How Can My Company Choose Between Different Types of Recruitment Services?

Last Updated on November 9, 2023 / Recruitment

If your organization is struggling to get candidates to apply or remain in your selection process, can’t seem to find the right person to fill a key role, or simply don’t have the bandwidth to fill the volume of open positions, it may be time to consider external recruitment solutions. There are many types of recruitment services that can often help you find and hire the right talent faster, improve your recruitment function’s effectiveness, and save you money in the process.

So, how do you get started and what should you look for?

Four Types of Recruitment Services

We’ll break down four different types of recruitment services to help you understand what they can do, their typical pricing/fee structure, and how to decide if it’s right for you.

1. Recruitment Process Outsourcing (RPO)

RPOs, also known as outsourced recruitment services, are described by the Recruitment Process Outsourcing Association as being similar to business process outsourcing, where “an employer transfers all or parts of its recruitment processes to an external service provider.” An RPO can manage some or all of your recruiting process while also offering options for establishing or improving your internal hiring function.

How do RPOs work?

Full-service RPOs act similar to an internal recruitment team as they work on your behalf representing your organization and employer branding. Many times, because they are a seamless extension of your company, candidates don’t know these recruiters aren’t on your staff unless it is shared.

These recruiting experts can tackle all aspects of your recruiting from initial scope to onboarding including:

• Creating compelling job ads and posting to their curated networks
• Screening resumes and sourcing candidates
• Conducting interviews, setting up interviews for your hiring managers, and gathering feedback
• Communicating with your decision makers and candidates – ensuring an excellent client and candidate experience throughout the process
• Conducting reference and background checks
• Extending offers and assisting with negotiations
• Arranging and leading onboarding

There is additional value as you leverage their candidate reach, discounted job ads packages (including social media), technology, and applicant tracking tools. Many outsourced recruitment services can use your applicant tracking tools, provide their own, or even help you establish new ones.

RPOs are often strategic consulting partners for your organization. In addition to supporting or managing your hiring process, they can address underlying issues with your recruitment strategy, refine your processes, and identify cost-saving opportunities.

This structure allows for an on-demand approach, as outsourced recruitment services can manage as much (or as little) of your recruitment as you prefer. Some companies choose to use an RPO to manage their entire recruiting function – eliminating the need for an in-house recruiting team. Others take an à la carte approach using outsourced recruitment services to support their biggest area of need, such as advertising or initial screening.

Ideal for:

• Organizations of any size that have limited, overburdened, or no dedicated staff for recruiting. They allow business owners and managers to focus on their business.
• If you don’t have the resources or your plate is too full, an RPO can keep your timeline moving with a minimal time commitment on your part.

Pricing/Fee Structure:

As you can imagine, not all RPOs are alike, and neither are their pricing structures. Some charge an hourly rate for time worked while others charge monthly, project-based, or cost-per-hire rates. So it’s important to do your homework!

For companies seeking recruiting support with the most flexibility and time and cost-savings, outsourced recruitment services that charge by the hour may be the best fit. That way, you’re only charged for their time working on your needs, and not charged when they’re not.

2. Interim/Temporary Staffing Agency:

This type of recruitment service is also a third-party entity that operates entirely independently of your company. Temporary agencies usually have a database and network of individuals who can quickly fill in for short-term needs. These candidates may be on the payroll for that staffing agency or simply be employed on contract as needed.

Ideal for:

• Quickly filling an interim position
• Bulk hiring for short-term projects or seasonal staffing needs

Pricing/Fee Structure:

Employers typically pay an hourly rate to the agency and the agency determines the temp’s pay rate.

Some agencies may also offer the contract-to-hire option, where you pay the hourly rate, but have an option to hire the temporary employee long-term. At that point, you often pay a conversion rate or a placement fee when you hire.

3. Retained Executive Search

These companies specialize in recruiting for senior and executive-level positions and tend to have an extensive network of qualified candidates. Executive search firms often take a deep dive into understanding the needs and expectations of the open role, in addition to their clients’ company branding, culture, vision, and mission. They use this information to identify ideal candidates more accurately.

Retained executive search firms often find and present a few top candidates after conducting thorough screening and interviews. They also help with ongoing communications with those candidates if you choose to interview them. The firm will also help negotiate and provide offer expectations for their candidate(s).

Ideal for:

• When your recruiting team doesn’t have the appropriate network or time to dedicate to this key position
• Guaranteeing you’ll get a hire for a hard-to-fill senior or executive level position.

Pricing/Fee Structure:

Many firms charge 30-40% of the position’s first year salary. Employers pay an upfront retainer fee and get a “guarantee” of a hire, often accompanied by a prorated rate refund or replacement if the hire leaves within a short period.

4. Contingency Recruiters

These recruiters set themselves apart as they are only paid if you hire their candidate(s). They recruit for entry- all the way through senior-level positions and work to develop a wide network of candidates for various roles in multiple industries.

To increase their chances of securing a hire (and getting paid!), they tend to recruit for multiple companies and may submit the same candidate to more than one company. Because of this, it is important that you act quickly if a candidate is a great fit so as not to lose them to a competitor.

When using this recruiting approach, you’ll want to understand what happens to your search if you opt for a contingent option while the firm’s other clients are using the retained search model. This can lengthen your time-to-hire.

Ideal for:

• Similar to a retained search, when your recruiting team doesn’t have the appropriate network or time to dedicate to the position
• In tight labor markets when you need to search your competitors’ rosters

Pricing/Fee Structure:

You pay only if you hire the candidate they present. Typical fees range from 25-35% of the new hire’s first-year pay.

How to choose the best recruiting service for you

No matter which of the types of recruitment services you choose to explore, we recommend that you:

• Check client and candidate references to understand their reputation with both groups.
• Ask how they find and recruit candidates. Do you still have to pay for job ads, professional membership fees, etc.?
• Learn about the process including if they utilize your ATS or their own.
• Understand the average or expected time to hire or similar analytics.
• Know your time/involvement needed upfront and on-going.
• Ask how they provide a positive candidate experience, as well as who/how they will handle all follow-ups.
• Do the math! Compare costs between your top options. You might be shocked at how much you can save.

Bottom line, any of these staffing options can offer support when you need it. The key is to find the best fit for your needs, as well as budgetary and time constraints.

Thank you to Andrea Whalen, Senior HR Business Strategist, and Melinda Canino, MS, Senior HR Communications Advisor, for contributing to this Emerging Issues in HR.

Do you need recruiting help? Our Outsourced Recruitment Services may be the perfect solution. We’ll manage the full process or support just where you need it for one or all of your positions. Plus, we now offer Executive Search solutions through Clark Schaefer Executive Search! Call Strategic HR today at (513) 697-9855 or email us for a free recruiting consultation. 

If you don’t have openings but still want to evaluate that your process is top-notch, it may be the ideal time to take our Free Recruitment Checkup.