RPO, Recruitment Agency, Freelancer
Comparison of IT Recruitment Methods
Finding the candidate that fits the job description can be a real challenge, especially in the IT industry, where looking for a person with specific know-how is of great importance. Sometimes the variety of potential employees is extremely broad, or the other way around — the demand for the position is larger than the presence of candidates. All of a sudden, the recruitment process might turn into an ordeal and you end up being frustrated that the time goes by and the vacancy is still not filled. Does it sound familiar to you? If yes, then it’s worth reading this article, which compares the commonly known IT recruitment approaches and enables you to reflect on your own practice.
Recruitment Process Outsourcing (RPO)
Recruitment Process Outsourcing (RPO) is a workforce solution in which an organization transfers all or part of its permanent recruitment to an external provider. According to the Recruitment Process Outsourcing Association, an RPO provider can supply its own methodology and resources, or may assume them from the given company.
Operating either in partnership with your existing talent acquisition team or as an alternative resource, the RPO provider becomes an extension of the brand. In order for them to work effectively, they need to be deeply involved in your organization and understand aspects like the workplace culture, the company’s strategy and the characteristics of the industry.
The intention of the RPO is long-term cooperation between the supplier and the company using its services. RPO is an ideal solution, especially for:
1. Large companies and corporations.
2. Companies that enter the market and build new structures, e.g. shared service centers.
3. Companies that are dynamically developing or carrying out migrations of functions and processes.
Using RPO in the IT industry very often results in hiring the best talents. The time, energy and expertise in sourcing, screening and onboarding new permanent staff of the RPO providers enable you to maximize the quality of your hires while minimizing the resources needed to identify, attract and recruit them.
An RPO provider offers the experience and in-house expertise to fully optimize the candidate experience for a business. Not only does this increase the chances of attracting top talent, but also strengthens the employer brand strategy, thereby impacts a business’ ability to grow its market share within the industry.
The cost of RPO services will differ depending on the depth of their involvement and exactly how much you want them to take on, and for how long, but it is typically paid upfront. As RPO providers are most often measured on time-to-hire, cost-of-hire and quality-of-hire, their role is to ensure that permanent vacancies do not remain open for a long time.
According to data from Statista, the global RPO market is currently worth $21 billion, and by 2022 this number is expected to increase to $25 billion.
On the other hand, some companies might feel unsure about giving over the responsibility of the recruitment process. RPO requires detailed communication between the client and the provider to set expectations and foster success, it involves mutual trust and consistent dialogue. The average contract term for an RPO company and client is 3 years, which makes the relationship-building throughout the projects of great importance. Additionally, some companies might be afraid that well-fitted candidates will be overlooked by mistake or that an RPO provider will not fully understand role requirements and the organization’s culture. As Dalai Lama once said: “A lack of transparency results in distrust and a deep sense of insecurity.”.
A recruitment agency is an intermediary between a company that wants to hire someone and a job seeker who is looking for employment. Recruitment agencies can provide you with carefully assessed candidates as they have a large talent pool with already pre-screened and pre-referenced potential employees. As the recruitment process can be very time-consuming, the agencies screen the CVs and talk with the candidates who will make it through for your review. You won’t have to spend time attracting candidates and going through tons of profiles and applications to find a few qualified ones.
Moreover, the recruiters are often highly specialized and have in-depth knowledge of particular employment sectors. In the IT industry, recruitment agencies have a very important role, as their consultants need to carefully scan potential candidates based on the sought-after skills. This would not be possible without having expertise in this specific area.
For jobseekers recruitment agencies are there to enable them to achieve their career goals and land their ideal jobs. A mark of a good recruitment agency is its commitment to making sure that the candidates are achieving their goals, while fulfilling the tasks commissioned by the employer.
The methods of negotiating and charging fees differ between recruitment agencies and most often depend on the industry, the salary of the employee sought, and whether the vacancy is temporary or permanent. It is estimated that standard recruiting costs range from 15% to 20% of a candidate’s first annual salary, but this can go up to 30% for hard-to-fill positions.
Although the fee charged by a recruitment agency can sometimes seem expensive, the cost is a small compromise to find the right person who will fit perfectly into the organization or the specific project. Admittedly, agencies are often accused of being too sales-focused, as they require a constant stream of candidate placements in order to maintain their revenue and are very reactive to the jobs market.
Moreover, as it can be with RPO, there is a risk when hiring someone from the “outside” of the company. Cooperating with a recruitment agency will not give you full control of your employer brand, as the prospective candidates will create their first impression of your company based on secondhand information — not direct contact with your company. However, if you have good communication with the recruiter and give them all the necessary information this does not have to be an issue.
Another possibility of filling the job position is through working with a freelancer. This person is not part of an agency, but usually has already gained experience in the recruitment process and decides to operate as a sole proprietor. Said experience can be a great advantage, as the freelancer most likely has an expanded network of contacts and potential candidates, and big knowledge in the industry that they operate in.
Because freelancers often work individually, they have limited time to do business with numerous organizations at the same time; therefore, they can put more focus on building more personal relationships with their clients.
Additionally, the collaboration with a freelancer is usually less costly than through RPO and recruitment agencies, since they need to pay for the maintenance of additional employees (managers, accountants, cleaners), advertising, renting premises, taxes etc. Freelancers work for themselves and usually have lower remuneration expectations.
However, as the freelancer does the recruitment process on one’s own, they might not be able to find as many potential employees as RPO and recruitment agencies. Moreover, the fact that freelancers are not attached to anyone can sometimes mean they lack a formal structure. There may not be a contract between the two parties, the freelancer could disappear in the middle of their work, or your project might be leaked. There is such a risk, although this is not a problem if you hire reputable and reliable freelancers.
So, which method is the best one?
The recruitment method should be aligned with your needs, meaning that it should focus on the priorities and consider multiple factors, such as the time available for the recruitment, the budget that you operate with, the number of candidates that you’re searching for, and how long you would like the collaboration to last for. Based on this you can choose which option is the most suitable for you.