RPO vs. Contingent Recruitment: Which One Should You Choose For Your Business?

If you’re weighing up RPO vs. contingent recruitment, this is your comprehensive guide to these two distinct hiring strategies.

Recruitment process outsourcing (RPO) provides a comprehensive solution that oversees the entire hiring process, tailored to your long-term talent acquisition strategy. On the flip side, contingent recruitment operates on a pay-per-hire model, offering flexibility and quick responses, ideal for immediate or short-term staffing needs.

We’ll help you understand these recruitment models so you can identify the one that best suits your hiring goals.

What Are Recruitment Process Outsourcing (RPO) and Contingent Recruitment?

Recruitment process outsourcing (RPO) and contingent recruitment are two models for outsourcing recruitment. 

Recruitment process outsourcing (RPO)

RPO is a comprehensive solution that manages your entire hiring process. Think of it as a holistic approach to talent acquisition. It’s tailored to suit your long-term talent acquisition needs, providing you with a strategic approach to recruitment. RPO is like having an in-house recruitment team working closely with your organization to understand and fulfill your hiring requirements.

An RPO provider essentially works as an extension of your HR department, taking on the responsibility of managing the recruitment process, from job profiling all the way through onboarding. They bring in-depth knowledge and expertise in the recruitment field, helping you to attract and retain the best talent in the market. They also use advanced recruitment technologies and methodologies to streamline and improve the hiring process, ensuring you get the right people for the right roles.

Moreover, RPO providers work closely with your organization to understand your culture, values, and goals. This deep understanding allows them to align the recruitment strategy with your business objectives, ensuring that the talent you hire not only has the necessary skills and experience but also fits well within your organization.

In essence, RPO is a strategic partnership that enables you to focus on your core business activities while ensuring your hiring needs are met effectively and efficiently.

Contingent recruitment

Contingent recruitment operates on a pay-per-hire model. It offers you flexibility and quick responses, making it ideal for immediate or short-term staffing needs. With this model, you engage with recruitment agencies that source and present candidates to you, leaving the rest of the recruitment process to be managed internally.

It’s a model that thrives on its adaptability—it’s like having a recruitment agency on speed dial, ready to spring into action when you need to fill a role quickly. It’s particularly useful for organizations that experience fluctuating hiring needs, such as seasonal industries or companies undergoing rapid expansion.

The pay-per-hire model means you only pay the recruitment agency when they successfully fill a position, minimizing your financial risk. This model also allows you to maintain control over the final decision on who gets hired, ensuring you have the final say on the perfect candidate for your company.

It’s a great option if you’re looking to manage your budget effectively while still gaining access to a diverse pool of potential hires. The contingent recruitment agency does the heavy lifting of sourcing and screening the candidates, but the power to make the final hiring decision remains in your hands. This way, you can ensure that the new hire is not only qualified but also aligns with your company culture and values. As such, the pay-per-hire model is a practical and cost-effective solution for businesses that need to fill positions quickly without compromising on the quality of candidates.

The Benefits of RPO and Contingent Recruitment

Each of these recruitment methods has advantages for different hiring scenarios, and which one is best largely depends on your specific hiring needs.

Benefits of RPO

Particularly for organizations with ongoing hiring needs, RPO brings a wealth of benefits, including:

• Strategic hiring: With RPO, you’re not just filling vacancies; you’re implementing a strategic hiring process. The RPO provider will work closely with you to understand your business goals and align them with your recruitment strategy.
• Cost and time efficiency: RPO providers leverage their expertise and resources to streamline your hiring process, significantly reducing time to fill and cost per hire.
• Quality of talent: RPO providers have access to extensive talent pools and advanced recruitment technologies, ensuring you attract and retain top-tier candidates.
• Scalability: Whether you’re expanding or downsizing, RPO services can easily adjust to your changing recruitment needs.
• Enhanced employer branding: RPO providers can help improve your employer brand, making your company more attractive to potential candidates. They can assist in promoting your company culture, values, and benefits to attract the right talent.
• Compliance and risk management: RPO providers ensure that your company stays compliant with all employment laws and regulations, reducing the risk of legal issues related to recruitment and hiring.

