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Talent Shortage Expected to Hamper Innovation, Customer Service in 2019, According to Everest Group Report | Press Release

By | Press Releases

Firm to share research findings on enterprise key issues and offer insights, recommendations on outsourcing.

Talent challenges are starting to create real hardship for enterprises—hampering innovation, delaying implementation of critical projects, and adversely impacting customer service—according to the results of a recent Everest Group survey of global enterprises. Enterprises rank the difficulty of finding, retaining, upskilling and reskilling talent among the three most pressing issues they will face in 2019. Pricing pressures and adapting to shifting business models round out the list.

Everest Group will discuss these insights in a webinar on Thursday, December 13, at 9:00 am CST:Enterprise Key Issues in Global Sourcing: Exposing Disconnects and Unlocking Opportunities.There is no charge to participate.

“At Everest Group, we believe that talent shortages will continue to become more chronic as demographics and policies combine to exasperate available labor challenges, particularly in the U.S. and Europe,” said Michel Janssen, chief research guru for Everest Group. “Organizations will be forced to use automation technologies of all kinds to make their existing workforce more productive.”

Despite the challenges enterprises face, the majority of respondents to the Everest Group survey (51 percent) viewed 2018 as a great year, and 84 percent expect growth in 2019.

In the webinar, Everest Group experts will address the following topics:

  • Talent challenges – finding, retaining, upskilling and reskilling – are having a real, negative business impact and lead the list of enterprise key issues for 2019.
  • The role of the chief digital officer continues to expand. Study participants from both the enterprise and service provider viewpoints reported significantly increased decision making capacity and budgets going into 2019.
  • In a recent survey, service providers indicated their top technology investments are robotic process automation (RPA) and artificial intelligence (AI)/cognitive computing; however, those don’t match enterprises’ top investment priorities, which comprise cloud solutions, automation and big data analytics. Everest Group experts will discuss the mismatch and what it means.
  • While cost reduction remains a high priority when outsourcing, it’s not in the top two value propositions among survey respondents.

***Register for Complimentary Webinar here***

Significant Outsourcing Demand Growth According to Everest Group Report on Top Q3 Trends in Global Sourcing | Press Release

By | Press Releases

Digital services continued to dominate outsourcing activity, driven by cloud-based deals

The global sourcing industry posted healthy numbers for Q3 2018, marked by notable increases in outsourcing demand, according to Everest Group. The total contract value of outsourcing transactions rose 11 percent from Q2 to Q3.

Digital services continued to dominate the outsourcing activity, driven by cloud-based deals. Among GIC setups, the share of digital services as compared to traditional services increased from 44 percent in Q2 to 56 percent in Q3. Likewise, a focus on digital continued to dominate both service providers’ acquisitions (73 percent) and partnerships (84 percent) landscape. Both enterprises and service providers are increasingly leveraging disruptive technologies such as artificial intelligence (AI) and machine learning (ML) to build more a strategic digital agenda, drive innovation and focus on value-added services.

Everest Group discusses these and other third-quarter developments in the sourcing industry in its recently released Market Vista™: Q4 2018 report. The quarterly report highlights the trends in the fast-evolving global sourcing market, exploring the key developments across outsourcing transactions and Global In-house Centers (GICs), as well as location risks and opportunities, and service provider developments.

“The global services industry has enjoyed three consecutive quarters of growth in 2018,” said Salil Dani, vice president at Everest Group. “In Q3, transaction activity rose, and the volume of new contracts increased significantly. Although Q3 did see a decline in GIC market activity in comparison to Q2, we continue to expect healthy growth of the overall global services market through the remainder of the year.”

Additional highlights from the Market Vista: Q4 2018 report:

  • North America reported a significant increase in transaction activity, especially in the retail and consumer packaged goods segment and the technology and communication vertical.
  • GIC activity continues to be driven by existing adopters, with focus on establishing R&D centers for next-generation technologies.
  • While there was a decline in activity for Europe, emerging locations such as Bulgaria and Czech Republic witnessed an increase in activity given high-skilled IT talent, favorable business environment, and excellent R&D and digital infrastructure.

***Download a complimentary 16-page abstract of the report findings here.*** (Registration required.)

Investments in Healthcare AI Will Quadruple by 2020, According to Everest Group | Press Release

By | Press Releases

New research predicts US$6 billion investment will drive innovations in patient identity verification, opioid abuse detection and individually tailored healthcare.

