Global Recruitment Process Outsourcing Industry Analysis and Forecast, 2020-2026


A BRIEF HISTORY OF RECRUITMENT PROCESS OUTSOURCING

Human resource outsourcing, of which RPO has been a part, believe it or not, has been around since the 1970s. A small group of revolutionary thinkers around that time, working in two different companies, “Heidrick & Struggles” and “Korn Ferry” started thinking out of the box and came up with an HR outsourcing solution. But for around 30 odd years, Recruitment Process Outsourcing wasn’t really in the limelight. Companies during this time were more interested in outsourcing other HR functions like health & safety, planning, payroll, administration, industrial relations, and consultation. Recruitment wasn’t given much importance back then. The main reason was distrust.

“How could I trust someone else to source the best candidate for my company? I know my company, my people, and the caveats of my industry. It is impossible for someone else to know all this information and hire the right people within a limited period of time.”

This was the common line of thought among hiring managers back in the day. Outsourcing recruitment was unthinkable.

Around the early 2000s, the HR outsourcing industry started witnessing a shift in this thought process. A majority of the businesses still preferred running their hiring function internally but some of them were brave enough to cross borders and enter new territory. At the time, two natural forks were created in this industry on the basis of need. The first, RPOs that did low complexity, high volume work, and the second that did high complexity, low volume work.

This was an important distinction that was recognized early on and was caused due to technological barriers and the availability of special resources. “Educating the buyer” became an important part of selling services to other businesses as an RPO provider. This is how the industry began.

As technology advanced, newer, more efficient tools entered the industry. With these tools came new players, and with new players came competition. This phenomenon kept accelerating with each passing year, pulling in more and more businesses like a tornado cutting through settlements in the countryside and sucking in everything in its path.

Around the same time, businesses started to focus more on fixing their leaky pipes. As a result, scrutiny of budgets increased, forcing managers to lower fixed costs, increase operational profits, and preserve cash. When businesses began exploring alternatives and understanding opportunity costs, that is when RPO truly started to become relevant among small and larger businesses worldwide.

TODAY

Today, there are virtually no important distinctions. Almost all of the RPO providers today offer high complexity, low volume work as well as low complexity, high volume work. Continuous technological advancements and the availability of expertise have closed the large gap that existed between the supply and demand of RPO services.



This bar graph from Statista represents the worldwide spending in the recruitment process outsourcing industry from 2017 to 2022. This study was published in November of 2020, indicating that the RPO industry is and will be performing strongly despite the global economic slowdown that may have been caused by the COVID-19 pandemic.

THE FUTURE OF RPO

Be it any industry, the two main driving forces of growth in any business are either: an increase in efficiency or a decrease in overhead. RPO isn’t any different. Big players are leveraging the latest technologies like machine learning, artificial intelligence, natural language processing, deep learning, and neural networks to make enormous progress in this space. Auto-scraping social networking sites to identify potential candidates, self-planning interviews, automating screening of CVs, automating chatbots to interact with candidates, discreet competitor analysis, and automated appraisal systems are just some of the very real applications of these advanced technologies in the recruitment process outsourcing domain.

Furthermore, the COVID-19 pandemic acted as a catalyst in this grand experiment of remote working. Businesses were forced to operate remotely, and hiring went all digital. What some hiring managers thought would never work, actually worked. People were hired, managed, and unfortunately fired, all while working remotely. This opened up endless possibilities to make progress in this space.

In the coming years as competition increases, innovation will skyrocket and the hiring industry will be setting itself up to go through some really big technological developments that will make the entire recruitment process more efficient, accurate, and streamlined. Many big companies like Exela HR Solutions and ADP are already using artificial intelligence and machine learning to source and screen candidates, which is just scratching the surface. Many more such advancements will come to further reduce or even eliminate human errors and manual workloads. Advancements like the utilization of automated social media recruitment marketing, data-driven insights, and intelligent/interactive application platforms will become mainstream. All of these advancements will definitely make a typical HR department work like a well-oiled machine.

RECENT DEVELOPMENTS IN THE RPO MARKET

A great way to understand what the industry will do in the future is to closely observe what it is doing at present and with what intent. For example, when the performance of a certain employee starts slipping and they start avoiding social interactions at work, more often than not, they have already started submitting resumes and looking out for newer opportunities.

Similarly, here is a list of current strategic developments in the RPO industry that might give you insight into the future:

  • Randstad’s partnership with Vndly: Vndly is a cloud-based technology provider in the vendor management systems (VMS) category. The partnership provided Randstad Sourceright with additional intuitive technology for their solution set that does not require lengthy training or complicated change and update processes.

  • Vndly’s partnership with Pontoon: Pontoon owns a work management system designed to help manage a contingency workforce. Under this collaboration, Pontoon will be providing superior MSP programs that Vndly to strategically architect solutions around business challenges.

  • Cielo’s partnership with Sanofi: Sanofi is a global biopharmaceutical company. Following the partnership, Cielo will be providing end-to-end talent acquisition services for Sanofi in several countries across Asia. Cielo has been providing its expertise in terms of people, process, technology, and brand, to secure the best talent for Sanofi in a highly competitive labor market.

