RPO, Retained Search or Contingency?

Ere.net had a great article last week... Let's Revolutionize the Standard Recruiting Model. The author, Mark Bielecki, posed some interesting solutions to recruiting in a down turned economy. One possible solution was to have the client's pay the contingency recruiters a lesser fee for the qualified resumes that are submitted or interviews scheduled rather than a larger fee only when a candidate is hired. This solution would allow the recruiter to be compensated for their knowledge and efforts even if circumstances beyond their control prevent a hire from being made. What a concept... I like it!

Having come from a contingency agency background, working for RPO's the past few years has been an absolute breath of fresh air. While contingency searches bring in more money in fees, the percentage of hires per job order is much lower. After all, who hasn't had that contingency search where you worked for weeks to find that purple squirrel the client demanded only to have the hiring manager decide to put the position on hold during the offer stage or decide not to fill it at all?

Here at HumCap, we typically fill every RPO order we receive. Is that because the customer is paying for our services on a time and materials basis and they have more invested in the process? Working within this more consultative model, we are truly partners in the process and are better able to advise, counsel and educate the hiring managers to ensure the success of the hire. I can remember the last time I did contingency searches, coming up with a "contained search" model... part retained and part contingency. This was way before the RPO concept and required the client to pay a partial fee upon initiation of the search and the remainder of the fee when the hire was made. This win/win approach gave me as the recruiter an incentive to fill the position quickly and the client a vested interest in working with me to accomplish our goals.

I still prefer the true partnership of an RPO project or retained search and believe this is the future of the industry but I'm all about being creative and making money... what about you?

Comment by Barton Murray on April 28, 2008 at 1:36pm: Hi Leslie,
Thanks for your insight contingency vs. retainer it was eye opening. Although I have been doing this recruiting thing on my own for the last 12 yrs or so and consider myself up to date on most things, but evidently I must have been under a rock when the concept of RPO was discussed? At the expense of redundency and me looking like at idiot, can you explain what that concept means? I am looking for a new business model where I share risk with my clients a little more, or I should say they share it with me. Please replay when you can.
Thanks,
Bart
BMA Executive Search,Inc.

Comment by Chuck Harrison on April 29, 2008 at 9:43am: Leslie,

Right on! Ive been screaming this to anyone who would listen, and often those who wouldnt. RPO increases the stakes for both sides (recruiter and client) as once your engaged, the req is yours to fill no matter how quick or how long you own it. It also provides a real opportunity to educate the client on the marketplace and adjust accordingly.
Bart-my short education on it would be think "hired internal recruiter" An RPO consultant becomes the internal corporate recruiter for the client, be it for 1 search or for a couple years. Our agency has had both ends of the spectrum, but at the end of the day you become the hired internal recruiter for the client and are in charge of the req and process. Hope that helps.

Chuck

Comment by Leslie Mason on April 30, 2008 at 4:55pm: Bart,
RPO stands for Recruitment Process Outsourcing. This is where a company outsources all or part of the recuiting function to a third party on a project basis. It can be a simple as sourcing resumes for internal recruiters to completely driving the hiring process at the client site from the initiation of the job req. to the onboarding of new employees. There are several billing structures from an hourly time and materials to a specified length project which is billed yearly, quarterly or monthly. The beauty of RPO is that the client is a partner with the recruiter and has a vested interest in the success of the project. Thanks for the comment!
Leslie