RPO Archives - Page 5 Of 5

The Next Generation | Sherpas in Blue Shirts

January 9, 2013

Talent is clearly the true differentiator in the 21st century. Having the right talent at the right time and in the right place is even more paramount in the current economic situation. However, organizations will need to understand the megatrends impacting the talent market, including the demographic shift, generational differences, globalization, and changing workplace requirements and expectations. Organizations need to align their talent acquisition strategies to remain successful in the long run.

The success of recruitment process outsourcing (RPO) in creating value for buyers is evinced by the rapid growth of this market over the last few years. The RPO market has reached $1.4 billion in annual contract value (ACV) in 2011, and the market is expected to continue on a high-growth trajectory.

RPO has the potential to create value and impact at three levels: cost, business, and strategic. In the early stages of RPO (RPO 1.0), it addressed the cost and the business impact considerations focusing on elements that are low hanging fruits and easy to measure and quantify. The next generation of RPO (RPO 2.0) addresses the cost and business impact on a holistic basis and also starts to create strategic benefits for organizations. It calls for taking a comprehensive approach to talent acquisition—inclusion of internal and external hire management both as well as wide process inclusion—in particular and talent management in general. It requires identifying, impacting, tracking, and measuring more strategic metrics that are business-outcome oriented.

Video: RPO Annual Report – Raising the Bar to Sustain Momentum | Sherpas in Blue Shirts

March 13, 2012

Everest Group released the Recruitment Process Outsourcing (RPO) Annual Report today. In the video below, Rajesh Ranjan, Vice President – BPO Research, talks about the fast-growing RPO market and the challenges the industry needs to address in order to sustain growth.

Did ADP Do the Right Thing with its Acquisition of The RightThing? | Sherpas in Blue Shirts

October 12, 2011

Oh, yes it did. In fact, it scored big in three important areas with its October 10 acquisition of The RightThing, a privately held company and a major player in the fast growing Recruitment Process Outsourcing (RPO) market.

Secured a leading spot within the RPO provider community – ADP already had an RPO technology solution in its Virtual Edge Application Tracking System (ATS). With the addition of The RightThing’s business process services, which well complements ATS, ADP will have a comprehensive, rounded out technology plus services RPO solution. It will also be able to offer a fully bundled, holistic RPO offering that includes its existing talent management products.

Ability to tap new mid-market opportunities – Both companies are already strongholds in the mid-market (ADP in HRO, and The RightThing in RPO); ADP will now be able to cross-sell RPO services to its own HRO clients, and offer HRO services to The RightThing clients.

Good culture and service model philosophy fit – Operationally, ADP and The RightThing both utilize a highly centralized and standardized delivery model to drive economies of scale and offer an efficient solution to clients, so no significant alternation in delivery model philosophy will be required.

Of course, while this is a very strong match-up of capabilities and opportunities, acquisitions always have their challenges. First, both ADP and The RightThing have their own recruitment technology solutions (VirtualEdge and RecruitPoint, respectively), and ADP will need to select one and transition clients from the other. Second, ADP will need to quickly and carefully integrate the two companies to ensure retention of top talent, as well as ultimate acquisition success. Third, successfully capitalizing on cross-sell opportunities within the two companies’ client bases will depend on its ability to clearly demonstrate a solid value proposition backed by integrated service delivery and technology. Fourth, and probably most importantly, will be ADP’s ability to adapt and succeed with its first real foray in a non-platform-based play. The RightThing has several clients that utilize their own technology solutions, and ADP’s strategy to serve these non-platform RPO clients, as well its approach for new clients, will be closely watched. Only time will tell how successful it will be in this major move.

For more details on the acquisition, including its impact on the RPO and MPHRO industries, please read Everest Group’s Breaking Viewpoint on the topic.

Video: Multi-Country RPO Key Findings | Sherpas in Blue Shirts

August 10, 2011

Watch as Sayan Chatterjee, Senior Research Analyst, highlight key findings from the recent report Multi-Country Recruitment Process Outsourcing (RPO): Hype vs. Reality.

Takeaways from My RPO World (okay, on the ground U.S.) Tour | Sherpas in Blue Shirts

June 23, 2011

During the past few weeks, I was on the road interacting and engaging with a variety of buyers, service providers, and technology providers in the Recruitment Process Outsourcing (RPO) ecosystem. My travels took me to the HRO/RPO Summit in Las Vegas, Manpower’s analyst day session in Milwaukee, and meetings with numerous buy- and sell-side organizations in multiple cities.

Broad themes I identified during those forums, meetings and some very stimulating conversations include:

Greater pragmatism on global/multi-country RPO. Notwithstanding the continued interest among multinational companies around global/multi-country RPO, there is an increasing realization that a more practical and pragmatic approach is required. For example:

Buyers are realizing it’s exceptionally important to understand the “art-of-the-possible” in heterogeneous markets such as Europe, Asia Pacific, and Latin America, even before floating an RFP.
Quite often, it makes sense to approach and scope multi-country RPO utilizing the Pareto Principle, i.e., focusing on 80 percent of the hiring that takes places in 20 percent of the operating countries.
A phased approach that starts with limited countries in scope and expands into other countries/regions once the relationship stabilized is increasingly preferable.
A hub-and-spoke delivery model is emerging as the most prudent choice.