  • Talent Collective’s partnership with Enboarder: Talent Collective is a business consulting arm of Alexander Mann Solution and Enboarder, an onboarding technology company. The partnership was focused on improving the onboarding experience for both candidates and hiring managers post-offer and into the candidates’ employment with clients’ businesses.

  • IBM’s extension of its partnership with Cornerstone OnDemand: Cornerstone OnDemand is a global leader in cloud-based learning and human capital management software. The expansion was aimed to provide the best HR consulting services and talent management technology to businesses around the world. Additionally, Cornerstone clients have direct access to IBM’s comprehensive talent management consulting services. IBM can now directly engage with Cornerstone clients, giving them access to a pool of global consultants who drive end-to-end talent management offerings, including enterprise transformation, strategy, process, systems integration, application management, outsourcing, and learning curriculum design.

  • ADP’s partnership with ZipRecruiter: ZipRecruiter is a leading online employment marketplace. The partnership was focused on making small businesses more competitive in hiring. Under this partnership, ZipRecruiter integrated its online employment marketplace platform with ADP’s RUN Powered HR packages. Together, the companies have been enabling small businesses to quickly find the talent they need inside their HR and payroll solution.

  • Alexander Mann Solution’s partnership with FlexAbility: FlexAbility is the Recruitment Process Outsourcing subsidiary of ABC Consultants. Together, the companies have been working on investing and continuing to deliver innovative, impactful RPO services in India.

  • Cielo’s acquisition of AsiaNet China: AsiaNet China is an RPO, executive search, recruitment, and payroll (HRO) business based in Shanghai. The acquisition strengthened their capabilities in both RPO and executive search.

  • Alexander Mann Solution’s acquisition of Karen HR Inc.: Karen HR Inc. is a leading HR technology company. The acquisition extended Alexander Mann Solutions’ global engineering capabilities with teams based in both Canada and Poland and further supported the company’s aggressive growth plans and commitment to expanding its footprint in the Americas.

  • Randstad’s acquisition of Monster Worldwide, Inc.: Monster Worldwide, Inc. is a global leader in connecting jobs and people. After the acquisition, Monster has been operating as a separate and independent entity under the Monster name. The acquisition strengthened the company’s capabilities in RPO.

  • Alexander Mann Solutions released the first self-developed technology platform, Hourly. The platform enabled organizations to hire hourly workers faster and with greater precision through a completely conversational experience from explore-to-offer, in a single built-for-mobile solution.

  • ManpowerGroup announced the launch of Talent Solutions, integrating three of its current global offerings: RPO (recruitment process outsourcing), TAPFIN MSP (managed service provider), and Right Management. Talent Solutions would provide delivery, technology, and extensive workforce insights across multiple countries at scale, from talent attraction and acquisition to upskilling, development, and retention.

  • ADP launched the Recruitment Process Outsourcing (RPO) Advertising Services. The services enabled businesses to improve their job advertising and recruiting operations. The services have been helping HR professionals and talent acquisition staff by improving the exposure of their job opportunities to probable candidates. It leverages ADP’s proprietary blend of expertise, data, and programmatic technology to capture a higher volume of the talent pool for an equal ad spend.

  • Pontoon, part of the Adecco Group, unveiled the first-ever recruiter-less RPO product, Recruiterless RXO (Recruitment eXperience Outsourcing) Solution. The solution uses technology across the recruitment cycle to increase both candidate and hiring manager experience while also reducing the cost to the customer and increasing the speed to hire.

  • ADP Canada introduced a new suite of high-performance features for ADP Workforce Now. The ADP Workforce Now aimed to help Canadian companies to manage their HR needs. The new suite of features provides seamless cross-border capabilities, broader mobile access to HR tools in real-time, simplified talent management, and AI-powered recruiting.
  • Korn Ferry introduced two new products; the enterprise product for large organizations and the Korn Ferry product for medium-sized organizations. The enterprise product for large organizations uses data from a company’s applicant tracking system, which tracks and filters applications in a recruitment system and integrates the data with Korn Ferry’s innovative tools, which include AI-driven sourcing and machine learning. Korn Ferry Direct enhanced the effectiveness of the talent search process for smaller companies that may not have in-house recruiting resources.

After reading about these partnerships and launches, you can be pretty sure that the majority of the RPO industry is heading towards these three main goals:

  1. Mobile-first implementation to better cater to customers
  2. Targeting small and medium businesses as customers
  3. Implementing artificial intelligence and machine learning to solve complex RPO problems like customer service, talent sourcing, etc.

Are you looking for a professional and fast recruiting service? Exela HR Solutions is a world leader in recruitment process outsourcing and employee onboarding. Save time, effort, and resources right from Day 1. Get top talent delivered to your business at the right time and experience the power of zero productivity loss.

Get in touch with our experts today to learn more about our offerings: https://ehrs.exelatech.com/contact-us 

Sources: blog.rpoassociation.org | statista.com | reportlinker.com | zdnet.com

DISCLAIMER: The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing the subject matter may change quickly and Exela cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a licensed attorney in your area.


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