Global Recruitment Process Outsourcing Market Will Reach $7 Billion by 2010
Analyst: Gary Bragar
Recruitment process outsourcing (RPO) is in its early stages compared to more mature HRO services such as Payroll and Benefits Administration, yet it is one of the most important and fastest growing services emerging in support of organizations' talent management requirements. Talent management is the top HR issue faced by organizations today, hence the need for improved speed and quality of talent acquisition is the major driver for companies looking to outsource to providers with recruitment expertise.
NelsonHall's latest HR Outsourcing study provides a comprehensive assessment of RPO services globally, and contains key recommendations for vendors addressing this market. The study identifies a global RPO market growing at an average annual rate of 37%, and forecasts that the market will be worth $7 billion by 2010. Though growth is being led by U.S.-based companies, the 'war for talent' is impacting organizations in both the developed world and in emerging regions such as India; demand for RPO is global, with high growth being seen in all regions.
Key findings from the study include the following:
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Vendors need to be able to perform an integral role in the development, implementation and execution of their clients' Talent Management and Workforce Planning strategy.
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Standalone RPO represents a much greater share of the market than does RPO provided as part of a multi-process HRO offering; it is also experiencing the highest growth rates.
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Clients are increasingly looking for a variable cost structure to pay for services based on usage. Vendors need to be able to scale their workforce to meet demand for peaks and valleys.
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Most current activity is in serving large companies. However, as the market is beginning to mature, increased demand is being seen from small and mid-sized companies.
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Service providers should provide a service that includes an on-site presence: today, globally, just 31% of service providers work onsite but this proportion is expected to increase in conjunction with talent acquisition demand.
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Most RPO services are provided from onshore multi-client delivery centers, but offshore delivery is seeing high growth, in particular for non-client facing work.
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Service providers are partnering for access to technology and for support services such as assessments and background checks. They are also partnering with other recruiting providers, in particular where they do not have a geographic presence.
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Acquisitions are common as service providers look to increase their geographical expansion and to improve recruiting capabilities.
The study utilizes a combination of user interviews and vendor research to address topics such as recruitment issues and challenges faced by user organizations, usage of RPO, and benefits and vendor selection criteria associated with RPO. The report is written to assist both executives researching vendor capabilities before making purchasing decisions and also market managers developing strategies to target segments of the RPO market.
The study, entitled 'Targeting Recruitment Process Outsourcing' is published within NelsonHall's HR Outsourcing subscription program, and is also available for separate purchase. For more information, contact Paul Connolly.