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MSP and RPO

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Brief introduction to MSP and RPO

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MSP and RPO

  1. 1. Recruitment Outsourcing<br />MSP and RPO<br />
  2. 2. Recruitment Motto: <br />Right people, right time, right place<br />Randell + Associates<br />2<br />
  3. 3. Recruitment Outsourcing<br />Two models exist in the market: MSP and RPO<br />MSP-Managed Service Programs<br />RPO-Recruitment Process Outsourcing<br />Randell + Associates<br />3<br />
  4. 4. MSP<br />RPO<br />One company provides labour to another company through a network of recruitment firms who source the talent<br />One to one relationship between the RPO provider who identifies talent and delivers it to the client<br />Differences MSP and RPO<br />Randell + Associates<br />4<br />
  5. 5. RPO Delivery Model<br />RPO Provider<br />Client Company A<br /><ul><li>Contracts out Delivery of Recruitment</li></ul>Sources and <br />supplies labour<br />Client Company A<br />Randell + Associates<br />5<br />
  6. 6. MSP Delivery Model<br />MSP Provider<br />Client Company A<br />Contracts out: <br /><ul><li>Delivery of Recruitment
  7. 7. Management of Labour
  8. 8. Management of Cost of Labour </li></ul>A<br />B<br />C<br />D<br />E<br />F<br />G<br />Recruitment Supplier Network<br />Client Company A<br />Randell + Associates<br />6<br />
  9. 9. MSP<br />MSP is designed to find the contingent (hourly) labour most organizations need in some form or other<br />Selection of an MSP provider is normally done by the Procurement or Supply Chain departments<br />Management of the MSP vendor is done by the Procurement or Supply Chain department<br />Input from HR (Recruitment) is often sought through both processes<br />Randell + Associates<br />7<br />
  10. 10. MSP<br />MSP vendors tend to be some of the largest staffing firms in the world<br />They are paid by charging a management fee of x% to the client, which they pass on to the agencies who deliver the labour<br />The 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 annually<br />Canadian MSP’s are much smaller, in the $10’sM<br />As a result, not many are operating here and it is not a true growth market<br />Randell + Associates<br />8<br />
  11. 11. MSP-How does it work?<br />MSP team works with client managers to forecast labour needs<br />Partners with agencies sending specs for jobs<br />Ensures delivery of labour as needed and for agreed cost<br />Recruitment agencies are the employer and responsible for payroll, benefits, training and management of the employee<br />Randell + Associates<br />9<br />
  12. 12. RPO<br />RPO is designed to mimic the internal recruitment function and appear to candidates as the internal recruitment process<br />In an RPO model, recruitment is provided by third party recruitment agencies, off site or on site<br />RPO recruiters use internal emails, phone numbers and advertising materials, approved by the hiring organization<br />The RPO provider appears as an extension of the HR department although they are not <br />Randell + Associates<br />10<br />
  13. 13. RPO<br />RPO is often used for high volume recruitment (call centre staff) or project based roles (short to medium term) or to replace ALL internal recruitment<br />The key difference with an MSP is that the roles recruited for in RPO are internal positions in the organization<br />Randell + Associates<br />11<br />
  14. 14. Why use RPO?<br />Cost effective-the provider ramps up or down based on client needs<br />No need to hire/fire recruiters<br />RPO has talent pools available (or should)<br />Can find an RPO that focuses on your niche (Manufacturing, Banking, IT)<br />Fees are usually based on placements made and the RPO provider guarantees or replaces staff, like any recruitment agency<br />Saves space, hiring needs as all recruiters are external resources<br />Randell + Associates<br />12<br />
  15. 15. Why use MSP?<br />Cost <br />Risk <br />Quality<br />Control<br />Randell + Associates<br />13<br />
  16. 16. Why use MSP?<br />CostContainment<br />The management fee, typically 1-3% of total cost of recruitment, is less than paying to recruit each hire<br />MSP’s take on all the risk and cost that come with employees<br />Contingent needs fluctuate greatly and costs per hour/project need to be managed tightly, which MSP does<br />Risk Management <br />MSP ensures contractors are compliant with organizational or regulatory requirementsand tracks that for the employer<br />Workers are not client’s employees, so there is no duty of care or other requirements of employers<br />Employing agency must have liability insurance, and other insurances such as worker’s compensation <br />Randell + Associates<br />14<br />
  17. 17. Why use MSP?<br />Quality<br />MSP screens and provides only the top talent <br />Recruitment agencies are not guaranteed a set number of placements or continued opportunities to make placements, creating healthy competition<br />Control<br />Supplier networks are managed very closely for meeting pay requirements, and for employer obligations<br />Randell + Associates<br />15<br />
  18. 18. Why use MSP?<br />Employing agency has full responsibility for managing the labour <br />Labour can be removed at any time/flexibility<br />Best access to talent across regions/borders<br />MSP’s tend to be large global firms with large networks of agencies that specialize in core industries or geographies<br />MSP providers need to meet organizational /legislative requirements for diversity/representation/small business etc.<br />Deep talent pools readily available through the supplier networks<br />Numbers focussed and numbers driven<br />Randell + Associates<br />16<br />
  19. 19. Why use MSP?<br />MSP’s are generally awarded 3 year contracts and provide quarterly updates on the program success <br />They must compete for the opportunity each time and must demonstrate compliance with the program requirements<br />Randell + Associates<br />17<br />
  20. 20. The future of Recruitment Outsourcing<br />Significant growth in APAC and Europe<br />Consolidation of MSP and RPO providers globally<br />Larger, more global deals than before<br />Primarily USA or HQ driven with subsidiaries/countries following<br />Real benefit to organizations with either model<br />Randell + Associates<br />18<br />

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