RPO cost and pricing models 

Once a company decides that recruitment process outsourcing is the way forward to finding great candidates in a timely fashion, the next logical step is to uncover what the RPO solution will cost. 

RPO providers consider several factors when shaping their cost models, including: 

• The types of vacancies you wish to fill and the talent you are looking to hire  

• Whether your project is long-term or short-term. Long-term cooperations typically cost more than short-term 
   
• Whether you need additional services such as inclusion, diversity, or employer brand amplification initiatives 

Recruitment process outsourcing pricing models 

1.Cost per hire model 

This pricing model means that you and the RPO provider found common ground as to what fee will be paid for each successful hire. In many cases, the fee is based on a percentage of the annual income of the hired person.  

The benefit of paying a cost-per-hire fee is that the rates of the RPO service provider are unaffected by factors such as the candidate’s location, industry, or position.  

However, this does mean that the amount you will have to pay can vary based on the experience of the hired candidate. For example, you pay the same percentage for each candidate but the fee itself can vary greatly. Hiring junior candidates under this pricing model will therefore be significantly cheaper as opposed to hiring somebody to join your upper management.

2.Monthly management fee 

The cost structure for a monthly management fee means that you pay a standard rate each month, regardless of how many successful hires join your team each month.  

The standard monthly fee is based on the efforts that are required from the RPO provider, the costs of the RPO team, and the resources that are needed to fulfil your hiring plans.  

3.Reduced monthly recurring fee plus success fee 

RPO service providers apply a lower baseline fee each month but apply a success fee for each accomplished hire. Success fees are calculated in a similar way as the cost-per-hire pricing model and will be added to the monthly rate you pay for the RPO services.  

While this might sound less beneficial at first, this pricing model can be favourable when you are looking to hire a wide range of candidates for different positions. The RPO service provider will dedicate a complete RPO-team to building, finding, and selecting candidates from exclusive talent pools all while you pay fewer costs each month. 

4. Success fee pricing models 

This pricing model has the lowest financial risk for companies. Only when a candidate is hired, the client of the RPO service provider has to pay a fee.  

You can imagine that where the risk for you as a client is reduced, it is increased for the RPO provider. That is why RPO providers who apply a success-fee-only pricing model typically ask for a higher success fee (percentage of the hired candidate’s annual income) compared to RPO providers who apply one of the abovementioned pricing models. 

5. Reduced monthly management fee plus flat-rate fee 

Lastly, we arrive at a hybrid cost model where the RPO service provider asks for a monthly recurring fee that is lower compared to e.g. cost-per-hire models but asks for a flat success fee for each successful hire.  

This pricing model is particularly favoured by companies who are looking to hire large numbers of candidates for positions that are similar in either tasks, industry, or salary range.