North American buyers lead adoption for recruiting talent beyond home geography
DALLAS, July 19, 2011 ─ Despite exponential growth in the Recruitment Process Outsourcing (RPO) market, deal signings for multi-country RPO engagements are not keeping pace with the overall RPO market or other multi-country Human Resources Outsourcing (HRO) processes, according to a study by Everest Group, an advisory and research firm on global services. Nevertheless, companies headquartered in North America are leading adopters of multi-country RPO for recruiting talent beyond their home geography.
Last year saw overall RPO deal signings double over 2009, but multi-country deals only saw a modest increase, according to Everest Group’s study, Multi-Country Recruitment Process Outsourcing: Hype vs. Reality. The analysis examines multi-country RPO deals with a minimum of four or more recruitment processes covering two or more countries and other parameters. Everest Group estimates the overall RPO market at about US$1.1 billion in annual contract value (ACV), which is projected to reach between US$1.38 to $1.45 billion in ACV by the end of this year.
“Multi-country RPO adoption lags behind single-country RPO mostly due to cultural and organizational challenges and a lack of service providers with integrated capabilities; nevertheless, we’re seeing increasing interest from regions beyond the traditional strongholds of the United States and United Kingdom,” said Rajesh Ranjan, research director. “To reduce some of the complexities inherent to multi-country RPO deals, buyers are increasingly adopting multi-country RPO on a regional basis rather than a global one, and we expect to eventually see some of these engagements expand and become global. Additionally, we’re seeing service providers develop solutions that will address these challenges and thus prompt increased adoption in the future.”
Unlike single-country RPO where cost savings is the key driver, strategic considerations such as access to global talent, better management control and insight, standardization and service provider consolidation are important drivers for multi-country RPO, according to the report.
Other report insights about the multi-country RPO market include:
- Nearly half of multi-country RPO buyers cover four or more countries of operation, and EMEA ranks highest for average number of countries covered.
- Nearly half of global RPO deals originate outside of North America with the United Kingdom and Continental Europe combining to sign nearly one-third of multi-country RPO deals in 2010.
- Buyers include EMEA nearly as frequently as they include North America in multi-country RPO deals.
- In addition to deals including developed economies such as the United States, Australia, Japan and countries in Western Europe, buyers also frequently include BRIC (Brazil, Russia, India and China) nations.
- The hub-and-spoke model is finding more traction among various delivery models.
- Compared to single-country RPO, a higher percentage of multi-country RPO deals leverage offshoring.
- Several service providers enjoy success in the regional RPO space; however, only a few service providers have significant market share in the global RPO space.
Intense competition exists among multi-country RPO service providers. The top six providers by share of deals signed in recent years are Alexander Mann Solutions, Kenexa, The Right Thing, PeopleScout, Ochre House and KellyOCG. In terms of annual number of hires managed through deals, market leaders are Alexander Mann Solutions, Kenexa, TheRightThing, PeopleScout, SourceRight Solutions and Aon Hewitt. Other service providers also cited in the report include Accenture, Adecco, Caliber Point, CDI–World Concert, Futurestep, Hays, Hudson, hyphen, Infosys, Manpower, Pinstripe, Talent2, Wipro and Yoh.
For more information about the report, Multi-Country Recruitment Process Outsourcing: Hype vs. Reality, other RPO or HRO reports, or other research services, please visit research.everestgrp.com, email [email protected] or call +1-214-451-3110.