Recruitment process outsourcing providers employ a variety of pricing models for their services, according to the “RPO Global Landscape Summary 2021” report from SIA.
The most utilized pricing model for RPO is a combination of fixed monthly and cost per hire, representing half of all reported contracts, according to SIA research. The model balances risk between provider and client, and protects the provider from volume fluctuations, enabling it to invest in the service. This will have been of particular value to providers as hiring volumes have reduced in certain sectors in response to Covid-19. The cost per hire is commonly split, for example 50% on requisition and 50% on hire.
Pricing per hire can be variable based on the source; volume hiring, for example will typically attract a lower, fixed cost per hire. A number of RPO providers are investing in automation for volume hires, making it more financially viable to charge project fees rather than transactional fees for volume hiring. Specialist professional hires, meanwhile, typically carry a greater cost per hire, reflecting the potentially higher level of sourcing and assessment and relationship management activity and investment required.
Internal referrals usually attract a lower fee for administering the recruitment process, unless a specific internal campaign is undertaken. The 2% of the market represented by ‘other’ pricing models includes alternative pricing combinations including a combination of FTE and cost per hire.