Healthcare organizations are pouring billions into embedded AI across the value chain, driving an estimated quadrupling of AI investments in the next three years, according to Everest Group. The firm predicts that healthcare AI investments will grow from US$1.5 billion in 2017 to exceed US$6 billion by 2020, representing a compound annual growth rate of 34 percent.

While AI is a relatively new area in the healthcare space and its adoption is in the nascent stage, digitalization of healthcare is accelerating healthcare enterprises’ interest in AI. AI has the potential to transform healthcare processes and dramatically reduce costs and improve efficiencies.

For example, healthcare payers are leveraging AI for product development, policy servicing, network management and claims management. Examples include:

  • Use of fingerprints, eye texture, voice, hand patterns and facial recognition to reduce the time taken for customer verification
  • Leveraging of machine learning with integrated claims data and analytics to detect opioid use patterns that suggest misuse
  • AI-powered wearable devices and mobile applications to help customers with personalized advice
  • Chatbots and virtual assistants to predict the right answer to standard customer inquiries and assist customers in navigating through the insurance plan selection process.

Currently, the area where payers are adopting AI to the greatest extent is in care management.

Likewise, the highest adoption of AI by healthcare providers is for care and case management. Providers also are employing AI tools to:

  • collaborate more effectively with patients
  • reduce the time required for aggregating, storing, and analyzing patients’ data
  • streamline workflows
  • monitor patients remotely
  • detect diseases faster and more accurately
  • come up with better treatments.

These findings and more are discussed in Everest Group’s recently published report, “Dr. Robot Will See You Now: Unpacking the State of Artificial Intelligence in Healthcare – 2019.” The firm has analyzed the market from the vantage point of 27 leading healthcare enterprises and closely examined the distinctive attributes of the leaders, who are far ahead of the other industry participants in terms of AI capability maturity. The report identifies best practices, illustrates the impact generated, and offers proposed a roadmap for market stakeholders.

***Download a complimentary abstract of this report here. ***

“While healthcare enterprises are still in the nascent stages of AI adoption, the scale of opportunity in AI demands C-level vision,” said Abhishek Singh, vice president of Information Technology Services at Everest Group. “AI presents unique opportunities for healthcare enterprises – allowing them to improve customer experience, achieve operational efficiency, enhance employee productivity, cut costs, accelerate speed-to-market, and develop more personalized products. In the case of the leading healthcare organizations, their CEOs and CIOs are acknowledging the transformative power of AI, rapidly building appropriate AI strategies, and building a robust, overarching business plan to harness its benefits.”

Additional key findings:

  1. Nearly two-thirds of spending on AI in healthcare is driven by North America. The North American market is also expected to be the fastest growing during the next five years, driven by regulatory mandates for use of electronic health records, increasing focus on precision medicine and a strong presence of service providers engaged in developing AI solutions for healthcare.
  2. Around 75 percent of all AI initiatives in healthcare are still driven by large enterprises as most mid- and small-sized firms are taking a wait-and-see approach.
  3. With a boom in enterprise AI, talent scarcity has become one of the biggest leadership challenges in implementing and evolving AI capabilities.
  4. Application of machine learning (ML) for structured data and natural language processing (NLP) for unstructured information have become mainstream in the healthcare industry.
  5. Cognitive technologies are expected to play an important part in health plans’ technology strategies going forward. Also, providers are looking to increasingly leverage deep learning to explore more complex, non-linear patterns in data, such as that found in research papers, doctors’ notes, textbooks, clinical reports, health histories, X-rays and CT and MRI scans.

Multi-Country Payroll Outsourcing Set to Continue Riding a 20% Growth Wave According to Everest Group | Press Release

By | Press Releases

Providers invest in AI, RPA and other next-gen digital solutions to improve employee experience with payroll systems.

The Multi-Country Payroll Outsourcing (MCPO) market —one of the fastest growing markets in the human resources (HR) outsourcing space— is set to continue riding a multi-year growth wave of 20 percent, according to Everest Group. This momentum is fueled by the rising appreciation enterprises have for the MCPO value proposition as well as increasing provider maturity.

