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Understanding Recruitment Process Outsourcing Fee Structures

Recruitment process outsourcing (RPO) can be a valuable tool for businesses looking to streamline recruitment processes. But, before you lock down an RPO provider, it's important to have a good understanding of recruitment process outsourcing pricing models and fee structures. 

The four most common models include cost per hire, management fee model, cost per slate, and cost per transaction. Each of these models has advantages and disadvantages that should be carefully considered before selecting an RPO firm. This article will explore each pricing structure to help you make an informed choice about which is best for your business. 

Recruitment Process Outsourcing Pricing Rates 

As you research RPO companies, one thing will is for sure: recruitment process outsourcing pricing rates vary widely. There is no one-size-fits-all fee structure in any industry, and the price range can vary widely depending on an organization's needs and the recruitment firm's expertise. Here are some of the most popular recruitment process outsourcing pricing models. 

Cost per Hire Model 

The cost-per-hire model is one of the most common RPO fee structures. Under this pricing model, the provider sets a fee for each candidate that completes the program and is hired. This fee can vary widely depending on the industry and size of the company. The cost-per-hire model may be a good fit for short-term project RPO  or specific positions if the goal is to fill the roles needed quickly. 

Management Fee Model 

The management fee model is similar to retainer agreements used by other types of professional services firms. The organization pays a monthly or annual management fee that covers all recruitment activities associated with hiring. This up-front fee is usually based on an estimated level of service, such as the number of hires or hours worked during a given period, plus additional costs, such as travel expenses. This model is ideally suited for companies that require continuous recruiting assistance over an extended period. 

Cost Per Slate Model 

Under the cost-per-slate pricing model, the RPO provider sets a fixed price for each pre-screened "slate" of qualified applicants submitted to the client. The slate varies in size depending on the recruitment needs and the industry. Once the slate is delivered, an organization can use its internal recruiters to interview and select the candidates they want to hire. This model is often used for point-of-service and short-term project recruitment needs. 

Cost Per Transaction Model  

Similar to the cost-per-hire structure, the RPO firm charges a fee for a specific service in a cost-per-transaction model. For example, additional services such as reference checks and drug screens may be charged per transaction. Also, organizations hiring for consulting RPO services may be charged at an hourly rate or per transaction for recruitment advice, market analysis, and recruitment process optimization. 

This pricing structure works well when companies need additional services beyond recruiting since they will only pay for what they use rather than paying a set fee for services they don't need. 

Final Thoughts on Recruitment Process Outsourcing Pricing 

When done right, recruitment process outsourcing can significantly enhance an organization's hiring success and give them a competitive edge. But, it's essential to consider the RPO pricing models and fee structures carefully and if they're a good fit for your organization. Each model can offer unique advantages depending on your business needs and recruitment goals. 

Hire Velocity understands these complexities and offers customized solutions tailored to your business needs. With our innovative sourcing and recruiting model, we develop a custom solution for your business, bringing added value, strategic advantage, and measurable benefits to your recruiting function. Our RPO solutions address your talent challenges with a broad range of flexible services – from targeted project solutions designed to achieve specific objectives to comprehensive enterprise solutions that encompass every aspect of the hiring process. 

Contact us today to learn more. 

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