The global recruitment process outsourcing market declined in 2020 because of the Covid-19 pandemic. However, expect a rebound this year, according to SIA’s “RPO Global Landscape 2021” report released this week.
The research estimates the global RPO market fell to $5.8 billion in 2020, down 7% from 2019. Still, RPO outperformed the wider global staffing market, which declined by 11% last year. And looking ahead, the RPO market is expected to surpass pre-pandemic levels this year as organizations seek to rebuild talent acquisition capability.
“We anticipate a full recovery to 2019 market levels by the end of 2021 with double-digit growth this year,” wrote SIA’s Global Workforce Solutions Research Manager Matt Norton, the author of the report. “Providers who operate across multiple sectors, and those who offer RPO as part of a broader stable of services, will be better placed to weather the current disruption.”
Some providers launched new services during the pandemic, leveraging existing technology investments to provide remote and automated sourcing, interviewing and onboarding services, predominantly to serve high-volume recruitment requirements in growth sectors such as healthcare and logistics.
“The agility of RPO providers in responding to numerous challenges of the past 18 months has served to underline their importance to client organizations, many of which are realizing they cannot single-handedly navigate the rapidly-evolving talent acquisition trends and ongoing pandemic challenges,” Norton says. “At a time of talent shortages, scalable demand and proliferation of new technology, it may be an appropriate moment to consider using an RPO if they haven’t before.”
Blended RPO/Contingent Workforce Deals
All participants in this study offer contingent workforce solutions — most typically MSP — in addition to RPO. Approximately 21% of the 2020 RPO market (by share of reported contracts) was derived from contracts where the same provider delivers both MSP and contingent workforce services, with 10% of agreements offering a fully blended solution under a single contract.
“We observe an increase in the number of blended RPO/contingent workforce deals, which will create opportunity for providers who are already positioned to offer total workforce solutions,” Norton states.
RPO providers are now providing a broader range of services and solutions beyond simply RPO. Examples of value-added services fueled by the pandemic include consulting; diversity, equity and inclusion initiatives; talent advisory; and advanced data analytics. Case studies in this report include project RPO to meet a specific demand, using RPO services to improve the diversity mix of hires, evolution of a long-term contract through technology transformation, utilizing virtual teams, automation of recruitment programs, and discrete technology consulting services to improve talent pipelining and sourcing capability.
In response to client expectation of greater availability of talent at reduced price points, RPO providers are also accelerating their digitalization and automation initiatives and optimizing their costs and processes.
“While in recent years we have observed adoption of robotic process automation and artificial intelligence within RPO technology solutions among more mature providers, Covid acted as a catalyst for wider adoption, with almost all providers reporting the use of both automation and AI as part of their core RPO solution,” Norton wrote. The most reported use cases are the deployment of conversational AI and chatbots to improve candidate experience and manage queries, the use of machine learning for intelligent profile ranking and matching, and the use of programmatic job advertising to improve candidate marketing return on investment.
The full “RPO Global Landscape 2021” report is available online to SIA’s CW Council members. It is based on a survey of 22 providers regarding their RPO geographic footprint, customer segments, service capabilities and sourcing models. The market size is extrapolated from 2,500 RPO buyer contracts and 1.7 million hires annually across the RPO providers that participated.