Although MCPO service providers have performed well with respect to the traditional drivers (cost reduction, process standardization and compliance), buyers expect more in terms of next-generation technologies and strategic support. In fact, drivers for MCPO adoption are slowly shifting from the traditional to next-generation ones, which include factors such as better employee experience, better insights through analytics, and access to next-generation digital solutions such as artificial intelligence (AI) and robotic process automation (RPA).

“The shift we’re seeing in MCPO adoption is from an arbitrage-first to a digital-first play,” said Anil Vijayan, practice director at Everest Group. “This is creating a significant challenge for providers, because although most buyers express fairly high satisfaction levels with the ability of their providers to deliver on the traditional metrics, buyers are expressing a fairly low satisfaction level with providers with respect to next-generation metrics. Providers need to address this gap between expectations and perceived performance.”

The leading players in the MCPO landscape—namely ADP, NGA Human Resources, and TMF Group—have done just that; they have constantly innovated and invested in developing technological capabilities to differentiate themselves from others in the market.

One growing area of technology investment is employee experience solutions, where next-generation technologies are being used to enhance both employee empowerment and employee engagement. For example, greater empowerment  can be achieved through advanced employee self-service portals, omnichannel experiences, and investments that enable rapid response and accuracy. Employee engagement  can be enhanced through HR systems that are easy to use, provide a consistent experience across sub-processes, have an intuitive look and feel, and offer employees a personalized experience, including multi-lingual support.

Everest Group explores these findings and others in a recently published report: “Multi-Country Payroll Outsourcing (MCPO) – Annual Report 2019 – Persistent Growth Amidst Evolving Propositions.” This research provides a comprehensive analysis of the global MCPO market across various dimensions such as market overview and key market trends, buyer adoption and solution trends, and service provider landscape.

Additional key findings in this report include:

  • Buyers headquartered in North America and Europe, the two most mature markets, are the leading adopters of MCPO globally. Rising adoption is seen from the emerging markets of Asia Pacific and Latin America.
  • The market has witnessed strong adoption by small-sized multinational corporations (MNCs), which are spread across two to five countries. The large market segment also has witnessed a resurgence of activity, with many large enterprises venturing into large multi-continent deals.
  • The small market segment witnessed a dip in the average deal size, while the mid- to large-sized segments witnessed a significant increase due to a rise in large multi-country deals.
  • ADP, NGA Human Resources and TMF Group dominate the MCPO market in terms of market revenue. The three companies cumulatively constitute over 50 percent of the total market revenue.

Analytics—Bedrock of Procurement Outsourcing—is Driving Sustained Double-digit Industry Segment Growth, According to Everest Group | Press Release

By | Press Releases

Analytics, artificial intelligence and robotic process automation see strong adoption as CPOs demand digital-first procurement ecosystem.

The role of chief procurement officer (CPO) has expanded beyond driving down the overall spend and operating costs to delivering greater strategic value to the enterprise, leveraging both technological solutions and supplier-enabled innovation, according to new research from Everest Group.

This imperative is further reflected in the demand for a digital-first procurement ecosystem, which centers on the power of digital tools such as analytics, robotic process automation (RPA), artificial intelligence (AI), the Internet of Things (IoT) and blockchain.

Everest Group reports that analytics, in particular, has become the bedrock of procurement outsourcing.

“Analytics is changing the way that sourcing and procurement happens,” said Rajesh Ranjan, partner, Business Process Services, at Everest Group. “Analytics is now at the heart of procurement decisions, particularly with respect to spend management, vendor management and even procurement operations. We’re also beginning to see integration of IoT and AI with analytics. For example, AI is being used to enable faster contract analysis, fraud and duplicate payment prevention and conversational support. IoT is being used in a variety of ways as well, such as automating order placement and improving traceability in the supply chain. A few visionary enterprises see this as a strategic area for internal development, but the majority of enterprises are looking to service providers to deploy these solutions.”

As a result, the global multi-process PO market is expected to witness a growth of 11-12 percent in the next three years to reach US$3.6 billion in size by 2020. Technologies such as AI and analytics will witness increasing adoption over the next two to three years. RPA also will witness strong adoption, especially in the procure-to-pay (P2P) process. IoT and blockchain are in the early stages of adoption.

