Talent market transitions are pushing RPO engagements to encompass new services, technologies, and recruitment models.

By Michael Switow

Recruitment process outsourcing (RPO) is undergoing a transition in the Asia-Pacific region. Automation, corporate restructuring, and changes in the nature of the workforce are pressuring RPO partners to evolve in order to compete and remain relevant for their clients.

Just what is the next generation of RPO and how are companies changing?

Industry insiders argue that RPO partners need to get in front of technological change whilst offering more services. There are five trends that HR needs to know about in order to to stay ahead of the curve.

1. Expanded offerings. “Process excellence, efficiency, scalability, and cost-savings are just ‘table stakes’ now,” Alfonso Nunez, the managing director for business development and client solutions at Allegis Global Solutions, told a seminar of industry professionals in Hong Kong.

“They’re not really enough to differentiate us from any of our competitors.” He says as the market has matured, the traditional drivers of RPO are often no longer enough to persuade organisations to enter an engagement.

“Clients are demanding better quality talent faster and at less cost. At the same time, we’ve got candidates who are more globally mobile, more educated about their options, and probably more demanding,” explains Hudson RPO’s Asia Pacific Chief Executive Officer Kimberley Hubble, an industry veteran with more than two decades of experience.

And the nature of the workforce is changing as talent fluidly shifts between full-time and other types of work, further complicating the recruitment landscape. As a result, APAC’s RPO partners are broadening the scope of their services.

“RPO companies are increasingly being asked to manage not just permanent and fixed contract hiring, but all parts of hiring, including internal movements, external hires, graduate hires, intern and apprentice hires, as well as the temporary and contingent labour force,” Hubble says.

2. Integration. To offer these additional services, some RPO partners are leveraging their client bases and industry knowledge. At Hudson, RPO and managed service programmes (MSPs) have been combined into one function. At Cielo, it’s RPO and executive search.

“RPO by definition requires you to have a very deep understanding of the business, so by virtue of that deep understanding, you can apply that into an executive recruiting environment and provide good returns more effectively than a one-off search firm,” argues Cielo APAC Vice President Kumar Bhaya.

“Increasingly, these divisions are being managed together,” Hubble agrees. “It allows us to provide more integrated solutions for our customers. It’s not so much a niche service, but seeing how those two services can come together for the benefit of the client.”

3. Customisation. “When RPO started off, the focus was on filling high-volume, mass, repeatable roles—perhaps 300 to 500 hires in just two to three skill categories. That has completely changed. The kinds of roles organisations want to fill now are not as homogeneous as they used to be,” observes Bhaya. He notes that this change has accelerated in southeast Asia over the past three to four years.

Take a life sciences company, for example. When launching a new drug, it would traditionally engage an RPO partner to ramp up its sales force, hiring hundreds of sales representatives in each market. Similarly, it might turn to an RPO company to consolidate its back-office functions in a large offshore delivery centre located in a low-cost market like Manila. Today, though, Bhaya says a life sciences client is just as likely to seek help filling more diverse positions like medical liaison officers, regulatory affairs experts, and health professionals.

The implication is substantial. “Earlier, you could do a simple short listing of candidates for roles that were in a few markets. Now, you have to do short listing of many roles over a larger number of markets,” Bhaya explains. In addition, solutions more often need to be tailored to each client.

“Gone are the days when the only option an RPO company could provide is the outsourced model where we do everything,” agrees Hubble. “I think RPO partners have to be more flexible and actually listen to what the client’s pain points are. What is that client trying to solve? Then, be creative about the solution that would best meet that customer’s requirement.”

4. Automation and innovation. Technological change is pushing RPO partners to expand their services. “RPO companies have to be one step ahead of the client,” observes Hubble. “If the client is innovating at a faster rate than the RPO partner, then how is that partner truly going to add value? We have to do things better than the client can do them.”

Some RPO partners now dedicate resources to testing new software applications so they can better advise clients. “We were basically confused by the huge plethora of choice around technology products,” says Alexander Mann Solutions’ Regional Head of APAC Neil Jones. “I realised that as the managing director, I don’t need to know every product because what’s good today will probably be out-of-date in two to three months’ time anyway. So we developed a partner ecosystem. We have a team that looks at four digital platforms every week. They try, test, check for implementation, and test for security. On top of that, we categorise them into different areas of the recruitment process.”

Meanwhile, Guidant Global is hiring subject matter experts—people with skills outside the realm of traditional RPO in areas like data analytics and employer branding—so that it can expand its offerings. The company is driven by a belief that technological innovation necessitates new business models.

“The core functions that almost every RPO carries out are just getting completely automated,” argues Guidant Global’s APAC Director Doug Edmonds. “Without spending a lot of money, you can easily automate everything from sourcing to onboarding and everything in between.” Small- to medium-sized enterprises are transitioning the fastest, he says, whilst larger multinationals will follow suit.

5. Buyer sophistication. All the whilst, buyers are becoming more knowledgeable. “Today, we’re finding a lot more clients with very sophisticated people in talent acquisition who really know their stuff,” says Hubble. “They’re thinking more creatively about the talent acquisition process and they expect RPOs to do likewise.”

But the increased awareness of RPO services has an upside as well. More companies are approaching partners first rather than waiting to receive a sales call. “Over the past 12 to 18 months, we’ve seen the highest-ever number of requests for proposal coming from multinationals that are looking for a multi-region or global RPO solution,” says Bhaya. “Until a couple years ago, I’d say about a quarter of our opportunities came from organisations that knew what they wanted and invited proposals. Today, it’s up to 50 per cent.”