What is a staffing agency? Organizations are facing unprecedented hiring challenges that traditional staffing agencies simply weren’t designed to solve. Between remote work, skills shortages in critical roles, and the need to compete with enterprise employers for top talent, growing companies need strategic partners, not just résumé and CV providers.
So, what is the difference between a staffing agency and an RPO solutions provider? In this, article we’ll cover the major differences between RPO and staffing agencies and how to know what’s best for your talent acquisition program.
RPO vs Staffing Agencies: What is a Staffing Agency and Which Recruitment Model is Right for You?
Recruitment process outsourcing (RPO) is a type of business process outsourcing in which an employer transfers delivery of some or all portions of the recruitment process to an external service provider. RPO is a long-term partnership or project-based solution that helps you evolve your talent acquisition strategy to attract and retain high-quality talent to meet your business goals. Outsourcing through an RPO lets you scale up or down during high and low volume periods. RPO recruitment companies can cover everything from high-volume hiring to niche roles and can be regional or cover your global hiring requirements.
Staffing Agencies operate on a transactional model, focusing on filling individual job requisitions. They maintain their own brand, work with multiple clients simultaneously on similar roles, and typically hand off candidates once initial screening is complete.
For companies, particularly small to mid-sized organizations, this distinction matters more than ever. Here’s why.
7 Critical Differences Between RPO vs Staffing Agency
1. Strategic Partnership
RPO Approach: Your RPO team acts as an extension of your in-house team and is your strategic partner in creating a talent acquisition program. RPO recruiters may sit on-site, work remotely, work offshore or a combination, and they’ll usually take on your company name and email domain in their communications. An RPO partner will come to understand your business deeply, which means they are best suited to help you evolve your talent acquisition program to meet your needs now and scale into the future, maintaining institutional knowledge and process consistency.
Staffing Agency Approach: Agency recruiters typically act as a finder—sourcing, pre-screening and introducing candidates to the client (often the hiring manager) who takes it from there. Agency recruiters keep their own company email and brand when interacting with candidates.
This works for one-off hires but breaks down when you’re scaling rapidly. Growing companies need partners who understand your long-term evolution and can anticipate your needs.
2. Process Improvements
RPO Approach: RPO partners conduct comprehensive process audits, identify inefficiencies, and implement scalable improvements. Not only does this reduce time-to-fill, but it also improves the candidate experience. A process evaluation will also include your talent technology. Your RPO partner will assess any gaps, make recommendations for new solutions and support the implementation process.
Staffing Agency Approach: For a staffing agency, the hire-by-hire nature of their work means they’re likely not looking for ways to improve your overall hiring processes. They maintain their own workflows, which can create disconnects and inconsistencies as you grow, impacting the candidate experience and your employer brand.
3. Talent Pooling
RPO Approach: One huge advantage of the long-term relationship you build with an RPO partner is taking advantage of their ability to create talent pools. Having a pool of active and passive candidates speeds up time-to-hire, because when new roles open, you’re not starting from zero.
Staffing Agency Approach: Agencies focus on finding candidates for a specific vacancy. It tends to be a reactive model, in which they work from requisition to requisition. Agency recruiters maintain a pool of candidates for their multiple clients, so these candidates are not necessarily found with your company in mind.
4. Quality + Cultural Fit
RPO Approach: Leading RPO providers offer comprehensive talent assessment solutions, using behavioral interviews, skills evaluations and cultural fit assessments. This is particularly important for small to mid-sized companies as the consequences of a bad hire are far more significant and visible than at large enterprises.
Staffing Agency Approach: Agencies focus primarily on skills and experience matching. Cultural fit assessment, when it happens, is typically limited to basic screening questions. They generally won’t be responsible for administering assessment solutions or advise on how to improve them.
5. Talent Advisory
RPO Approach: RPO partners bring added value through their expertise in talent advisory, including employer branding, recruitment marketing, candidate communications, assessment services, labor market insights, workforce planning and talent acquisition strategy. These capabilities are vital for positioning your organization to efficiently attract, recruit and retain top talent in today’s competitive hiring landscape.
Staffing Agency Approach: Agencies typically post jobs on their preferred job boards and tap their existing networks. Employer branding and recruitment marketing remain your responsibility—assuming you have the expertise internally.
6. Technology Consulting
RPO Approach: RPO providers offer technology consulting, and help you understand how you can leverage AI-powered sourcing, advanced analytics, and tech integration to improve your recruitment outcomes. Some RPO providers offer some kind of recruitment technology component, whether it’s a propriety system, like PeopleScout’s Affinix® total talent suite, or expertise in a variety of talent technology systems. They’ll be comfortable working with your existing systems and can recommend solutions that scale with your growth.
Staffing Agency Approach: Agencies use their own technology stack, which may not integrate with your systems. Limited technology means you miss out on advanced sourcing tools and market intelligence platforms.
7. Reporting and Analytics
RPO Approach: RPO providers take ownership of recruitment outcomes. They’ll work with you to define metrics, KPIs and SLAs, and report on them on a regular basis. RPO dashboards provide visibility into time-to-hire, cost-per-hire, source-of-hire, candidate or hiring manager satisfaction and retention levels. In addition, leading RPO partners bring labor market insights to help you understand the available talent pool in the locations in which you’re hiring and recommendations on how to adjust your strategy.
Staffing Agency Approach: Agency accountability typically ends when they present candidates. Limited reporting means you can’t optimize your overall hiring strategy or demonstrate ROI to leadership.
The Mid-Market Reality: Why Staffing Agencies Fall Short
The challenges facing small to mid-sized companies go far beyond what traditional staffing agencies were designed to handle:
- Remote/Hybrid Talent Competition: You’re no longer competing just with local companies—you’re competing globally for remote talent. This requires sophisticated sourcing strategies and employer branding.
- Skills Shortage Crisis: Critical roles in technology, healthcare, and engineering have candidate shortages of around 40%. Finding qualified candidates requires proactive pipeline development, not reactive posting.
- Candidate Experience Expectations: Top talent expects streamlined, technology-enabled hiring processes. Clunky, agency-mediated experiences drive candidates to your competitors.
- Rapid Scaling Requirements: Whether you’re preparing for Series B funding or geographic expansion, you need recruitment partners who can scale quickly without compromising quality.
The Bottom Line
The talent market rewards strategic thinking over transactional hiring. Organizations, particularly mid-sized companies, that treat recruitment as a competitive advantage—through RPO partnerships, technology integration, and process optimization—will outpace those still relying on traditional staffing approaches.
The question isn’t whether you need recruitment support—it’s whether you need a vendor or a strategic partner. That distinction often determines who wins the best candidates and scales most successfully.