The Difference Between a Contingent Staffing Agency and an RPO

Is your company considering the option to outsource some of their recruiting needs? Are you a job seeker that has been contacted by a third party recruiter and don’t know who you’d actually be an employee of? Are you confused about the difference between contingency staffing and retained recruiters/recruitment process outsourcing (RPO)? If so, you’ve come to the right place. I’ve worked in recruitment roles for both contingency staffing and RPO throughout my talent acquisition career. One of the common issues I’ve seen in regard to this is the fact that companies or candidates are not educated about the difference between the two. So, let me try to shed some light today.

Contingency agencies, also known as staffing agencies or temporary placement agencies, are typically used when a company has a job opening that needs to be filled quickly. In some instances, it is used for a one-off situation or for a position that has a low volume of needs but are hard to fill. In other instances, they are used because the client has a huge number of positions to fill and their needs needed to be filled, like, yesterday. Contingency agencies are usually very fast paced because they’re not only in competition with the internal HR/recruitment department at the client’s organization, but they’re also in competition with other recruiting firms that are trying to get their candidates to the client first. The reason for this rapidness and pressure?: these agencies only can charge a fee if the client decides to bring their candidate on-board.

Retained recruiters or RPOs usually have an exclusive contract with their client and the client typically pays an upfront fee (whether a candidate is hired or not). The retained/RPO recruiters and clients formulate a plan about what type of candidates they need, how to go about finding the candidates, and determine what candidates fit the profile. It can be considered a strategic partnership. Very often, the retained recruiters present several qualified candidates to the client on a continuous basis to help build a pipeline and also increase their interview flow. These types of companies are typically utilized by larger companies with many positions to fill or by companies that have a specific need that is hard to find.

Personally, I love working for an RPO. Although we still have goals to meet on a weekly basis, there isn’t as much pressure as there was at a contingency firm. Additionally, I feel like I’m able to provide better service to both my clients and my candidates because of the relationship I build with the recruiting department at the client. I understand the company better and I know what their needs are. I’m able to relay information to the candidates to help them get a better understanding of whether or not this is a job or company that fits with what they’re looking for. Additionally, I can take the time to find better candidates for my clients because I don’t have to worry about beating out other agencies. But, of course, that’s just my personal preference. Both are extremely good options depending on what your company needs are.

For more information, feel free to read this article on UnderCover Recruiter.

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Changes in the Workforce: Are Employer Relationships Over?

I remember when I was in high school, my parents stressed to me the importance of getting good grades, a good degree in college, so I could land a great job that would be my lifetime employer. After all, my father had been with the same employer since he was 25 and my mother had also been with the same employer for 15 years at that point. A few years after that conversation, the economy took a downturn and “employers of a lifetime” seemed like a distant memory for those entering the workforce. Sadly, it began to be a distant memory for those IN the workforce, as well.

As the years went on, full time employment became rarer and it wasn’t uncommon for people to be in and out of employers within a couple years. Employers started to focus more on utilizing temporary workers, freelancers, and contract workers for their business needs. And with this meant that the normal relationship, fidelity, and loyalty between employer and employee had weakened or completely vanished.

But with this unsteady, ever-changing workforce, do the benefits of “long term” employment have to end? Do employees have to go without benefits, training, and skill building? Do employers have to deal with talent that might not be the best fit yet because of lack of ramp up time? I don’t think so. I think that each party needs to take that extra step to bring back some of the qualities that the “good ol’ days” had and make it work in this situation.

As an employer, you need to take the time to make sure your “temporary” workers feel welcomed, appreciated, and have a place within your organization. Nothing is worse than working for a company temporarily and feeling like the outcast or feeling like your presence really makes no difference. Take the time to train them a bit and learn what skills the worker already has to offer, and try to utilize them. This can not only benefit your company but it can help you get more accomplished and can make the temporary employee feel like they have a purpose rather than just be involved in mind-numbing process.

As an employee, take the time to build relationships with those in your organization. Learn about the industry, network, try to understand processes better. Take any chance you can to build knowledge and skills and put them into practice.  Don’t be shy and wait for someone else to show you- take initiative! If you’re working for a staffing agency, find out what kind of benefits and training they offer. Many organizations now offer medical benefits and workshops to help their contractors feel taken care of and keep their skills up to date so they’re a stronger candidate in the future.

Maybe things have changed, but it doesn’t have to feel like a revolving door with nothing to show. We all can take our part to make the best of this new world of work. It’s time to start thinking it as a way to build opportunity.

If you enjoy topics like this, be sure to join #Tchat on Twitter- Wednesdays at 7pm EST. Also, please feel free to join the “Talent Culture” group on Linkedin

More links:

Is the Employment Romance Really Over?

TChat Recap

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