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MSP and RPO

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There are two models for recruitment outsourcing: managed service programs (MSPs) and recruitment process outsourcing (RPOs). MSPs involve one company providing contingent labor through a network of recruitment firms, while RPOs involve a one-to-one relationship where the provider identifies and delivers talent directly to the client. RPOs are designed to mimic a company's internal recruitment process, while MSPs focus on managing contingent labor needs and costs through an external supplier network. Companies choose these options to benefit from reduced costs, flexibility, risk management, and access to large talent pools, while outsourcing recruitment functions and responsibilities. The recruitment outsourcing industry is growing, especially in Asia and Europe,

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Recruitment OutsourcingMSP and RPO
Recruitment Motto: Right people, right time, right placeRandell + Associates2
Recruitment OutsourcingTwo models exist in the market: MSP and RPOMSP-Managed Service ProgramsRPO-Recruitment Process OutsourcingRandell + Associates3
MSPRPOOne company provides labour to another company through a network of recruitment firms who source the talentOne to one relationship between the RPO provider who identifies talent and delivers it to the clientDifferences MSP and RPORandell + Associates4
RPO Delivery ModelRPO ProviderClient Company AContracts out Delivery of RecruitmentSources and supplies labourClient Company ARandell + Associates5
MSP Delivery ModelMSP ProviderClient Company AContracts out: Delivery of Recruitment
Management of Labour
Management of Cost of Labour ABCDEFGRecruitment Supplier NetworkClient Company ARandell + Associates6
MSPMSP is designed to find the contingent (hourly) labour most organizations need in some form or otherSelection of an MSP provider is normally done by the Procurement or Supply Chain departmentsManagement of the MSP vendor is done by the Procurement or Supply Chain departmentInput from HR (Recruitment) is often sought through both processesRandell + Associates7
MSPMSP vendors tend to be some of the largest staffing firms in the worldThey are paid by charging a management fee of x% to the client, which they pass on to the agencies who deliver the labourThe size of MSP’s vary but the largest MSP in the world is worth $B’s and the largest in the USA is over $1B annuallyCanadian MSP’s are much smaller, in the $10’sMAs a result, not many are operating here and it is not a true growth marketRandell + Associates8
MSP-How does it work?MSP team works with client managers to forecast labour needsPartners with agencies sending specs for jobsEnsures delivery of labour as needed and for agreed costRecruitment agencies are the employer and responsible for payroll, benefits, training and management of the employeeRandell + Associates9
RPORPO is designed to mimic the internal recruitment function and appear to candidates as the internal recruitment processIn an RPO model, recruitment is provided by third party recruitment agencies, off site or on siteRPO recruiters use internal emails, phone numbers and advertising materials, approved by the hiring organizationThe RPO provider appears as an extension of the HR department although they are not Randell + Associates10
RPORPO is often used for high volume recruitment (call centre staff) or project based roles (short to medium term) or to replace ALL internal recruitmentThe key difference with an MSP is that the roles recruited for in RPO are internal positions in the organizationRandell + Associates11
Why use RPO?Cost effective-the provider ramps up or down based on client needsNo need to hire/fire recruitersRPO has talent pools available (or should)Can find an RPO that focuses on your niche (Manufacturing, Banking, IT)Fees are usually based on placements made and the RPO provider guarantees or replaces staff, like any recruitment agencySaves space, hiring needs as all recruiters are external resourcesRandell + Associates12
Why use MSP?Cost Risk QualityControlRandell + Associates13
Why use MSP?CostContainmentThe management fee, typically 1-3% of total cost of recruitment, is less than paying to recruit each hireMSP’s take on all the risk and cost that come with employeesContingent needs fluctuate greatly and costs per hour/project need to be managed tightly, which MSP doesRisk Management MSP ensures contractors are compliant with organizational or regulatory requirementsand tracks that for the employerWorkers are not client’s employees, so there is no duty of care or other requirements of employersEmploying agency must have liability insurance, and other insurances such as worker’s compensation Randell + Associates14
Why use MSP?QualityMSP screens and provides only the top talent Recruitment agencies are not guaranteed a set number of placements or continued opportunities to make placements, creating healthy competitionControlSupplier networks are managed very closely for meeting pay requirements, and for employer obligationsRandell + Associates15
Why use MSP?Employing agency has full responsibility for managing the labour Labour can be removed at any time/flexibilityBest access to talent across regions/bordersMSP’s tend to be large global firms with large networks of agencies that specialize in core industries or geographiesMSP providers need to meet organizational /legislative requirements for diversity/representation/small business etc.Deep talent pools readily available through the supplier networksNumbers focussed and numbers drivenRandell + Associates16

