Recruitment Process Outsourcing Pricing

Ani Gasparyan

Last updated on October 26, 2024 | 17 min read

OutsourcingRecruitment

Recruitment Process Outsourcing (RPO) is becoming popular for organizations seeking to enhance their hiring efficiency and cut personnel costs. By outsourcing some or all of their staffing functions to specialized providers, companies can optimize their hiring processes and benefit from the expert management of recruitment activities. RPO involves delegating job posting, candidate sourcing, interviewing, and onboarding responsibilities to an external partner. This strategy provides access to specialized expertise and offers scalable solutions that allow businesses to concentrate their internal resources on core operations.

Understanding the various pricing structures is crucial for businesses considering this approach. Our guide provides an overview of the models to help organizations determine if RPO is the right choice for their hiring needs.

What is RPO pricing?

When a company uses RPO, it pays a specialized provider to handle some or all aspects of the hiring process. This can include sourcing candidates, screening resumes, conducting interviews, and managing the entire recruitment process.
The pricing varies widely based on the specific cost models used and the details of the RPO contract. Each model offers different ways of managing hiring costs, depending on your organization’s needs, and is influenced by factors such as the scope of services and the number of employees to be hired. Pricing models can include options like a fixed fee per successful hire, a regular management fee, or charges based on the number of candidates presented. Let’s look at different RPO pricing frameworks to help you understand how they work and how they might fit your organization’s needs.

RPO pricing models

1.Cost-per-hire model

The cost-per-hire model charges a fixed fee for each successful hire, usually calculated as a percentage of the new employee’s annual salary. For example, if the agreed payment is 10% and the new hire’s salary is $20000, the cost would be $2000. This model mainly benefits companies with high-volume recruitment needs or those looking for a straightforward pricing structure. It ensures you only pay for hires that are successfully made, making it suitable for short-term resourcing projects or when hiring many positions at once.

Pros	Cons
You only pay when a candidate is hired, which means costs are tied to successful outcomes.	The cost-per-hire might be higher than other models for specialized roles.
It is best for temporary or project-based hiring where you need clarification on the volume.	The provider might need more motivation to fill positions quickly than with performance-based models.

2.Management fee model

In the management fee model, companies typically pay a monthly recurring fee for the RPO provider to manage the entire recruitment process. This fee covers all talent acquisition activities and provides continuous hiring and employee retention support. This model is ideal for organizations with consistent or long-term hiring needs, as it offers predictable costs and comprehensive management of personnel selection. However, it may not be as flexible for companies with fluctuating or short-term hiring requirements, as the regular fee continues regardless of the actual volume of recruitment.

Pros	Cons
Regular monthly fees make it easy to predict and manage talent acquisition expenses.	You pay the same amount each month, which might not be cost-effective if you hire rarely.
This model often includes additional services like improving employee retention and recruitment processes.	The provider might need more motivation to fill positions quickly than with performance-based models.

3.Management fee and cost-per-hire model

The management fee and cost-per-hire model combines a regular management fee with a fee per successful hire. Companies pay a monthly management fee for overall recruitment strategy and support, plus an additional cost for each hire. This hybrid model provides a balance between comprehensive service and precise cost-per-hire, making it well-suited for large organizations that require ongoing workforce support and a focus on employee retention.

Pros	Cons
It covers ongoing recruitment management while paying for successful hires.	Managing two types of fees can complicate budgeting and invoicing.
This model combines a monthly fee with a cost-per-hire, offering stability and performance-based pricing.	The combination of fees might be higher than other models, particularly for companies with occasional hiring.

4.Cost-per-slate model

The cost-per-slate model involves paying for a predefined “slate” of candidates for each position. This model guarantees a set number of candidates to choose from, which can enhance the quality of your hiring process by offering various options. It helps control costs by charging a set fee for a group of candidates, which makes it easier to plan and budget your recruitment expenses. However, if the candidates in the slate do not meet your needs, the cost may not be justified, as you pay for the slate regardless of whether any candidates are hired.

Pros	Cons
You pay a fixed amount for a set number of candidates, making budgeting easier.	If the slate doesn’t provide the right candidates, you may need to pay for more slates.
You review several candidates and choose the best fit for your needs.	This may not be ideal for highly demanding hiring needs.

