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Recruitment Process Outsourcing (RPO)

RPO is an alternative workforce solution that involves outsourcing a company’s permanent recruitment process and responsibilities, to an external recruiting provider to manage. A full RPO service includes all functions involved with permanent recruitment, including the provision of recruitment technology platforms. The services may be delivered either on the client’s site or delivered off site.

Typically, the RPO Provider will liaise with the client’s hiring managers, process requisitions and source candidates. They’ll also deal with any second tier suppliers, arrange interviews, extend offers, and conduct onboarding activities. It may also include value added services such as branding and talent marketing. An RPO Provider can also be engaged for a specific short-term hiring project (Project RPO). Alternatively, the arrangement may be a partial RPO. This is where only certain functions (i.e. sourcing and screening, or candidate management) are outsourced to the RPO Provider.

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Statement of work (SOW)

An SOW is a document used to detail the scope of work, specifications, deliverables, and milestones of a specific project. It will usually be based upon a fixed price and will be subject to acceptance criteria and warranties. The SOW is governed by legal terms called a Master Services Agreement (MSA) agreed between the parties. Those legal terms will usually include payment and invoicing terms, obligations of the parties, termination provisions, data protection, confidentiality, intellectual property etc. The MSA acts as a framework agreement governing one (or many) SOWs.

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Master service agreement (MSA)

A Master Services Agreement (MSA) is appropriate where the relationship between the parties in intended to be on-going, rather than the provision of a one-off service or product. Where the parties wish to continue to work together in the future, the MSA acts as a framework agreement governing the legal relationship between them., setting out the legal provisions such as duration, obligations and liabilities.

Once agreed, the MSA sits over one or a number of separate SOWs which sets out the commercial terms for each project such as scope, specification and price.  The terms of each SOW will vary from project to project, whereas the provisions of the framework MSA remains the same (subject to any variation agreed between the parties).

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Managed Service Provider (MSP)

What’s an MSP?

A MSP is an outsourced third-party that assumes responsibility and control of day-to-day operations for a client. In recruitment, a MSP can either be engaged by a client as a Master Vendor or a Neutral Vendor.

Master Vendor

A Master Vendor is an outsourcing solution where a client has outsourced its temporary recruitment function to a sole recruitment agency who has full responsibility for filling roles for that client. Generally Master Vendors attempt to fill roles themselves with their own candidates within an agreed timeframe, but when they aren’t able to source a suitable candidate then they release those roles to other suppliers (second tier agencies) to find a suitable candidate.  Master Vendors normally insist that the suppliers do not communicate directly with the client.

Neutral Vendor

A Neutral Vendor is also an outsourcing solution where a company has outsourced its temporary recruitment function however it differs from a Master Vendor because the Neutral Vendor is not necessarily an agency. Unlike a Master Vendor, the Neutral Vendor does not fill roles itself. Instead, a Neutral Vendor will enter into contractual arrangement with suppliers and when the Neutral Vendor releases a vacancy, those suppliers will have the opportunity to find the most suitable candidates to fill that role.  Neutral Vendors will generally allow suppliers to communicate directly with the client’s hiring managers.

Both Master Vendors and Neutral Vendors are engaged on a Managed Service Provider (MSP) agreement with the client. In addition to filling roles, their responsibilities include supplier performance management and supply chain compliance, both measured against a strict service level agreement with the client.

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