained search firms and contingency agencies.
90 Days or 3 Years = Big Difference
Big name corporations like IBM, Korn Ferry, Alexander Mann Solutions, and Randstad are competing for the RPO client business, as well as smaller boutique companies like Top Source Talent based in Phoenix AZ, and dozens of off-shore companies.
Over the last 8-10 years Top Source Talent and other smaller boutique RPO staff augmentation companies have been gaining on big name competitors due to the contract requirements with their clients. The big name corporations are obligating their clients to three year contracts plus requisition fees, whether the clients need their services or not.
Top Source Talent is providing higher quality services to clients and their contract commitments extend to 90 days only. The higher quality services with shorter contracts are winning business.
Flexibility and scalability is a methodical value proposition that we offer when working with clients to solve their hiring needs. With a 90 day vs. 3 year agreement, being smaller and more agile, we provide clients with targeted staff with a shorter ramp up / ramp down period. This level of scalability is a key benefit to any company that needs to increase staff.
Boutique RPO staff augmentation companies have more flexibility to leverage their services based on client needs and demands. Some clients may need recruitment and sourcing services only. Other clients may need talent marketing and branding. Some companies may seek services for contract work-force staffing.
Top Source Talent is able to flex with ease and swiftness as client service requests increase and decrease, based on internal hiring demands. The large RPO competitors generally operate with multi-layered processes and more complex client contract commitments, which prevent them from shifting and scaling quickly as their clients need service adjustments.
We Can Deliver on Promises
Top Source Talent hires and contracts Talent Acquisition, HR, and experienced staff with the specific industry skills and expertise for the clients they support. We have experience in working in a multitude of industries and delivering for our clients. Matching the correct talent to a client project is a principal objective for successful client relationships.
Larger RPO companies often need to focus on cost savings for client resources since their operating costs are significantly higher than the operating expenses for smaller boutique firms. Many larger RPO firms rely on off-shore call centers to support client projects.
Aligning time zones and creating advanced communication practices between clients and internal resource teams are an emphasis for smaller companies like Top Source Talent. Boutique firms are generally more successful at delivering on client promises for placing highly qualified, tenured employees and contractors.