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MSP and RPO

  • 2. Recruitment Motto: Right people, right time, right placeRandell + Associates2
  • 3. Recruitment OutsourcingTwo models exist in the market: MSP and RPOMSP-Managed Service ProgramsRPO-Recruitment Process OutsourcingRandell + Associates3
  • 4. MSPRPOOne company provides labour to another company through a network of recruitment firms who source the talentOne to one relationship between the RPO provider who identifies talent and delivers it to the clientDifferences MSP and RPORandell + Associates4
  • 5. RPO Delivery ModelRPO ProviderClient Company AContracts out Delivery of RecruitmentSources and supplies labourClient Company ARandell + Associates5
  • 6. MSP Delivery ModelMSP ProviderClient Company AContracts out: Delivery of Recruitment
  • 8. Management of Cost of Labour ABCDEFGRecruitment Supplier NetworkClient Company ARandell + Associates6
  • 9. MSPMSP is designed to find the contingent (hourly) labour most organizations need in some form or otherSelection of an MSP provider is normally done by the Procurement or Supply Chain departmentsManagement of the MSP vendor is done by the Procurement or Supply Chain departmentInput from HR (Recruitment) is often sought through both processesRandell + Associates7
  • 10. MSPMSP vendors tend to be some of the largest staffing firms in the worldThey are paid by charging a management fee of x% to the client, which they pass on to the agencies who deliver the labourThe size of MSP’s vary but the largest MSP in the world is worth $B’s and the largest in the USA is over $1B annuallyCanadian MSP’s are much smaller, in the $10’sMAs a result, not many are operating here and it is not a true growth marketRandell + Associates8
  • 11. MSP-How does it work?MSP team works with client managers to forecast labour needsPartners with agencies sending specs for jobsEnsures delivery of labour as needed and for agreed costRecruitment agencies are the employer and responsible for payroll, benefits, training and management of the employeeRandell + Associates9
  • 12. RPORPO is designed to mimic the internal recruitment function and appear to candidates as the internal recruitment processIn an RPO model, recruitment is provided by third party recruitment agencies, off site or on siteRPO recruiters use internal emails, phone numbers and advertising materials, approved by the hiring organizationThe RPO provider appears as an extension of the HR department although they are not Randell + Associates10
  • 13. RPORPO is often used for high volume recruitment (call centre staff) or project based roles (short to medium term) or to replace ALL internal recruitmentThe key difference with an MSP is that the roles recruited for in RPO are internal positions in the organizationRandell + Associates11
  • 14. Why use RPO?Cost effective-the provider ramps up or down based on client needsNo need to hire/fire recruitersRPO has talent pools available (or should)Can find an RPO that focuses on your niche (Manufacturing, Banking, IT)Fees are usually based on placements made and the RPO provider guarantees or replaces staff, like any recruitment agencySaves space, hiring needs as all recruiters are external resourcesRandell + Associates12
  • 15. Why use MSP?Cost Risk QualityControlRandell + Associates13
  • 16. Why use MSP?CostContainmentThe management fee, typically 1-3% of total cost of recruitment, is less than paying to recruit each hireMSP’s take on all the risk and cost that come with employeesContingent needs fluctuate greatly and costs per hour/project need to be managed tightly, which MSP doesRisk Management MSP ensures contractors are compliant with organizational or regulatory requirementsand tracks that for the employerWorkers are not client’s employees, so there is no duty of care or other requirements of employersEmploying agency must have liability insurance, and other insurances such as worker’s compensation Randell + Associates14
  • 17. Why use MSP?QualityMSP screens and provides only the top talent Recruitment agencies are not guaranteed a set number of placements or continued opportunities to make placements, creating healthy competitionControlSupplier networks are managed very closely for meeting pay requirements, and for employer obligationsRandell + Associates15
  • 18. Why use MSP?Employing agency has full responsibility for managing the labour Labour can be removed at any time/flexibilityBest access to talent across regions/bordersMSP’s tend to be large global firms with large networks of agencies that specialize in core industries or geographiesMSP providers need to meet organizational /legislative requirements for diversity/representation/small business etc.Deep talent pools readily available through the supplier networksNumbers focussed and numbers drivenRandell + Associates16
  • 19. Why use MSP?MSP’s are generally awarded 3 year contracts and provide quarterly updates on the program success They must compete for the opportunity each time and must demonstrate compliance with the program requirementsRandell + Associates17
  • 20. The future of Recruitment OutsourcingSignificant growth in APAC and EuropeConsolidation of MSP and RPO providers globallyLarger, more global deals than beforePrimarily USA or HQ driven with subsidiaries/countries followingReal benefit to organizations with either modelRandell + Associates18