BenefitsEmployee Engagement

Editor’s Note: Witnessing the RPO Baby Grow up

Three years and a bunch of grey hairs later, it’s clear that the best in RPO has yet to come. Here are three big reasons why you may want to stay tuned to market developments ahead.

by Andy Teng

A lot can happen in the span of three years, and in the recruitment process outsourcing (RPO) business, a lot has. It was nearly three years ago when I first joined HRO Today as editor, and I recall many HR organizations then viewing recruitment process outsourcing as a novelty—a yet unproven sourcing approach that was supposed to help companies cut costs, improve time to hire, and generally lift the effectiveness of the recruitment function. Back in 2005, there was much excitement around RPO, as there was around HRO in general. Ah, those where the halcyon days of a new industry.

It’s three years later, and a lot of air has gone out of the end-to-end, enterprise HRO market, but not so in RPO. Even though the competition for talent has cooled a bit since 2005, the interest in outsourced recruitment services has not. In fact, our sources around the industry tell me there’s a flood of prospective buyers issuing requests for proposals to RPO service providers. And even organizations not considering outsourcing recruitment services in the near future can’t ignore the buzz it has generated among HR leaders. That’s because three big trends will keep employers fixed to developments in the RPO industry.

• Scalability. In times like these, being able to quickly scale up or down can make all the difference for a business facing uncertain economic conditions. If your organization’s mandate today is to cut costs of all kinds, why are you still maintaining all those in-house recruiters, especially when hiring is likely to be down for some time? RPO’s ability to help you react to economic conditions is one reason this tower of HRO is getting a second look from many quarters.

• Access to Recruitment Expertise. Are you using generalists to recruit? ‘Fess up—you are, aren’t you? Don’t be embarrassed, a lot of organizations do these days, and the truth is many recruiters fall into these jobs without formal training. RPO providers are the experts in the field and spend enormous efforts to ensure their recruiters are adequately skilled to perform in their jobs. Moreover, they’ve spent countless hours documenting, measuring, and re-measuring their processes so that you, the buyer, get better results.

• Global Build–out.
Admittedly, this is the weakest part of the RPO value proposition today, but the promise of a global network will come to fruition. Whether the market does this through partnerships, acquisitions, or organic growth, you’ll see many of today’s domestic providers become true global players in the near future. A good example of this trend is the recent partnership between CDI and Spherion, in which the two companies will eventually deliver services to the Hertz Corp. throughout the world. In addition, other providers such as Alexander Mann Solutions already services clients in a handful of countries and on a couple of continents. Of course, some businesses have already made acquisitions, including Kenexa’s recent buyout of London-based Quorum.

For these and other reasons, RPO will remain top of mind for many HR leaders as they look for ways to raise the talent levels in their organizations. Even in these difficult economic times, recruitment process outsourcing is still an attractive proposition, which is a testament to the benefits that buyers perceive.

Tags: Benefits, Engaged Workforce, HRO Today Global

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