A recruiting agency finds a candidate for a role you'll fill yourself, charges a fee when you hire them, and moves on. An RPO (recruitment process outsourcing) provider runs your recruiting for you over months or years, and everyone it finds becomes your employee. A contractor of record that also sources, like sourceBOLD, finds and vets the person and then stays: it holds their contract and pays them for as long as they work with you. The first two help you hire; the third means you don't have to employ anyone at all.
Not legal or tax advice. This guide compares how these services are structured. Employment and contracting rules depend on the facts and on where the person works, so check your situation with a qualified attorney.
What does a recruiting agency do?
A recruiting agency searches for candidates for one role, screens them, and presents a shortlist. When you hire one, you pay the agency a fee and the person becomes your employee, on your payroll, under your contract. The agency's job ends there, apart from a guarantee period (often one to three months) during which it will find a replacement if the hire leaves.
Agencies usually work on contingency, paid only if you hire someone they introduced, or on retainer for senior searches. Fees are commonly quoted at around 15 to 30 percent of the hire's first-year salary. Some agencies also supply temporary workers, who are the agency's employees and are billed to you by the hour.
What is RPO, and how is it different from an agency?
RPO is recruiting outsourced as a function rather than one search at a time. The provider acts as your recruiting team, or part of it: it builds your hiring process, writes job posts, sources and screens candidates, schedules interviews and often uses your brand when it talks to candidates. It can cover a whole company's hiring or one department's.
The people it finds are still your employees, hired by you. RPO is priced as a monthly management fee, a fee per hire, or a mix. It fits a company with steady hiring volume that wants a recruiting function without building one in-house. For one or two roles, it's usually more than you need.
How does a contractor of record compare?
A contractor of record answers a different question. Instead of "who will help me hire?", it answers "can someone work on my team without me employing them?" sourceBOLD does both halves of that:
- We find and vet them. We screen candidates against your role, meet them, check their English, confirm their experience, contact references and review their work. How we vet candidates shows each step.
- You pick and direct the work. You interview the people we put forward and choose who joins. You work with them directly on the deliverables and deadlines in the SOW.
- We contract and pay them, for as long as they stay. The person is an independent contractor of sourceBOLD. We hold their contract, collect their tax form and ID, and pay them in US dollars after your invoice settles.
Because we stay for the whole engagement, there's no fee for the introduction. You pay one monthly fee per person, their pay included, with no placement fee. If you later engage them outside sourceBOLD during the MSA or for 12 months after it ends, a non-solicit fee applies.
How do the three compare side by side?
| Recruiting agency | RPO | Contractor of record (sourceBOLD) | |
|---|---|---|---|
| What you buy | A candidate for one role | A recruiting function | A dedicated professional on your team, contracted and paid by us |
| Who engages the person | You, as your employee | You, as your employees | sourceBOLD, as an independent contractor |
| How it's priced | One-time fee per hire | Management fee, per-hire fees, or both | One monthly fee per person, their pay included |
| Who pays the person | You, through your payroll | You, through your payroll | sourceBOLD, as contractor payments (no payroll), with their tax form collected |
| After they start | The agency moves on | The RPO keeps recruiting | We stay and pay them for as long as they stay |
| If it isn't working out | A replacement during the guarantee period | You manage it | We have the work corrected at no charge; if it isn't fixed within 10 business days you can end that engagement, and we propose replacements |
| Countries | Usually where you employ people | Usually where you employ people | Most of the Americas, without you employing anyone there |
Is sourceBOLD a recruiting agency?
No. An agency finds someone and moves on, and you become their employer. We find and vet them, you pick who joins and direct the work, and we hold their contract and pay them for as long as they stay. Engagements are built to last, with no lock-in: month-to-month, 30 days' notice. 92% of the developers we have placed stayed 12 months or more.
Which one should you use?
- You want an employee in a role you'll fill permanently. Use a recruiting agency, or hire directly.
- You hire many people a year and want a recruiting team without building one. Use an RPO.
- You want someone dedicated to your team, in a country where you don't employ anyone, without becoming their employer. Use a contractor of record. If you want that person as an employee instead, an employer of record is the better fit.
In short
Agencies and RPOs help you hire employees, so the job of employing them stays with you. A contractor of record that sources, like sourceBOLD, finds the person and then holds their contract and pays them for the life of the engagement, for one monthly fee. For the wider set of models, see PEO vs EOR vs contractor of record; for our prices, see what it costs.