Among the drivers for growth in recruitment process outsourcing (RPO) is the increased optimism among organizations to bring on new employees, the broad acceptance of the RPO model and its benefits, the significant interest by the mid-market and the flexible range of buying options, including project-based, on-demand and use of pilots.
After discussions with more than a dozen leading RPO providers, we have found the Top 5 trends driving RPO growth in 2014.
1. Strategies to attract talent reflect a significant competitive opportunity for RPO providers. Providers such as The RightThing, KellyOCG and Seven Step are increasingly focusing their solutions on employment branding or employee value proposition. IBM Kenexa leverages its culture fit assessments to identify unique company branding and use that information to attract talent who will perform well in the client’s environment. RPO providers that provide comprehensive strategies to attract and sell the right candidates on a company as the best place to work will provide important value to clients.
2. Globalizing and centralizing RPO models is critical to growth. Some RPO providers are focusing geographic expansion into new countries opportunistically based on client discussions while others are making proactive investments. Recent acquisitions include PeopleScout’s acquisition of HRX (an RPO provider in Australia and New Zealand) in January 2014 to expand geographic reach and capability. Pinstripe and Ochre House have created a broad global network that now includes executive search capabilities in the Middle East through the introduction of Talent Search Solutions services. Global expansion will be a primary area of investment throughout 2014.
3. Specializing in an industry answers client needs. Some RPO providers, like Pinstripe and Yoh, have long had an industry-centric approach. Several other leading RPOs are more closely aligning their approach to a model with deeper domain experience in key industries (such as retail, healthcare, and financial services). Although leading providers may have a transferable RPO methodology that can be used across industries and position types, many RPO providers are shifting to professional-level hiring for hard-to-fill, specialized roles; the level of industry expertise has become central to demonstrating success and enabling growth.
4. Clients accelerate adoption of talent acquisition technology. More and more clients are adopting use of recruitment marketing platforms, social media, text campaigns, mobile applications, assessments and video interviewing. Technology is increasingly being bundled into RPO engagements, and RPO providers are investing heavily in their own proprietary solutions. In addition to front-end sourcing technology and applicant tracking systems, analytics is becoming an important area of investment. The ability to effectively tie RPO results to business outcomes will be a differentiator in the market.
5. Blended RPO is gaining interest. RPO organizations like KellyOCG and Randstad Sourceright are leveraging their current Managed Service Provider (MSP) and RPO relationships and capabilities in a more integrated way. While blended RPO still has obstacles to overcome, most notably different organizational buyers and a lack of integrated technology, organizations that embrace a holistic view of talent will be able to better align their total workforce needs and capitalize on cost-saving opportunities.
Rapid changes in client needs, service provider capabilities and technological enablement will make 2014 an exciting year in the talent acquisition space.
ISG can help organizations with their talent acquisition/RPO strategy and selection. Please contact us to discuss further.
About the authorStacey is a director and a key contributor to ISG’s human resources and talent-related technology and services. She advises clients on all aspects of human resources engagements, including recruitment process outsourcing and talent management. Stacey is a prolific blogger, and is frequently interviewed by industry publications. With nearly 20 years of experience in solutions strategy, product development, corporate HR, operations delivery, transitions and HR consulting, Stacey has deep operational knowledge of the talent space and her clients’ challenges, as well as a unique ability to ask the right questions to help organizations align their sourcing initiatives with their vision.
About the author
Stacey Cadigan
Stacey Cadigan is an HR thought leader who is passionate about HR and talent management. With more than 20 years in HR, she has leveraged her deep experience and expertise to help clients achieve their strategic, operational, and financial objectives. Through her diverse experience in HR strategy, HRO operations, RPO, HR technology, and transitions, she has developed unique insight and the ability to ask the right questions in assisting organizations with finding solutions to effectively align their HR initiatives with their vision. Stacey was named “HR Thought Leader of the Year” in 2016 and “HRO Superstar” by HRO Today Services and Technology Association for 2016–2019.