High interest in “understanding” a total talent acquisition approach. Note my emphasis on “understanding,” as opposed to adopting. Currently, I see buyers making RPO and Managed Service Provider (MSP) decisions for permanent hire and contingent hire management, respectively, independent of each other. While a combined approach to permanent and contingent hiring management through an integrated solution looks compelling, the reality is there are organizational (e.g., misaligned objectives of HR and procurement), operational (e.g., difference pricing structure and service level considerations), and technological (e.g., lack of single technology solution for permanent and contingent hire management) challenges to adoption in the current market. Buyers must have a clear upfront understanding of these challenges and need to identify potential mitigation steps. I have even seen buyers comfortable with their organizational readiness but lacking confidence in providers’ capabilities to offer an integrated solution at this time.

I expect adoption here to be gradual and in a phased fashion, with buyers starting with either RPO or MSP and then looking to expand and integrate the other. From a service provider perspective, creation and execution of total talent acquisition requires expertise in both traditional RPO and MSP models. That expertise, if proven, can create differentiation and significant opportunities, while also creating a natural entry barrier for competitors that focus only on RPO or MSP.

Side note: Everest Group’s forthcoming RPO studies will focus on multi-country RPO as well as blended RPO (RPO + MSP) exclusively highlighting the current state of the market and various dynamics at play.

Providers’ proactive investments to enhance their value proposition and create differentiation. It is clear that some RPO providers understand the importance of creating differentiation in a cluttered marketplace. Those that do are proactively investing in building their differentiation themes and associated capabilities. Examples include Kenexa’s focus on quality of talent theme, Manpower’s investment in helping buyers better plan their workforce requirements, Pinstripe’s development of tools to enhance the efficiency and effectiveness of the recruitment process, and SourceRight Solutions’ total talent acquisition solution.

Broader opportunities in emerging markets. With the demographic and economic changes taking place around the world, emerging markets such as India, China, and Brazil are increasingly viewed as markets with immense potential extending far beyond low cost delivery. Manpower’s recent acquisition of China-based REACH HR is a prominent example.

While my current tour in-person has concluded, I am looking forward to keeping a close eye on the RPO industry’s journey, even if from a near-term virtual view.

Recruitment Process Annual Report Key Findings | Sherpas in Blue Shirts

January 5, 2011

Watch as Everest Group’s Rajesh Ranjan highlights key findings from our recent RPO Annual Report.

To Thrive in Today’s Hot RPO Market, Harness Momentum but Remain Pragmatic | Sherpas in Blue Shirts

November 23, 2010

Everest Group just concluded one of the industry’s most comprehensive, fact-based studies on the fast evolving global recruitment process outsourcing (RPO) market, RPO Annual Report 2010 – A Year of Rapid Growth and Intense Competition, and the results were loud and clear – the RPO market is booming with new deal signings doubling in 2010 compared to 2009. Clearly, the value proposition of a cost effective, scalable option that helps organizations manage unpredictable hiring requirements is resonating well with buyers. And the future holds more promise as replacement hiring – the current trend – is augmented by net new hiring in an improving economic environment. No wonder that, beyond the existing RPO service provider base, this market continues to attract traditional multi-process HR outsourcing (HRO) service providers, technology vendors, and investors.

However, we also learned from the study that the rapid growth has strained service delivery, in some cases leading to non-renewals or terminations. To ensure that this relatively new market continues to expand and fulfill its value proposition, service providers must incorporate key past learnings and avoid the pitfalls experienced in the high profile, multi-process HRO marketplace.

Not all business is good business. Different buyers seek RPO support for different reasons. Some have a transactional focus, while others are looking for higher value-add in terms of improved process effectiveness and talent quality. Some focus on a specific country, while others require a multi-country solution. These differing requirements clearly call for different sets of capabilities, solutions, and investments. Thus, although it’s tempting to grab any new business opportunity that comes their way, service providers must have a very clear understanding of what they are good at and, more importantly, what they are not. Defining the appropriate target market upfront, based on a clear assessment of their own delivery strategy and capabilities –even at the cost of letting some business go – should be RPO providers’ first step to ensuring satisfied clients and profitable growth.
Creation of a scalable model is vital. The ability to drive economies of scale in operations is a key component of generating value in Business Process Outsourcing. RPO is no exception. This calls for creating a level of standardization across multiple clients leveraging a combination of processes and technologies. While the recruitment process is clearly different from transaction-intensive HR processes such as payroll and benefits administration, the art lies in identifying areas within RPO that should be standardized, versus those that should be differentiated per buyer desires and requirements.
Never underestimate the importance of change management and governance. Effective change management and holistic governance is a prerequisite for successful RPO implementation and subsequent delivery, especially in large and complex enterprise-wide RPO initiatives. Improper and ineffective change management often leads to friction, dissatisfaction, increased time for recruitment, and greater costs for the buyer organization. Service providers must educate and work with their clients to proactively plan for change management, and create a governance structure to ensure its effective implementation. Clearly set expectations, well thought out communications, and required training are some of the mechanisms companies should use to adapt to changes when working with an RPO provider.
Global sourcing is an important value lever. Recruitment has been historically viewed as a high-touch function that requires significant orientation to local cultures, behaviors, business environment, etc. However, there is now greater understanding that the recruitment function consists of two separate components – high-touch front-office processes (e.g., employer branding, sourcing) that require onshore presence, and low-touch back-office processes (e.g., recruitment administration) that can be delivered from offshore locations. A delivery model that encompasses “intelligent shoring” will further enhance service providers’ value proposition.

Yes, it’s a good time to be in the RPO business. And with a dose of pragmatism, RPO providers and buyers will both be well served.

Announcing our inaugural conference: Everest Group Engage, The Pragmatic Edge: Designing Your Future. Learn more.

Tag: RPO