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The recruitment process outsourcing market size is forecast to increase by USD 11.41 billion, at a CAGR of 18.68% between 2023 and 2028. The growth of the market depends on several factors, including cost reduction by streamlining the hiring process, increased use of neo-sourcing, and the emergence of nearshore outsourcing destinations. The market is witnessing notable expansion due to the urgent demand for reducing costs and enhancing operational efficiency in recruitment processes. Through the utilization of Recruitment Process Outsourcing (RPO) services, firms can refine their recruitment approaches and decrease expenses linked with sourcing, screening candidates, and managing offers. This efficient method empowers companies to concentrate on their fundamental business goals while delegating recruitment operations to expert RPO providers. It also includes an in-depth analysis of market trends and analysis, market growth analysis and challenges. Furthermore, the report includes historic market data from 2018 - 2022.
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The market is witnessing rapid growth, driven by the adoption of Artificial Intelligence (AI) and Machine Learning (ML) in ATS (Applicant Tracking System) solutions. Targeting SMEs facing hiring freeze challenges, RPO providers offer tailored solutions aligned with company goals and objectives while mitigating confidential information risks through written agreements. With a focus on cost-effective strategies, RPO caters to diverse HR demands across retail & e-commerce and other industrial sectors, providing off-site services and cloud-based software for candidate sourcing and interview scheduling. As businesses seek scalable services amidst rapid globalization, RPO models adapt, offering function-based and enterprise solutions for high-volume or specialty hiring on national and global levels. Our researchers analyzed the market research and growth data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The market is experiencing significant growth driven by the imperative need for cost reduction and operational efficiency in the hiring process. By leveraging RPO services, organizations can optimize their recruitment strategies and minimize costs associated with sourcing, candidate screening, and offer execution. This streamlined approach allows companies to focus on their core business objectives while entrusting specialized RPO providers with recruitment-related operations.
Moreover, RPO offers scalability and flexibility, enabling businesses to swiftly adjust their hiring needs in response to market fluctuations, such as expansions or downturns. By partnering with RPO firms, companies can efficiently manage fluctuations in personnel requirements without incurring excessive costs associated with hiring freezes or layoffs. Additionally, RPO solutions provide access to skilled personnel and advanced applicant tracking systems, facilitating seamless recruitment processes while mitigating risks and ensuring compliance with regulations like HIPAA and GDPR. As organizations increasingly prioritize cost optimization and operational efficiency, the demand for RPO services is expected to continue growing, driving market expansion in the foreseeable future.
Task-based crowdsourcing is an emerging trend in the market. The gig economy, or task-based crowdsourcing, refers to the labor market in which the focus is on short-term contracts or freelance work rather than permanent jobs. Such jobs are outsourced to an undefined, large group of people. Task-based crowdsourcing focuses on an on-demand talent marketplace that utilizes non-permanent resources for the timely completion of work. This includes freelancing and the active involvement of cloud-based platforms. It has a global talent pool of contractors and freelancers to be engaged with the organizations that require their services.
Furthermore, organizations benefit from the gig economy to a great extent. For instance, in any organization, tasks that are required to be outsourced are given to a specific pool of people with a specific timeframe and budget. When timelines are met, the overhead costs are also reduced. Moreover, since the whole concept is global, boundaries and limitations are also very few, and more productive results are seen. Hence, such factors will boost the global RPO market during the forecast period.
The unstable labor laws and regulations are major challenges impeding market growth. Employers should be aware of the latest regulations, amendments, and changes that can possibly affect the workplace. Such updates and changes include changes in payroll, recruitment, employee benefits, and grievance procedures. Currently, companies in the automotive, IT, energy, retail, telecom, hospitality, and manufacturing sectors are increasingly shifting to the contract-based employment model.
Further, along with this, many government organizations are also releasing contracts for their projects on a short-term basis. In such cases, RPO firms should be aware of all the laws and regulations related to gratuity, bonuses, provident funds, and more. Furthermore, several countries implement new regulations every year, which makes the work of RPO firms tougher. Therefore, such factors will hinder the market growth during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
In the realm of recruitment process outsourcing (RPO), GDPR (General Data Protection Regulation) compliance is paramount, especially for SMEs (Small & Medium Enterprises) lacking HR (Human Resources) resources. RPO suppliers alleviate the nightmare of hiring by managing processes efficiently through written agreement with third party provider. These solutions extend to job posting and managing skilled workers, allowing businesses to focus on core tasks. With the assistance of an RPO provider, companies streamline their resourcing department and leverage the benefits of Business Process Outsourcing (BPO) for optimized recruitment outcomes.
