Recruitment Process Outsourcing
Recruitment Process Outsourcing
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:
“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:
Are organizations backing away from the traditional three-year RPO format?
If you follow the world of RPO, you may have noticed an interesting trend. According to the Everest Group’s annual report on the industry, the average deal length has been dropping, and for the first time since Recruitment Process Outsourcing emerged as a tool in the talent acquisition leader’s tool belt, it’s approaching just two years. Today buyers seem to be heading away from the traditional three year format.
Trends in the adoption of blended RPO and MSP
Talent acquisition teams across companies and countries have spent decades looking for a utopian talent acquisition solution through which they can find the right talent, at the right time, in the right place, and at the right cost. This rare, elusive combination may just start becoming a reality in 2017, as promising themes from 2016 begin to emerge on the mainstream, and new technologies and ideas surface.
Think about the unification of these, resulting in an ideal world order for talent acquisition teams in which:
Integrating all these scenarios into one single solution offering might feel like fiction, but Everest Group feels it will start manifesting into reality later in the year. Enterprises and providers alike have been using video interviewing, self-scheduling, and background screening tools for quite some time. Other more advanced technologies such as AI, cognitive, predictive analytics, and NLP-enabled tools are evolving fast. And service providers that are the flag bearers of innovation in RPO are already investing in and working on some of these technologies. It will be interesting to see which service provider is able to integrate all these technologies into a one-stop solution, whether through new investments, or through partnerships and acquisitions.
But, one thing is certain: this whole ecosystem is about to be disrupted, to such an extent that we believe that 2017 will probably be remembered as the year in which the concept of technology became deeply entrenched in the talent acquisition function psyche. This will also result in technology slowly becoming an extension of a recruiter’s physical being in the years to come.
For more insight into some of these technologies, please see our reports including Technology in Recruitment Process Outsourcing – Enabling a Paradigm Shift, and Giving Talent Acquisition the “Analytics Nirvana” Edge.
The RPO market continues robust growth
Everest Group’s practice director for business process services, Arkadev Basak, finds that RPO buyers are expecting more proactivity and innovation from service providers. “Providers are responding to this opportunity by developing niche areas of expertise, adding talent advisory capabilities and improving their internal efficiencies by leveraging technology,” he said.