 These results and other findings are explored in a recently published Everest Group report: “Procurement Outsourcing (PO) Annual Report 2018: Driving Strategic Value from Procurement.” The report provides comprehensive coverage of the global PO market including detailed analysis of market size and growth, buyer adoption trends, key emerging themes, solution characteristics and service provider landscape.

Other key findings:

  • North America continues to lead the PO global market. Increased scope of deals in Rest of Europe and United Kingdom led to high growth in these regions. APAC grew slightly above market rate while Latin America grew at a very high rate.
  • Two sectors—manufacturing as well as consumer product goods (CPG) & retail—the leading adopters of PO, witnessed flat growth in 2017. In contrast, emerging buyer segments—including financial services, healthcare and pharmaceuticals, and media—were the high growth drivers for the last two years.
  • The degree of onshoring in PO contracts is increasing, as buyers are expanding the scope of work to include more sourcing processes that require significant onshore presence.

 ***Download a complimentary report abstract here.***

Enterprise Adoption of Digital Customer Experience (CX) Capabilities Soars, Expected to Grow at 25% CAGR—Everest Group | Press Release

By | Press Releases

Demand for CX services is disrupting the Contact Center Outsourcing market, pitting traditional models based on labor arbitrage and scale with digital-first strategies.

Customer experience (CX) is king, dominating the strategic focus of a growing number of enterprises seeking to build a loyal customer base. These enterprises are taking a digital-first approach, aggressively shopping for service providers with next-generation, digital capabilities that can help them gain in-depth customer understanding, deliver personalized CX and establish highly qualified talent pools for managing CX. According to new research from Everest Group, digital CX, which currently represents 4-6 percent of the overall contact center outsourcing (CCO) market, is expected to grow at a compound annual growth rate of 20-25 percent for the next five years.

“Traditional CCO approaches are rapidly evolving to those focused on delivering customer experience services,” said Skand Bhargava, practice director of Business Process Services at Everest Group. “In fact, the digital outsourcing drivers for enterprises—such as CX consulting, omnichannel platforms and digital capabilities such as automation and analytics solutions—are increasingly becoming more important than in the past. Enterprise buyers expect their service providers to be customer-centric and to provide innovative solutions that can help them meet and exceed the expectations of digital-native customers.”

These findings and more are discussed in “Contact Center Outsourcing Annual Report 2018 – Transforming Customer Experience Through a Digital-First Approach.” This report provides an overview of the CCO market, evolving buyer expectations, market size, adoption trends, key solution characteristics, and the outlook for 2018-2019.

Other key findings:

  • The global contact center spend stands at US$320-350 billion, of which third-party outsourcing accounts for approximately 26 percent. The global CCO market grew at approximately 4 percent in 2017 to reach US$81-83 billion, driven by the growing interest among new buyers for outsourcing and the emerging growth avenues for service providers around consulting and digital CX solutions. The CCO market is expected to grow further at a rate of 4-5 percent to reach US$91-93 billion by 2020.
  • The adoption of chat and social media has increased significantly over the past two years, compared to email and voice; chat has become the most preferred channel among millennials.
  • Robotic process automation (RPA) and rule-based chatbots are increasingly adopted across multiple use cases in contact centers to solve key business problems such as longer average handle time (AHT), average waiting times, and navigating through multiple systems and applications. Artificial intelligence (AI) is largely leveraged to unlock customer insights, predict customer actions, and make personalized recommendations.
  • The operational analytics solutions such as desktop analytics and agent performance analytics have witnessed high adoption in contact centers. The adoption of business analytics solutions that include customer analytics, sentiment analytics, and Voice of Customer Analytics (VoCA) is expected to increase over the next few years.
  • The delivery model for customer service management (CXM) services is evolving with a balanced mix of onshore, offshore, and nearshore agents, augmented with the Work-at-Home Agent (WAHA) model and next-generation technology solutions. The WAHA model continues to grow in CXM services, with around 93 percent of the total WAHA agents based out of the United States.

Sarah Burnett, Service Optimization Technology and RPA Expert, Promoted to Executive VP of Everest Group | Press Release

By | Press Releases

SOT business doubles under Burnett’s leadership, delivering strategies for deployment of disruptive technologies such as RPA, analytics, AI in the global services industry

Sarah Burnett—who has been named one of 50 most influential women in UK IT by Computer Weekly in 2016, 2017 and 2018; was shortlisted for AI-leader of the year by Information Age in 2018; and was deemed an outsourcing A-lister by the Global Sourcing Association in 2016/2017—has been elevated to the position of executive vice president and distinguished analyst at Everest Group, the global sourcing research and advisory firm where she has served as vice president for the past 4 years.