Overall, RPO is usually an excellent, cost-effective solution for organizations with continuous hiring needs.

Benefits of contingent recruitment

Contingent recruitment offers advantages that can be particularly beneficial for businesses with immediate hiring needs. Here are some key benefits of working with a contingent recruitment agency:

• No success, no fee: One of the main benefits of contingent recruitment is the “no success, no fee” model. This means you only pay the recruitment agency when they successfully place a candidate in your company. This reduces the financial risk for your business and ensures that you only pay for successful results.
• Speed and flexibility: Contingent recruitment agencies are known for their speed and flexibility. They can quickly provide you with a list of potential candidates, making it an ideal solution for companies needing to fill a vacancy urgently or with fluctuating hiring needs.
• Access to a wide talent pool: Contingent recruiters often have access to a large pool of candidates, including passive candidates who are not actively looking for a new job but may be open to the right opportunity. This means you can reach a wider range of potential hires than you might be able to on your own.
• Industry expertise: Many contingent recruiters specialize in specific industries or roles. This means they have a deep understanding of the skills and experience required for these positions, as well as access to a network of potential candidates within these fields.
• Reduced workload: Working with a contingent recruitment agency can significantly reduce the workload of your HR team. The agency will handle the initial stages of the recruiting process, including sourcing and screening candidates, leaving your team to focus on other important tasks.
• Cost-effective: Contingent recruitment can be a cost-effective solution, especially for smaller businesses or those with sporadic hiring needs. It allows you to access professional recruitment services without the ongoing costs of maintaining an in-house recruitment team.

In summary, contingent recruitment can be a practical and efficient solution for businesses that need to fill positions quickly and effectively without the financial commitment of other recruitment models.

Comparing RPO and Contingent Recruitment: Key Differences

Understanding the key differences between RPO and contingent recruitment is vital for choosing the most suitable approach for your organization. The main distinction lies in their level of involvement in the hiring process and cost structure.

Level of involvement in the hiring process

With RPO, you’re entering into a long-term partnership that focuses on strategic talent acquisition. The RPO provider becomes an integral part of your team, acting as an in-house recruitment department. They get to know your company inside-out, allowing them to manage your hiring requirements effectively.

The RPO process starts with a deep understanding of your hiring needs, followed by job profiling, candidate sourcing, screening, interviewing, and finally, onboarding. Throughout this process, the RPO provider stays closely aligned with your brand and company culture, ensuring the candidates not only fit the job profile but also blend well with the organizational environment.

In contrast, the contingent recruitment model is more transactional and immediate. Here, you’re engaging with recruitment agencies that present qualified candidates for your open positions. The process is straightforward and quick. The agency sources potential candidates, screens them for basic fit, and presents them to you. The rest of the hiring process, including interviewing, selection, and onboarding, is typically handled internally within your company.

Cost structure

Significant differences also exist in the cost structures of RPO and Contingent Recruitment. RPO typically presents a more predictable cost structure, with fixed monthly fees and a cost per hire. This allows you to forecast spending and plan budgets effectively.

On the other hand, Contingent Recruitment operates on a “no placement, no fee” basis. This approach offers a degree of financial risk mitigation, as payment is due only upon the successful placement of a candidate.

Factors To Consider When Choosing Between RPO and Contingent Recruitment

Several key factors should be considered when deciding between RPO and contingent recruiting, including the size of your company, the volume of hiring, and workforce planning requirements.

Each of these factors can significantly influence the effectiveness of either recruitment method. 

Company size

Your company’s size significantly influences your choice between RPO and contingent recruitment. If you’re a larger organization with continuous, large-scale hiring needs, you’ll likely benefit more from RPO.

