MSP Recruitment vs. RPO: Five Key Differences

Demographic shifts and newer models of talent acquisition post-pandemic have transformed the global workforce profile creating significant differences between MSP recruitment services and recruitment process outsourcing services. Organizations are using innovative ways to attract, hire and retain talent leading to a difference in the approach to using MSP staffing services and RPO services to leverage a flexible workforce and manage full-time employees. This article will discuss the key differences between MSP recruitment and RPO service providers to help organizations enhance their hiring efficiency and improve permanent and temporary workforce management.

What is MSP Recruitment Service?

A Managed Service Provider (MSP) provides a contingent or temporary workforce and takes care of their end-to-end recruitment process. The flexible or temporary workforce includes consultants, contractors, temp staff, Statement of Works (SoW), freelancers, and other non-permanent staff working for an organization. MSP staffing companies act as a liaison and supply chain managers between the clients and staffing agencies providing candidates. MSP staffing takes care of the entire management of the contingent workforce to ensure process efficiency, cost optimization, and compliance. While workers under the MSP recruitment process are supplied by different staffing agencies, they all go through the MSP, which acts as the liaison between them.

An MSP is viewed as a liaison between vendors and a client.

What is Recruitment Process Outsourcing (RPO)?

Recruitment process outsourcing means transferring all or a part of the recruitment process to external providers or RPO companies. RPO service providers take care of different aspects of the end-to-end recruiting process, such as candidate sourcing, screening, selection or interview process, onboarding, or the full cycle recruiting process. RPO companies provide outsourcing services from offshore, nearshore, or onshore delivery centers helping businesses or staffing agencies hire dedicated recruiters to meet their hiring requirements.

There are many kinds of RPO models, such as project-based RPO, cost-based RPO, and many other models based on requirements and cost. The greatest advantage of recruitment process outsourcing services is scalability and cost-savings. RPO providers independently source candidates to fill vacancies for the end clients and rely on their network of candidates and talent pipeline to find suitable candidates. Therefore, RPO services enable direct communication.

Five Differences Between MSP and RPO

S.No.	Feature	MSP	RPO
1.	Requirement	MSPs help to fill flexible workforce requirements and cater to large-volume hiring needs.	RPOs work with HR teams and staffing companies to provide end-to-end recruiting services. RPOs cater to all types of hiring needs, from high volume demands to project-based offering scalable staffing solutions. RPOs can supply permanent and temporary workforce needs.
2.	Source	MSPs use a vendor management system (VMS) to source temporary workforce for clients. MSPs work in conjunction with third parties and reach out to staffing agencies to source candidates.	RPO service providers use their own candidate database to source candidates directly. RPO companies have a well-developed network of candidates, a pre-existing database of active and passive candidates, and a strong talent pipeline to refer and source talent.
3.	Process	MSP recruitment is an extension of the workforce procurement process. MSPs cover processes such as tracking resources, time reporting, payroll services, and approvals.	RPO covers the end-to-end recruiting process. Recruitment process outsourcing takes care of a part or all aspects of recruitment, including sourcing, screening, selection, interviews, offer management, negotiation, hiring, onboarding, training, compliance, background checks, admin and payroll management, and F&A services.
4.	Technology	MSP staffing companies deploy VMS technology. Through Vendor Management Systems, MSPs manage the workflow of a contingent or temporary workforce, taking care of recording, approvals, payroll, and billing. The Vendor Management System helps to automate all supplier activities, including costs and compliance.	RPO providers use efficient Applicant Tracking Systems (ATS) to drive the workflow through their comprehensive candidate database systems. ATS technology helps RPO companies to manage requests, align candidates, track interviews, and manage the onboarding process.
5.	Pricing	MSPs use a market-driven pricing model which is applied as a percentage of the workers’ rates. MSP staffing companies charge a commission or take a cut of the wages paid to the temp workers.	RPO providers offer a variety of pricing models and rate plans, including per-hire charges, fixed monthly management fees, and other hybrid fee scales. RPOs charge companies for the delivery cost of skills they are hiring for.

Outsourcing Support for MSP VMS Staffing Services

QX Global Group provides blended support for staffing agencies and MSP providers, offering a range of RPO solutions and VMS staffing services. QX Recruitment Services is highly recommended for traditional RPO solutions, MSP VMS services, and end-to-end recruiting support to staffing and recruitment companies in the UK and the US. Our nearshore and offshore recruitment outsourcing services help to scale service delivery efficiency and save business costs by almost 50%. We also help automate and optimize administrative processes such as SOW management, expenditure management, and reporting processes. Our offshore experts are experienced and trained to use different VMS programs, which help you save time and resources on training. Get in touch to learn more about RPO solutions and MSP recruitment services.

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Originally published Nov 18, 2022 01:11:31, updated Feb 05 2024

Topics: MSP VMS Recruitment, Offshore RPO Services, RPO Solutions