The Evolution of Outsourced Recruiting and Why Most Models Still Miss the Mark

By Stephen Morel, FlexTek Founder and CEO

When I started in this industry back in 1992, companies with high-volume hiring needs didn’t have a lot of options. You either built your own recruiting team, or you called in a staffing agency and paid their markup. That was the whole playbook. Since then, the industry has evolved but still faces some limitations. We’ve added new terms, new models, and new tech but many companies are still running into the same problems: unclear value, high turnover, and outsourced recruiting partners who aren’t really aligned with business goals. In this post, I want to walk through how we got here, what’s broken in today’s recruiting models, and the outsourced recruiting model we’ve built at FlexTek to offer a more sustainable option, for both our clients and our business.

When “Staffing” Was the Only Option

Back then, internal recruiting teams had limited focus and tools. Most in-house recruiters were juggling multiple responsibilities, so when hiring paused, momentum disappeared, and when demand returned, they were starting from scratch. Without modern tech like Indeed or ZipRecruiter, there was no way to build a consistent pipeline. Job ads went in the Sunday paper, and you hoped for calls on Monday. If they didn’t come, you started over. That’s where staffing firms came in. They filled urgent roles fast and gave companies flexibility without adding headcount. On-site staffing was considered cutting edge, dedicated teams embedded on your floor to keep positions filled. But it was still a traditional staffing model: placing hourly workers, billing markups, and focusing on volume. It rewarded firms for keeping people billable—not for building high-performing teams. The business model was designed to keep seats filled, not necessarily to find the best long-term fit.

RPO Was a Step Forward—Until It Wasn’t

Recruitment Process Outsourcing (RPO) emerged in the early 2000s as a smarter alternative to staffing. Instead of sending over temp workers, RPO firms sourced full-time candidates for companies to hire directly. It promised lower markups, more control, and better results. But the cracks showed early. Most RPOs billed by the offer—not the hire or start date—so clients paid for candidates who might never start. To cut costs, many firms offshored sourcing, leaving recruiters disconnected from the companies they were representing. I once saw a proposal where pricing varied depending on whether interviews happened in the same country as the candidate. It was complex, unpredictable, and hard to evaluate.

I never want to lose a customer just because someone went looking to cut costs. – Stephen Morel, CEO

That lack of cultural alignment led to bad hires and high turnover. Paying a 20% fee for a $16/hour role that turns over in six months just doesn’t work, especially in environments with 30–40% attrition. And even when an RPO or staffing firm was performing well, companies often rebid the work every few years in an effort to cut costs. I’ve seen hundreds of workers moved to a new payroll in a week. That kind of churn isn’t like swapping out a paper vendor—these are people. It affects morale, culture, and retention across the board. 

How We Optimized the Outsourced Recruiting Model

After decades in this industry and working closely with customers through every kind of hiring challenge, we used that perspective to shape something better. We didn’t start from scratch when we built FlexTek’s outsourced recruiting model. We built on what we knew worked, because we’d lived it. There were things about RPO that had real value:

• A scalable approach
• A dedicated team that could plug into your business
• A long-term relationship structure

But we knew it needed more. We brought in local recruiters who understand our customers’ culture and experienced recruiters who bring specific domain expertise because hiring frontline workers isn’t the same as hiring accountants or lab techs. We built our own software layer: not an ATS, but an outsourced recruiting performance tracker. One that shows clients exactly how we’re doing:

• How many candidates we’re talking to
• How many make it to interviews
• How many get offers
• How many accept 
• How long they stay

It’s not enough to say, “We hired 1,000 people.” The real questions are: How long did it take? How many people did we interview to find the right one? Who stayed? These are the metrics clients need to evaluate hiring performance.

A New Way to Price Outsourced Recruiting: Service, Not Headcount

This might be the biggest shift. Instead of charging per candidate (like staffing) or per offer (like RPO), we flipped the model entirely. You’re not paying for a person—you’re paying for the service. The recruiting engine. The metrics throughout the process. The ongoing support. The ability to flex up or down with the business. There’s always a baseline level of support that keeps things stable, but beyond that, it scales with your needs. That makes it more predictable for our clients and more sustainable for us. It also avoids the trap of long-term contracts with no flexibility. Unlike some models that lock you in for three years—whether they’re delivering value or not—we stay because we’re earning it. Every month. Every hire. Do we make the same margins staffing firms used to? No. Are we keeping clients longer and building stronger partnerships because of it? Yes. And that’s the kind of business we want to run.

Final Thought

After decades in this industry, I’ve seen nearly every recruiting model there is—and I’ve learned that anything built on markups, fees, and churn eventually breaks. The costs outweigh the value, and the relationship falls apart. We built FlexTek to solve that. Our model is consistent, measurable, and built for long-term partnership. It helps companies build great teams without overpaying or starting over every few years. I never want to lose a customer just because someone went looking to cut costs. We want to be the partner who scales, adapts, and grows with you. That’s the kind of model companies can count on year after year.