The market share growth by the IT and telecom segment will be significant during the forecast period. The emergence of just-in-time recruitment and the rising adoption of social, mobile, analytics, and cloud (SMAC) are some of the main factors that support the growth of the global market. For instance, Wipro Infotech, along with People Strong, has implemented just-in-time recruitment to optimize resources for increasing competitiveness in tough market conditions. It hired 900 people last year for short-term and fixed-term employment. Such new capabilities in resourcing people have enabled the company to bid for larger projects in its operational regions.
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The IT and telecom segment was valued at USD 1.08 billion in 2018. In just-in-time recruitment, clients' requirements are responded to faster than in the traditional recruiting process. In this process, instead of continuously growing the candidate base with undesired applicants, taps potential candidate inventory through resumes, networks, and social platforms. Lean recruitment, on the other hand, aims at delivering value using fewer resources. Additionally, for the adoption of SMAC in outsourcing, Cognizant developed its own applicant-tracking system. This cloud-based system helps the company identify, manage, and onboard job candidates. Support for multiple languages, improved recruiter productivity, a reduction in operational costs, and the ability to interface with social channels (including job boards, online communities, and executive search firms) are the main benefits of the system. Thus, the introduction of such advanced solutions is expected to fuel the growth of the global RPO market during the forecast period.
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North America is estimated to contribute 38% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
One of the major factors driving the regional market is the continuous increase in the skilled workforce of staffing companies in North America. Another reason for market growth in the region is the rise in the adoption of advanced technologies such as cloud computing, AI, and RPA. Hence, BPO organizations leverage advanced technologies to improve their service offering to customers. Furthermore, vendors in the region are launching technological platforms and forming partnerships to ease business processes, including recruitment. Hence, the increase in the adoption of technologies, innovations in technological platforms, and partnerships across industries are likely to result in decent growth of the market in the region during the forecast period.
Moreover, the increasing use of mobile devices is also positively impacting the market in North America as they have given a new dimension to job searches. Many people in the US use their mobile devices to search and apply for jobs on the go. It is estimated that 1 billion job searches are done from mobile devices each month by people in the US. Additionally, publishing job vacancies and related advertisements in magazines and newspapers is expensive, and online job postings help companies to save a lot of money from that perspective. All these factors are contributing to the regional market growth.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
In today's dynamic business landscape, recruitment process outsourcing (RPO) emerges as a strategic solution for companies of all sizes, including small and medium-sized businesses (SMEs) and large companies. By outsourcing traditional HR tasks and talent acquisition processes, organizations can focus on strategic decision-making processes while minimizing confidential information risks associated with employment contracts and consultancy agreements.
Additionally, RPO providers offer specialized and diversified service offerings tailored to address the human resource concerns of different industries, enabling firms to optimize workforce planning and adapt to technological advancements. From permanent staffing to flexible staffing for temporary and contract positions, RPO streamlines hiring procedures and reduces attrition rates.
Further, utilizing cloud-based services and cutting-edge tools, RPO facilitates onboarding, monitoring, and interviewing, ensuring workplace flexibility and accountability. With a focus on web-based software and geographic regions, RPO models cater to high volume or specialty hiring needs on national and global levels through multi-Country RPOs and offshore support offices.
Market Scope |
|
Report Coverage |
Details |
Page number |
185 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 18.68% |
Market growth 2024-2028 |
USD 11.41 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
15.28 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
North America at 38% |
Key countries |
US, UK, Canada, Australia, and India |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Accenture Plc, Adecco Group AG, Alexander Mann Solutions, Allegis Group, AMN Healthcare Services Inc., Automatic Data Processing Inc., Cielo Inc., Deloitte Touche Tohmatsu Ltd., Hays Plc, Hudson Global Inc., Infosys Ltd., International Business Machines Corp., Kelly Services Inc., Korn Ferry, ManpowerGroup Inc., Orion ICS LLC, PeopleScout Inc., Randstad Sourceright EMEA B.V., TrueBlue Inc., and WilsonHCG |
Market dynamics |
Parent market analysis, Market forecast, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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