MSP vs RPO: What Is the Difference Between MSP and RPO?

MSP vs RPO Explained

When you hear “MSP,” your mind probably goes straight to IT. That’s fair – managed services provider definition often points to tech stuff like outsourced IT support or managing cloud infrastructure.

But here’s where it gets interesting: MSPs aren’t just about IT.

So why are people talking about MSP vs RPO in the world of hiring? Aren’t they apples and oranges?

Well, not exactly. In workforce solutions, MSPs actually have a different hat to wear – they help companies manage external workers like contractors, freelancers, and temporary staff. RPOs, meanwhile, focus on full-time employees and handle the outsourcing recruitment process.

Same goal – getting the right people on board – but they go about it in very different ways.

In this article, we’ll walk through RPO and MSP meaning, how each model works, when it makes sense to use one over the other, and how to tell which fits your hiring needs better. Let’s break it down.

RPO Meaning, Functions, and Cost Factors

Before we jump into comparing the two models head-to-head, let’s take a closer look at what each one actually does. First up – RPO and MSP meaning, and then, we’ll head onto their purposes and pricing structures.

RPO Cost

When it comes to RPO cost, providers often charge a fee per hire or a monthly subscription, depending on the scope. While not necessarily “cheap,” RPO can lower the cost-per-hire and reduce time-to-fill, especially for high-volume or hard-to-fill roles. Other pricing models, like project-based and consulting fees, also apply.

Understanding MSP: Definition, Services, and Pricing

MSP Cost

In the MSP RPO debate, MSPs typically work on a management fee or markup model, where they earn a percentage of the spend on contingent labor. The goal is to bring down overall labor costs while streamlining operations across multiple staffing agencies.

Key MSP vs RPO Recruitment Differences

Now that we’ve defined MSP and RPO, let’s dig into where they really start to diverge. RPO and MSP solutions serve different needs. And it becomes crystal clear when you look at the way they operate across four main areas.

Recruitment Ownership and Responsibility

What is the difference between RPO and MSP when talking about responsibility over people and processes?

In the former, the provider becomes an extension of your internal HR team. They take ownership of the recruitment process, from defining job roles to onboarding. RPOs are often embedded into your company culture and align closely with your employer brand. You’ll collaborate with them on strategy, but they’re doing the heavy lifting when it comes to execution.

With an MSP, you’re outsourcing the management of external staffing, not the actual recruiting. The MSP oversees how vendors deliver talent but doesn’t usually recruit directly. You stay more removed from day-to-day hiring decisions, while the MSP ensures suppliers stick to the process, pricing, and compliance rules.

Recruitment Tools and Technology

What’s the difference between RPO and MSP in terms of best practices?

RPO providers typically use or integrate with an Applicant Tracking System (ATS) to manage your pipeline of full-time candidates. They may also bring in tools for employer branding, candidate engagement, and recruitment analytics. In many cases, they tailor the tech stack to your needs and collaborate with your HRIS team.

MSPs lean heavily on Vendor Management Systems (VMS) to track contingent labor spend, manage staffing suppliers, and ensure process compliance. Their tools are built more for coordination, rate negotiation, and centralized invoicing than for direct candidate engagement.

Sourcing Strategy and Channels

And what is RPO and MSP recruitment like in terms of hiring approaches?

RPOs take a strategic, brand-first approach to sourcing. They focus on attracting the right full-time talent using employer branding, job boards, databases, referrals, and social recruiting. Since they often represent your company directly, they also work to position your organization as an employer of choice.

MSPs don’t usually source talent directly. Instead, they manage the vendors that do. That means the sourcing strategy is more about ensuring the suppliers are following agreed processes and hitting SLAs (service level agreements), rather than engaging talent themselves.

RPO and MSP Scalability in Recruitment Operations

Integrated RPO and MSP providers are quite similar in this aspect.

RPOs are designed to scale up or down with your full-time hiring needs. Whether you’re hiring for a new location or ramping down after a major recruitment cycle, they can adjust the size of the team and the services you use. It’s a flexible model that works well for growth, seasonal spikes, or hiring freezes.

MSPs thrive in high-volume contingent labor environments. Their systems and processes are built to handle lots of vendor requests and worker onboarding without bottlenecks. So if you suddenly need hundreds of temp workers across regions, MSPs can coordinate it all without blinking.

When to Choose RPO vs MSP: Which One Fits Your Hiring Goals?

Both RPO and MSP services offer great value, but only if you’re applying them in the right context. Think of it like choosing between a full-time employee and a freelancer: it depends on the job, timeline, and long-term goals.

Here’s a breakdown of the most common RPO MSP hiring scenarios and which model is built to handle each one.

Leading Providers of MSP and RPO Services

By now, you probably have a good grasp of the RPO and MSP difference. You’ve seen how MSP/RPO solutions can complement each other depending on whether you’re hiring permanent employees or managing a contingent workforce. But who actually delivers these services?

When people ask, “what is MSP and RPO?”, the next logical question is: who are the major players in this space? Understanding the difference between RPO and MSP is only half the battle – you also need to know which companies excel at delivering these solutions.

In this section, we’ll walk you through some of the top RPO companies and trusted MSP services. We’ll also highlight providers that offer both models in one integrated package, helping you simplify vendor management. We formed these lists based on information from resources like Clutch, G2, and SHRM, and analyzed what services the providers offer. 

Final Thoughts: Choosing Between MSP vs. RPO

So, here’s the bottom line: the difference between MSP and RPO really depends on what kind of talent you’re after – and how hands-on you want to be.

If you’re looking to build out your full-time team and boost your employer brand, RPO is probably your new best friend. But if you’re juggling contractors, freelancers, or temp workers and just want someone to take that chaos off your plate, MSP is the way to go.

Lots of companies use both. RPO for permanent hires, MSP for contingent roles. It’s not about picking sides in the RPO/MSP showdown, it’s about finding the combo that works best for your business.

FAQs about the RPO MSP Difference

Explore MSP vs RPO differences to learn which one is most suitable to fill your needs.