Understanding the Difference Between RPO Services and Staffing Agency

Hiring is a core business function that directly impacts the topline of every business. Recruitment process outsourcing (RPO) and staffing agency services are two hiring options that, despite being diametrically opposed, are frequently used in the same sentence. In this blog, we look at both the services and the differences between them.

Staffing agencies are firms that work on a reactive requirement model to fulfill the hiring needs of their clients. Their services are primarily those of a middle person and end after introducing the client to the candidate. These agencies are best for fulfilling the short-term hiring goals of a business.

Recruitment process outsourcing or RPO is a business function of delegating some or all the organisation’s recruitment process to another company. It aims to fulfil the long-term hiring goals of enterprises.

RPO Companies Are Specialists In Their Domain And Collaborate With Clients To Design Detailed Talent Acquisition Plans That Involve Various Functions Like Scouting, Interviewing, Onboarding, Induction Facilitation, And Strategisation.

Here are some fundamental differences between staffing and RPO services:

● Scope: Staffing agencies only play their part in the recruitment stage. On the other hand, an RPO firm provides comprehensive hiring solutions that involve hands-on assistance across the conventional and digital recruitment process.

● Focus on client policies: In staffing, there is minimal focus on adhering to company recruitment policies while referring candidates whereas RPOs immerse themselves in understanding the client’s policies before recommending potential hires.

● Process: RPO is a data-driven process that utilises the latest technology for scouting the relevant talent and meeting agreed-upon SLAs. In contrast, staffing is a rudimentary process that is not as formal and adept at meeting complex hiring needs.

● Cost efficiency: A staffing agency usually charges 25-30% of every recruited candidate’s compensation package. On the contrary, RPO companies operate under strict SLAs and charge a fixed sum making them a more cost-effective and productive method.

● Quality of hires: Staffing firms are only suitable for short-term hiring needs as the quality of hires cannot be guaranteed in such cases. RPOs focus more on sourcing quality candidates that possess adequate skills to meet the job role requirements for the long term.

● Approach: RPOs offer a more proactive approach to their clients in maintaining a healthy and productive workforce by providing regular inputs and consultations regarding industry trends and talent pool. Staffing agencies do not provide such comprehensive assistance and consider their main job done after the offer proposal stage

Successful RPOs believe in establishing strategic partnerships with their clients to deliver the best hiring experience by deploying upskilled teams that rely on authentic market data and smart recruitment tools to devise strategies and make effective decisions.

Both RPO & staffing can be effective for a company depending on their hiring requirements. If your company is looking to hire on an immediate basis for a short time, staffing firms might be a better fit for you. However, if your organisation has long-term requirements, RPO is the way to go.

We hope the insights shared above will help to find the right fit and fill your hiring and recruitment funnel with competent candidates.