RPO delivers benefits such as reduced time to fill positions and improved quality of hires, making it an effective strategy for organizations with a substantial workforce and ongoing recruitment needs.

On the other hand, if you’re a smaller company or your hiring needs are sporadic and short-term, you might find contingent recruitment more suitable. 

Hiring volume

The volume of your hiring needs plays a key role when picking the right recruitment strategy. If your company is expanding rapidly or frequently has a high number of open positions, RPO might be your go-to. Why? Because RPO is like having an extra set of hands that takes care of the whole recruitment process, from start to finish. It’s a comprehensive solution that can efficiently manage high-volume recruiting, reducing costs and risks along the way.

On the flip side, If your company has fewer hiring needs or needs to fill positions quickly, contingent recruitment could be the better choice. This method connects you directly to recruitment agencies or contract recruiters who can promptly find the right candidates, especially for lower to mid-level roles.

This flexible approach gives you access to a larger talent pool and allows you to benefit from the knowledge of external professionals, often resulting in cost savings for hiring managers.

Workforce planning needs

Your company’s workforce planning requirements can also sway your choice between RPO and contingent recruitment. If your organization has complex workforce planning needs, such as strategic growth plans, large-scale hiring, or the need for a diverse talent pool, you may benefit from the strategic and comprehensive approach of RPO.

However, if your organization has simpler hiring requirements, you might find contingent recruitment to be more suitable. This model is particularly beneficial for businesses that don’t have a consistent hiring demand or require flexibility. 

Contingent recruitment allows you to engage with recruitment agencies as and when needed, without any long-term commitment. It’s an ideal solution if you have immediate hiring needs, such as a sudden project that requires specific expertise, or if you’re in a seasonal industry with fluctuating staffing requirements.

Final Thoughts

Both RPO and contingent recruitment offer unique advantages in talent acquisition. RPO provides a strategic, long-term approach, offering end-to-end recruitment solutions ideal for organizations with continuous hiring needs. Conversely, contingent recruitment offers a more transactional, immediate approach to hiring, making it an excellent choice for organizations with immediate or short-term hiring needs.

The choice between these two methods ultimately depends on your organization’s specific needs, including company size, hiring volume, and workforce planning requirements.

Are you ready to streamline your recruitment process? Whether you’re considering RPO or contingent recruitment, Near is here to help. 

We specialize in connecting you with top talent from Latin America, saving you 30–70% of your typical hiring costs—and we can do it in under 21 days.

Don’t let the complexities of recruitment strategies overwhelm you. Book a free consultation call with us today, and let’s explore how we can tailor an approach that fits your specific needs.

Frequently Asked Questions

How do RPO and contingent recruitment differ in terms of cost structure?

RPO has a more predictable cost structure with fixed fees, allowing organizations to forecast their spending. On the other hand, contingent recruitment operates on a “no placement, no fee” basis, which can be less predictable.

What is a contingent RPO solution?

A contingent RPO solution combines the flexibility of contingent recruitment with the strategic approach of RPO, managing the entire recruitment process beyond just sourcing and placement of candidates.

What other recruitment models should I consider?

Consider in-house recruiting for full control, on-demand recruiting for flexibility with sudden hiring needs, and staffing agencies for quick, temporary hires. Each method has pros and cons, and the best choice depends on your specific needs. For a deeper understanding, we have articles comparing RPO with each of these methods.

Is RPO or contingent recruitment better for enhancing the candidate experience?

Both RPO and contingent recruitment can enhance the candidate experience, but in different ways. RPO, with its strategic and comprehensive approach, ensures that the entire recruitment process is seamless and efficient, providing a positive experience for candidates. It also focuses on aligning the recruitment strategy with the company’s culture and values, which can lead to a better fit and happier candidates.

On the other hand, contingent recruitment, with its fast and flexible model, can quickly connect candidates with potential job opportunities, reducing the waiting time and uncertainty that can often frustrate job seekers.