Career Transition Services Provider
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Career Transition Services
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Employers are battling economic uncertainty but still struggle to source much-needed skills. In such a volatile jobs market, what role does recruitment process outsourcing have in workforce planning and hiring strategies? Jo Faragher investigates.
Traditionally, the drivers for outsourcing have been around cost savings and support with volume recruitment. But while saving money remains important, there’s a lot more focus now on candidate quality and experience, according to industry analysts Everest Group.
“For those who have not adopted RPO before cost is an important driver. Apart from that, it’s about scalability and adaptability. It means they can add to employee base or reduce more flexibly,” explains Vishal Gupta, practice director of Everest’s business process services division.
An increasingly holistic approach to talent management is leading to adoption of a blended (contingent + permanent) talent acquisition model
RPO providers seek more value from technology; industry leaders moving beyond efficiency solutions to advanced analytics and next-gen digital tools to enhance candidate experience
The global Recruitment Process Outsourcing (RPO) market continued to remain one of the fastest growing single-process Human Resources Outsourcing (HRO) markets in 2016, growing at a rate of 16 percent to reach a cumulative market size of US$2.85 billion, according to Everest Group. In 2016, RPO saw wider acceptance among companies of all sizes, including small (less than 3,000 FTEs) and mid-sized (3,000-15,000 FTEs) buyers, which captured an increased share of the market at 51 and 6 percent, respectively, as compared to large buyers at 43 percent.
Digital adoption is the trend most strongly attributing to this rapid growth. RPO service providers are increasingly differentiating themselves through technology, increasing their investments in both technology partnerships and proprietary solutions. The exact nature of the “partner+build” strategy adopted by each provider is dictated by the regional availability and quality of off-the-shelf talent acquisition tools. Annual technology investments vary considerably among providers, ranging from $1 million to in excess of $100 million.
Efficiency focused technology solutions such as Applicant Tracking Systems (ATSs), Customer Relationship Management (CRM) tools, and Robotic Process Automation (RPA) systems are readily available through technology partners and have essentially become “table stakes” in the industry. In fact, nearly half of all RPO engagements include provision of ATS solutions.
So, now, the focus for differentiation has shifted to technology solutions that either enhance the experience of candidates or generate better insights on various aspects of the recruitment value chain. Accordingly, RPO service providers are adjusting their “partner+build” strategies to rapidly assimilate into their service portfolios additional technology solutions such as self-service scheduling tools and chatbots (primarily acquired through partnerships) and advanced analytics (primarily developed through proprietary investments).
“The RPO service provider landscape is intensely competitive, with many players and very few with dominant market share; plus, the high growth in the global RPO market, combined with increasing adoption in emerging economies, is attracting even more new players,” said Arkadev Basak, practice director, Business Process Services, at Everest Group. “In the coming year, technology orientation will be one of the key parameters by which RPO service providers will distinguish themselves in this fragmented market. Other key differentiators will be geographic focus; consulting capabilities, particularly with respect to strategic workforce planning and talent management; and Total Talent Acquisition capabilities.”
These and other research findings are explored in a recently published Everest Group report: Recruitment Process Outsourcing (RPO) Annual Report 2017 – Strategic Value Creation in a Rapidly Evolving Market.
This research provides comprehensive coverage of the RPO market and analyzes it across various dimensions such as market overview, key business drivers, buyer adoption trends, solution and transaction trends, and service provider landscape.
***Download complimentary report abstract here***
Other key findings:
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 economic downturn following the financial crisis of 2008 forced companies to look at their internal costs and find ways to rationalize spend on various business activities. Recruitment was quickly identified as an area ripe for significant cost cutting, and in subsequent years Recruitment Process Outsourcing (RPO) was widely adopted by enterprises.
While cost reduction had long been RPO buyers’ main aim, in recent years they’ve been facing another set of problems – talent shortage and hard to fill roles.
Employers are always on the lookout for better candidates with niche capabilities. However, these desirable employees can be hard to find, especially in a timely manner. To fulfill their hiring requirements, many employers hire contract or offshore recruiters. Unfortunately, hiring additional contract recruiters results in additional expenses, and offshoring results in loss of personal touch. And in both cases, the recruiters spend a substantial amount of their time on transactional tasks, rather than on professional recruiting activities.
The answer to this problem is robotic process automation (RPA). RPA is being used to automate a wide variety of repetitive, low touch recruitment-related tasks and processes including data entry and validation, file and data manipulation, multi-format message creation, web scraping, text mining, workflow acceleration, etc. Through RPA, the productivity of the recruitment team can be improved manifold, resulting in better and faster hiring.
Processes where RPA can be leveraged to improve the effectiveness of the recruitment process:
There’s little question that RPA helps reimagine the whole recruitment value chain. RPO providers and buyers that make investments in RPA, and automation in general, thereby enabling their recruiters to handle the professional aspects of recruiting, will differentiate themselves by more quickly and efficiently identifying, securing, and onboarding the most desirable candidates.
For more information on how RPA can improve various recruitment-related processes, please refer to Everest Group’s RPO Annual Report, 2016.
A number of recruitment process outsourcing (RPO) processes are at least somewhat replaceable with robotic process automation (RPA)