Earlier this week, ADP announced the acquisition of The RightThing, one of the leading providers of Recruitment Process Outsourcing (RPO) services. The RightThing will continue to operate as a separate business unit, The RightThing, an ADP Company. ADP continues investing to bolster its HRO capabilities following the acquisition of Workscape last summer and VirtualEdge, a pure Applicant Tracking System (ATS), in 2006. It remains to be seen what ADP will do with VirtualEdge since The RightThing has its own proprietary ATS, RightThingRecruitTM, that is already fully integrated into its full service offering or available on a standalone basis.
Coming on the heels of Randstad’s announcement in August that it had acquired strategic workforce solutions company SFN Group, including SFN’s RPO provider, SourceRight Solutions, this acquisition continues an ongoing consolidation trend in the RPO market. As demand for RPO services continues to increase, we are sure to see further acquisition activity to leverage regional coverage capabilities and global infrastructures. Expect to see the trend toward formal alliances continue among RPO providers in order to provide solutions to regions they would not otherwise be able to serve on their own.
Acquisitions are commonplace today, especially as providers respond to market demands for global solutions. ADP’s willingness to invest, its global footprint and its strong technology infrastructure should benefit both The RightThing and their clients. Naturally, there will be a transition period as these two companies integrate, but since The RightThing’s management team is expected to remain in place, there seems little downside to their current client base. And ADP’s clients will benefit from an expanding HRO service offering that now includes a full set of RPO services.
What’s next? Likely even more consolidation within the RPO industry and possibly more ADP acquisitions to further diversify beyond their payroll roots.
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