Burnett, a well-known industry analyst and market influencer, now leads the firm’s Service Optimization Technologies (SOT) research program globally. As part of this role, she researches and advises clients on automation technologies, such as Robotic Process Automation (RPA), Artificial Intelligence (AI), and global service providers’ capabilities in the field. Based in London, she also serves European clients across Everest Group’s research areas.

In the past six months alone, Everest Group’s team of analysts devoted to the SOT practice has doubled and has presented their expertise and findings at more than 20 events around the world. In addition, the team has published a dozen reports including technology assessments, best practice guides, and market analyses, such as the recently released RPA Technology Vendor Landscape with Products PEAK Matrix™ Assessment 2018. Coverage of these disruptive technologies and related technologies will continue to expand as more team members join in the coming months.

“Everest Group is extremely fortunate to have Sarah Burnett at the helm of one of our fastest growing research and advisory areas,” said Eric Simonson, managing partner at Everest Group. “Her expertise in automation is recognized and valued around the globe, and under her leadership, our firm has established a preeminent reputation in the field based on the quality of our research, the impact of our thought leadership, and the caliber of clients we serve.”

Chief Digital Officers Influencing More Outsourcing Spending Decisions, Becoming a Priority C-Level Exec Buying Center —Everest Group Research | Press Release

By | Press Releases

New survey also explores how service providers feel about their future paycheck, what keeps them awake at night, and what investments actually pay off in creating client value

Service providers in the outsourcing industry say enterprise CIOs, COOs and CFOs may still control the largest budget centers for sourcing services, but their influence on future deals is slipping in favor of the chief digital officer (CDO), according to new research conducted by Everest Group.

In a recent survey of leading global sourcing service providers, 55 percent said they believe the CDO’s domain is the fastest-growing budget center for outsourcing services. Respondents indicated they believe CDOs are becoming an influential C-suite executive in future outsourcing initiatives.

“Service providers are perceiving a significant shift in who most influences outsourcing deals within the enterprise,” said Michel Janssen, chief research guru at Everest Group. “As enterprises implement more and more digital initiatives through their sourcing agreements, these deals are increasingly being directed from a more firm-wide strategic or business unit perspective within the enterprise, namely in the purview of the chief digital officer.

“The CDO is focused on the transformation story, the improvement of processes from end to end, and how to best position the company to compete in a rapidly evolving marketplace, rather than being focused on deploying technology for technologies’ sake,” added Janssen. “This shift in influence to a CDO-controlled buying center bodes well not only for enterprise transformation initiatives but also for service providers who are positioning themselves as valued partners in the transformation process.”

The Everest Group survey also revealed how service providers feel about their future paycheck, what keeps them awake at night, and what investments they believe actually pay off with respect to creating client value.

  • Industry optimism is high…and rising. Employees of service providers are optimistic and excited about their bonus potential. While 2017 delivered mid-single-digit results for revenue growth, 72 percent of service provider respondents are confident that revenue growth will be significantly higher in 2018 and 2019.
  • Enterprise automation in all forms is red hot. Service providers are investing their money in enterprise automation, seen as the next best value proposition beyond labor arbitrage to respond to ever-present demands for productivity and cost reduction. Forty-nine percent of survey respondents are investing in robotic process automation (RPA) and 66 percent are investing in artificial intelligence (AI) and cognitive computing, because they believe these areas have the highest potential for client value creation. Interestingly, only 14 percent are investing in blockchain and 27 percent in Internet of Things (IoT), both of which ranked low on perceived client value creation.
  • The issues that most frequently cause service providers to lose sleep at night are pricing pressures (cited by 41 percent of respondents) and adapting to new business models (a concern of 40 percent). The shortage of talent was mentioned by 38 percent of respondents and is seen both as a challenge and an opportunity to provide value. A shortage of next-generation skills is a particularly troubling challenge, with 71 percent of service providers declaring it their most important talent issue. In contrast, few service providers (19 percent) are worried about regulations in key markets, and only 8 percent are anxious about finding capital.
  • Reducing costs will never go out of style, but availability of skilled talent is becoming a key driver of sourcing deals. Fifty-nine percent of service providers say that cost drives winning value propositions more than any other factor and always will. However, service providers also believe the shortage of talent (cited by 56 percent) and the need to execute more quickly (mentioned by 57 percent) comprise value propositions that win deals. Notably, bringing jobs back onshore or avoiding capital investments are value propositions that are perceived to have little to no traction with enterprise clients, mentioned by only 13 percent and 27 percent of service provider respondents respectively.

