Recruitment agency, RPO, or in house: which one do you need?
Companies often ask us which model they should use before they have worked out what problem they are solving. The models are genuinely different, and the wrong one wastes money in a way that is not obvious until months later.
Contingency recruitment
An agency finds candidates and is paid only if you hire one, usually a percentage of first year salary.
Works when: the role is reasonably standard, you want to test the market without upfront commitment, and you can absorb a variable pipeline.
The catch: the recruiter is paid only on placement, so the incentive is speed and volume. If several agencies are working the same role, each is racing, and you get quantity. Contingency also works poorly for senior or confidential searches, because the work required is not compatible with the risk of no payment.
Retained search
You engage a firm exclusively and pay in stages, typically part upfront, part at shortlist, part on placement.
Works when: the role is senior, specialised, or confidential, and the cost of getting it wrong is high.
Why it changes the work: being paid through the process means the recruiter can map the market properly, approach people who are not looking, and take the time a real search needs. It also means they can tell you honestly that your salary is below market, which a contingency recruiter racing three competitors cannot afford to do.
The catch: you commit money before you have a candidate. That only makes sense with a firm you trust.
Recruitment process outsourcing
RPO means outsourcing part or all of your recruiting function, usually for a defined period or volume. The provider may handle sourcing, screening, scheduling, and offer management, often working under your brand.
Works when: you are hiring at volume, or standing up a new team quickly, and you do not want to build permanent internal recruiting capacity for a temporary spike.
The catch: it is a bigger commitment with a longer setup, and it is poor value for small or irregular hiring. Companies hiring a handful of people a year should not be buying RPO.
In house recruiting
Your own recruiter or team.
Works when: you hire continuously and predictably enough to keep someone busy, and there is real value in deep knowledge of your business.
The catch: an internal recruiter is a fixed cost and has one network. For a specialised search outside their area, they will be slower than a specialist. Most companies at scale end up with in house recruiting plus external help for the hard roles, which is a reasonable equilibrium.
How to choose
- One or two standard roles this year: contingency, or a single trusted partner.
- A senior, confidential, or business critical role: retained.
- Twenty hires in a quarter for a new operation: RPO, or a dedicated engagement with a firm that can staff it.
- Steady hiring all year, every year: build in house, and keep an external partner for the specialised searches.
- Hiring in a country you do not operate in yet: external, whatever the volume. Local market knowledge is the thing you are buying, and it is the thing you cannot build quickly.
Questions worth asking any recruiter
- Have you filled this kind of role in this market, and can you describe one?
- What is your process, specifically, from brief to shortlist?
- What is the guarantee period if the person leaves, and what does it actually cover?
- Will you tell me if my salary range is not competitive?
- Who does the work, you or someone I will not meet?
That fourth question is the most revealing one. A recruiter who will not give you inconvenient information is selling you a shortlist, not solving your hiring problem.
We work on both contingency and retained terms depending on the role, and we will tell you which one your situation actually calls for, including when it is neither.