5.Cost-per-transaction model

The cost-per-transaction model charges fees for specific recruitment activities, such as candidate sourcing, screening, or interviewing. This approach provides detailed control over hiring costs, allowing you to pay only for the services you use. It is beneficial for organizations that need customized staffing solutions and wish to manage expenses more precisely. However, this model can be complex to manage, as tracking and accounting for each transaction can take time and effort. Additionally, if multiple services are required, the cost may be higher than in other pricing models. Thus, the cost-per-transaction model is best suited for short-term hiring projects.

Pros	Cons
This model charges are based on individual hiring tasks, so you only pay for the services you need.	Costs can add up quickly if many transactions are needed.
It is useful if you only need help with particular parts of the recruitment process, like candidate sourcing or screening.	This model might offer a partial personnel solution, leading to potential gaps.

RPO pricing compared to in-house recruitment costs

When comparing RPO pricing with in-house staffing costs, it’s important to note the key differences between these approaches. In-house hiring requires managing the process internally. This includes the costs of hiring and training internal recruiters, investing in sourcing tools and technology, and covering the expenses related to job advertising and candidate outreach. While this approach allows for greater control and direct oversight of the hiring process, it can also lead to higher fixed costs and variable expenses that fluctuate based on hiring needs and employee turnover.

RPO pricing, on the other hand, involves outsourcing the recruitment process to a specialized provider. RPO services can be tailored to your specific needs and often include a range of pricing models such as cost-per-hire, management fees, and cost-per-slate. This flexibility can lead to more predictable and potentially lower costs, especially for companies with changing hiring needs or high-volume recruitment requirements. RPO providers typically offer expertise and technology that might be costly for an organization to maintain in-house.

Therefore, while internal staffing provides control and integration within your organization, it may involve higher and less predictable costs. Let’s take a closer look at the key differences between RPO pricing and internal hiring costs in the table below.

About DevsData LLC

DevsData LLC is a leading IT recruitment and software development agency with over 8 years of experience in the field. They are a reliable RPO provider known for their careful and effective approach to meeting the complex needs of the tech industry. With a team of experts from Europe and the US, including over 40 senior technical recruiters, DevsData LLC quickly finds top talent, often within 10 days. Their extensive database of over 65000 pre-screened professionals helps them connect the right people with top tech companies efficiently.

The agency works with various clients, including hedge funds, multinational corporations, and prominent startups, including those from the US and Israel. Notable clients like Cubus, Skycatch, Varner, and Novartis highlight their ability to serve various industries. DevsData LLC has a 5/5 client satisfaction rating on Clutch and GoodFirms, reflecting their strong client-candidate relationships. They operate with a government-approved recruitment license and use a thorough interview process, including 90-minute interview sessions and problem-solving tasks. This detailed approach ensures they provide high-quality candidates, making them a reliable and effective RPO partner.

Conclusion

Selecting the right RPO pricing model is crucial for optimizing your recruitment strategy and managing costs effectively. Each pricing model offers unique advantages tailored to hiring needs and budget constraints.

DevsData LLC exemplifies the benefits of a well-executed RPO strategy with their comprehensive and adaptable services. Operating globally with offices in Europe, Asia, North America, Latin America, and Australia, they excel in sourcing top talent quickly through their extensive database and rigorous selection process. Their proven success and commitment to client satisfaction make them a strong partner for developing effective RPO solutions that meet specific hiring needs and recruitment goals.

Beyond RPO, DevsData LLC provides employer of record (EoR) and business process outsourcing (BPO) services. Their EoR services simplify employment tasks like payroll, benefits, and legal compliance, allowing companies to focus on core business operations. Their BPO services support various business functions, including customer support and data management, enhancing overall operational efficiency. This wide range of services makes DevsData LLC a dependable partner well-suited to address diverse business needs beyond recruitment.

For more information or to discuss your recruitment needs, contact DevsData LLC at general@devsdata.com or or visit their website att www.devsdata.com.

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Ani Gasparyan Senior copywriter and marketer

Ani is a marketing enthusiast and content writer. With 5+ years of expertise in marketing, she succeeded in developing engaging marketing collaterals, including blog articles, social media content, and other promotional materials. With a keen eye for detail and a knack for storytelling, she thrives in crafting compelling content that resonates with the target audience.

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