**Watch the Webinar Replay***

Everest Group held a webinar on Wednesday, August 29, in which these findings were discussed. During this complimentary, 60-minute webinar—“Service Provider Vantage Point, Plus Q3 2018 Market Vista™ Briefing”—Everest Group presenters also reviewed the results of its recently published report,  “Market Vista: Q3 2018.” Watch the webinar replay and download the complimentary webinar deck here.

The Sourcing Market is on the Up and Up: Everest Group Reports Rise in Global Outsourcing Demand, GIC Activity and Service Provider Revenues in Q2 2018 | Press Release

By | Press Releases

Sourcing center setups at all-time high in Q2, driven by increased location activity in Nearshore Europe, Middle East

The global sourcing industry experienced a lucrative Q2 2018, marking notable rises in outsourcing demand, setups of global in-house centers (GICs) and service provider revenues compared to Q1, according to Everest Group. In addition, Everest Group reports that overall location activity was at an all-time high (87 setups of delivery centers by GICs and service providers during the quarter) due to significant increases in Central and Eastern Europe (CEE) and the Middle East.

Everest Group discusses these and other second-quarter developments in the sourcing industry in its recently released Market Vista™: Q3 2018 report. The quarterly report highlights the trends in the fast-evolving global sourcing market, exploring the key developments across outsourcing transactions and Global In-house Centers (GICs), as well as location risks and opportunities, and service provider developments.

“We’re coming off a great second quarter for the global services industry as a whole,” said Salil Dani, vice president at Everest Group. “For starters, location activity was at an all-time high and transaction activity rose in comparison to Q1. More than two dozen of the world’s leading companies announced plans to expand or set up new centers, which is a strong indication that enterprises anticipate that the market will continue to validate their sourcing strategies in the near future. We expect that this positive momentum will continue through the remainder of the year, which suggests the global sourcing industry will post significantly improved metrics compared to 2017.”

***Register for Complimentary Webinar***

Everest Group will review the findings of the “Market Vista: Q3 2018” report in a webinar to be held on Wednesday, August 29, at 9 am CDT. In addition, Everest Group presenters will address the results of a brief survey the firm recently conducted with leading service providers to gauge their market perspectives for the remainder of 2018 and into 2019. Register here for the complimentary, 60-minute webinar, “Service Provider Vantage Point, Plus Q3 2018 Market Vista™ Briefing.”

Additional highlights from the Market Vista: Q3 2018 report:

  • There was an uptick in outsourcing deals in the Banking, Financial Services and Insurance (BFSI) vertical, driven by U.S. tax reforms. Healthcare outsourcing transactions also surged, driven by declining enterprise margins.
  • Outsourcing activity across North America and Rest of the World (especially Asia, Australia and New Zealand) increased notably over the last quarter.
  • The “Technology and Communication” sector remained the most active and accounted for more than one-third of the total market activity in Q2. The manufacturing sector witnessed an increase, accounting for 25 percent of total setups as compared to 18 percent in the previous quarter.
  • Digital services continued to dominate the outsourcing activity relative to pure traditional services, representing 61 percent of transactions compared to 39 percent, respectively. Automation was the most prevalent digital component employed by new or expanded GICs, with deployments in 52 percent of Q2 setups and expansions.
  • Tier-2/3 locations in the U.S. witnessed significant growth in new center setup activity for both transactional and transformational work, driven by low-cost skilled talent availability.
  • CEE accounted for more than one-third of the total GIC setups and expansions, with Ireland and Romania remaining the preferred nearshore locations in the region.
  • Middle East and Africa (MEA) gained traction during the quarter, accounting for nearly 10 percent of the total GIC setup and expansion activity. The majority of the centers that opened in this quarter in this region support R&D/engineering functions of the parent company.
  • Both global and offshore-heritage service providers saw an increase in revenue and operating margin.
  • Service providers point to a gap in digital skills as a key growth challenge and are utilizing multiple approaches, including alliances and acquisitions, and exploring talent models to mitigate risk.

