Everest Group: Recruitment Process Outsourcing Market Projected To Grow Up To 30 Percent In 2011 | Press Release

DALLAS, November 18, 2010 ─ The Recruitment Process Outsourcing (RPO) market is projected to grow about 25-30 percent in 2011 following the market’s rapid growth in 2010 that saw deal signings double over the previous year, according to a research study by Everest Group, an advisory firm on global services.

The RPO market is estimated at about US$1.1 billion in annual contract value (ACV) and is projected to reach between US$1.38 to 1.45 billion in ACV in 2011, according to Everest Group’s Recruitment Process Outsourcing Annual Report 2010 – A Year of Rapid Growth and Intense Competition. The annual report is the first of a three-part series focusing on RPO with RPO Supplier Compendium and RPO Supplier and Capability Assessment reports to be released early next year.

“While we’re seeing explosive growth in new deal signings this year, deal sizes are smaller with buyers taking a selective approach along with lesser number of hires per deal,” said Rajesh Ranjan, research director. “Beyond direct cost impact, we expect to see more buyers look to achieve business impact by taking a more strategic approach with RPO and look for total workforce solutions, but adoption will be gradual due to lack of integrated solution availability. While the market is dominated by large buyers, we expect the mid-market to grow as these buyers look to scale up in an improving economy.”

Although traditional drivers such as cost reduction and scalability continue to be important, especially for first generation buyers, second generation buyers are increasingly looking for higher business impact from RPO such as better quality of hires, according to the report.

Other report insights include:

  • North America continues to lead RPO adoption, representing more than half of all deals; however, adoption in Continental Europe is rising.
  • In 2010, North American multi-national companies (MNCs) drove adoption in other geographies; United States and European MNCs continue to drive adoption in Asia Pacific.
  • Most RPO deals continue to be single country, and there was a perceptible increase in this trend.
  • A lack of comprehensive global RPO offerings led to a large percentage of buyers adopting a multi-vendor strategy.
  • Adoption of global sourcing saw a gradual increase in 2010, although it still lags behind significantly compared to more mature HR Outsourcing (HRO) processes.
  • Manufacturing continues to lead adoption with rapid growth occurring in the services sector that is comprised of verticals such as professional services, hotels and education. Healthcare, high-tech and telecom saw a dip in adoption.

Intense competition exists among RPO service providers with Manpower, The Right Thing, PeopleScout, Adecco, Kenexa, and Aon Hewitt as leading providers in terms of hires managed. Other providers also covered in the study include Accenture, Alexander Mann Solutions, Caliber Point, CDI-World Concert, Futurestep, Hays, Hudson, hyphen, IBM, Infosys, KellyOCG, Ochre House, Pinstripe, SourceRight Solutions, Talent2, Wipro and Yoh.

For more information about the report, Recruitment Process Outsourcing Annual Report 2010 – A Year of Rapid Growth and Intense Competition, other RPO or HRO reports, or other research services, please visit research.everestgrp.com, email  [email protected] or call +1-214-451-3110.

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