MSP vs RPO: Choosing the Best Solution for Your Recruitment Needs

The global managed services (MSP) and recruitment process outsourcing (RPO) sectors are gaining greater traction as companies look for ways to improve their control over workforce costs and talent acquisition in a competitive labour market with high attrition.

As workforce models become more complex and hybrid, companies are recognising limitations in traditional recruitment programmes and seeking integrated, strategic alternatives. Here, we provide a clear, structured comparison of MSP and RPO to help you choose the model that best aligns with your business.

What is an MSP?

A Managed Service Provider (MSP) is a third-party service company that manages the sourcing, engagement, and administration of a company’s contingent workforce, such as contractors, freelancers, and temporary staff. MSPs oversee the entire supply chain of contingent talent, driving cost savings and talent procurement spends, process efficiencies, compliance, and risk mitigation. After the initial hiring of contingent talent, MSPs can handle contract arrangements, payroll processing, onboarding and offboarding, and reporting. MSPs typically operate through a Vendor Management System (VMS), which provides visibility and control over spending and workforce quality while offering labour sourced from a network of suppliers. Whilst employees may come from various agencies, they are all managed by the MSP, which serves as the intermediary between the vendors and the client. 

Key benefits of an MSP:

• Centralised management of contingent workforce spend, improving visibility
• Standardised, streamlined processes across suppliers
• Cost control and vendor consolidation
• Compliance and risk mitigation
• Greater scalability for project-based hiring

Find out more about our MSP solution.

What is an RPO?

Recruitment Process Outsourcing (RPO) involves outsourcing part or all of your permanent recruitment function to an external provider. Unlike traditional agencies that fill roles ad hoc, an RPO acts as an extension of your internal HR team, managing everything from employer branding and talent mapping to sourcing, screening, interviewing, and onboarding permanent hires. They source candidates similarly to how your talent acquisition team operates, but they bring added expertise and access to advanced tools for finding both active and passive candidates. RPOs utilise data-driven platforms like Applicant Tracking Systems (ATS) to enhance hiring quality, reduce time-to-hire, and provide scalable recruitment solutions, transforming the way businesses attract and retain talent.

Key benefits of RPO:

• Scalable, end-to-end hiring support for permanent roles
• Reduced time-to-hire and improved candidate quality through analytical insights
• Improved employer branding and candidate experience through job fairs, advertisements, social media, and an established candidate database
• Access to specialist recruiters and broader talent pools
• Lower overall cost per hire

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MSP and RPO: A Side-by-Side Comparison

How do outsourced solutions differ from traditional recruitment agencies?

Traditional recruitment agencies generally operate on a transactional, per-hire basis, supplying candidates for specific roles. Meanwhile, MSPs and RPOs offer deeper integration, tactical insight, and flexibility compared to traditional methods, which are more reactive and less aligned with long-term talent strategies.

• Agencies focus on transactional placements
• MSPs optimise how contingent labour is sourced, managed, and measured
• RPOs embed within your business to manage hiring as a strategic function

Choosing between the two

Choosing the right model depends on your company’s workforce composition, hiring volumes, and operational goals.

In some cases, companies may benefit from a blended MSP/RPO solution, a hybrid model which leverages both programmes to support those with a contingent and permanent workforce mix.

Outsourced Recruitment Trends in Europe

While adoption is increasing worldwide, Europe is particularly demonstrating a strong growth market for both solutions. The region is responding to structural and economic pressures, including talent shortages in critical sectors, stringent employment regulations, and rising expectations for cost transparency and operational efficiency.

The European managed services market is forecast to grow at a CAGR of 13.7% from 2025 to 2030, outpacing many other regions. In a report by Kaseya, nearly two-thirds (64%) of MSPs in Europe reported year-on-year revenue growth, with 37% of those seeing growth above 10%, despite macroeconomic uncertainty. A pronounced trend toward vendor consolidation supports this momentum, as 74% of European organisations now prefer streamlined supplier relationships to optimise procurement, delivery, and compliance.

On the RPO front, the European market is expected to increase at a CAGR of 18.8% from 2020 to 2026. While the region historically lagged behind North America in RPO adoption, recent years have seen the emergence of several heavyweight providers and a shift toward more sophisticated, technology-driven RPO models. RPO providers in Europe are increasingly engaged not just for delivery, but to provide consultative value, such as improving employer branding, using AI, CRM, and advanced analytics to deliver data-driven recruitment solutions, and embedding global best practices into local hiring strategies.

Both MSP and RPO offer transformative benefits over traditional recruitment models. The right decision depends on your workforce structure, business objectives, and growth ambitions. As vendor consolidation continues to trend and economic uncertainty demands smarter recruitment decisions, outsourcing part or all of your workforce management function can deliver significant ROI.

NES Advantage – A leading outsourcing company specialising in MSP and RPO

At NES Advantage, our managed solutions offer the agility, expertise, and technology you need to compete for top talent globally. We partner with leading companies across Europe and around the world, supporting them with their unique workforce goals, helping them hire smarter, faster, and more compliantly.

Contact us today to find the right workforce solution for your business.