***Download a complimentary 14-page abstract of the report findings here.*** (Registration required.)

Next-Gen Solutions Add Fuel to Fire of Blazing Recruitment Process Outsourcing Market—Everest Group | Press Release

By | Press Releases

As enterprises face unprecedented talent acquisition challenges, recruitment process outsourcing soars as one of the fastest growing outsourcing markets in the world, growing at 15% for the past three years

The Recruitment Process Outsourcing (RPO) market is one of the fastest growing outsourcing segments today, with growth hovering above 15 percent consistently for the past three years, according to Everest Group. Although the solutions applied in RPO have been slowly evolving for nearly two decades, the adoption of next-generation technologies is expected to surge and significantly alter the RPO market landscape in the near future, adding fuel to the fire of an already blazing RPO market.

Enterprises today are facing unprecedented challenges in talent acquisition, suffering from significant pain points such as forecasting workforce requirements, adapting to the changing nature of the candidate base, developing effective branding, and responding to rapid development in technology. According to Everest Group, RPO service providers are seizing this golden opportunity to help enterprises meet recruitment challenges with next-gen technologies like advanced analytics, benchmarking and workforce planning.

Evolving use cases of digital technologies in talent acquisition include the following:

  • Analytics: Use cases include spend analytics, supplier analytics, workforce analytics, peer benchmarking, and social media analytics to source, screen and engage candidates
  • Natural Language Processing (NLP): Chatbots can leverage NLP to improve candidate experience by engaging with candidates right from the sourcing and screening phases all the way to the interview scheduling and onboarding stages.
  • RPA: RPA can be used to parse key words in resume screening; automate job postings in job portals, banner advertisements and direct emails; and update all instances of workflow when a change is needed.
  • Machine Learning (ML): ML can be used to conduct first-level screening, including checking the relevance and quality of experience and the cultural fit of the candidate. ML also assists analytics applications with identifying and leveraging the most suitable sourcing channels.

“The technology in the RPO market to date has been largely focused on improving the efficiency of specific talent acquisition processes and has been limited to dealing with structured data,” said Vishal Gupta, practice director at Everest Group. “Going forward, we’ll see next-generation technologies such as RPA, analytics and AI that can deal with unstructured data and deliver insights and probabilistic solutions. The impetus to be on the front edge of this wave is driving significant technology investment on the part of RPO service providers. We’re also seeing more and more service providers embracing the RPO+ value proposition, offering value-added services such as employer branding, talent communities, and talent consulting services. These capabilities will become important differentiators in a fiercely competitive market where more than 700 deals are up for renewal in the next three years.”

These and other research findings are explored in a recently published Everest Group report: “Recruitment Process Outsourcing (RPO) Annual Report 2018: Orchestrating the Digital Talent Acquisition Symphony.” This research provides a comprehensive coverage of the market across dimensions such as evolving RPO value proposition, market overview, key trends, solution characteristics, buyer adoption trends, and digital in talent acquisition.

Other key findings of the report:

  • The RPO market touched the US$3.3 billion mark in annualized contract value in 2017.
  • As the RPO model gains maturity, the marketplace is witnessing the entry of hither-to unknown buyers. Industries such as retail, healthcare and pharmaceuticals, as well as small-sized buyers (less than 3,000 FTEs) are entering the market in increasing numbers, leading to new avenues for service providers to tap.
  • Total Talent Acquisition (TTA) is increasingly getting a prominent place in the discussion around the talent needs of enterprises. While still in its early stages, service providers would do well to develop TTA capabilities with an eye to the future.
  • North America continues to occupy the lion’s share of the market with the UK and Australia being the other major markets. Continental Europe and Asia Pacific are emerging markets with good potential for the future.
  • The competition in RPO remains intense, with not many players having a dominant market share, both in terms of number of deals as well as hires. With a large number of deals coming up for renewal in the next three years, service providers will have to be on their toes to maintain their market share as competition intensifies.

***Download a complimentary 10-page abstract of the report here.***