10 Cost-Saving Reasons to Outsource Your Entire Recruitment Process

December 13, 2018

In this series, we are focusing on how organisations can benefit from recruitment outsourcing, including the improvement that it can bring to candidate engagement.  

RMS (Recruitment Managed Services), including MSPs (Managed Service Providers) and RPOs (Recruitment Process Outsourcing) help organisations improve their resourcing strategies and significantly reduce costs, offering a concrete alternative to traditional processes.

Receive a Better ROI

The right MSP partnership can help organisations reap maximum benefits from their recruitment outsourcing, leading to superior organisational performance and the fulfilment of projects, while also ensuring money is saved.

Cost Savings

Outsourcing can help organisations save money on the end-to-end activities directly connected to their contingent workforce. This can range from savings on contractor rates to supplier margins. We saved one client €1.4 million.

We classify cost savings in two categories: cost saving (get it) and cost avoidance (keep it) and they are measured from direct and indirect sources.

Cost savings (Get it): where we reduce the money you are currently spending.

Cost avoidance (Keep it): where we make sure you keep the saving going forward.

Direct: significant financial savings can be reaped by focusing on direct activities connected with a company’s contingent workforce.

Indirect: while direct cost-savings often result in more financially significant savings, the centralisation of procedures can result in indirect savings for a business. This will also reduce workforce management complexity, giving HR and hiring managers time to focus on other important tasks.  

Cost Saving Strategies

Here are 10 ways an MSP or RPO can help your organisation reduce its outsourcing costs:

Direct Cost Saving Strategies


  • Rate benchmarking – rigid project deadlines and competition for talent often results in excessive contractor rates. An MSP or RPO can use rate benchmarking to ensure your rates remain competitive but in line with the market.


  • Utilisation audit – assessing the utilisation of the resource across the contingent workforce. Is everyone 100% utilised on their projects? Could efficiencies be made by combining roles or sharing resource across projects? An utilisation audit will ensure companies are receiving optimal performance from their contractors, saving time and money.


  • Agency margin reduction – time constraints and complex PSL pricings can drive up costs. An MSP or RPO can help you to reduce the margin that agencies charge you, often making the biggest financial impact.


  • Tenure discounts – this reduces the percentage margin that agencies charge based on the contractor’s length of service.


  • Contractor furloughs – during the quieter summer and Christmas holiday periods, your company could make significant savings by implementing a 1 – 3 week break for contractors who are not on critical projects. For example, on a population of 40 workers with an average day rate of £450 per day, implementing a 3 week furlough could save you £270,000 per year.


Indirect Cost Saving Strategies


  • Internal resources – reallocation of internal resources involved in the management of recruitment can be key to making indirect cost savings for a company.


  • Invoice reduction and consolidation – relating to procedure centralisation, a company could make significant savings by providing one consolidated invoice per month. This will dramatically reduce the time you spend on processing payments to all agencies and suppliers.


  • Document management and compliance – reducing risk is crucial when engaging contingent workers, with a significant amount of legislation to adhere to. IR35 legislation will now be introduced into the private sector. It is more important than ever for companies to ensure they have a reliable partner that has future proofed processes for document management and compliance in case of future audits.


  • Rate card management – implementation of a rate card can significantly drive down costs within a contingent workforce, with set rates benchmarked to the wider market.


  • Extension management – companies can find significant savings by managing the extension process, reducing the amount of rate increase requests at the extension point by 85%. Achieved by justification forms, contractors will have to justify their reasons for such requests, get them signed and agreed before rates will be increased.  

How Can Harvey Nash Recruitment Solutions Help?

Picking the right MSP or RPO is crucial if you want to implement the above cost savings strategies effectively.

At Harvey Nash Recruitment Solutions, we deliver top RMS for our clients. With a bespoke approach, we can tailor our solutions to remove your company’s specific recruitment issues. Find out more today.

Access smarter and faster talent recruitment