Recruitment Process Outsourcing Market by End-user, Type, and Geography - Forecast and Analysis 2023-2027

Recruitment Process Outsourcing Market Forecast 2023-2027 

The recruitment process outsourcing market is estimated to increase by USD 7.60 billion and grow at a CAGR of 15.2% between 2022 and 2027. 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.

What will be the size of the Recruitment Process Outsourcing Market During the Forecast Period?

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Segmentation

This market research report extensively covers market segmentation by end-user (IT and telecom, manufacturing, BFSI, healthcare, and others), type (large enterprises and SMEs), and geography (North America, APAC, Europe, Middle East and Africa, and South America). It also includes an in-depth market growth analysis analysis of drivers, market trends, and challenges. Furthermore, the market forecasting report includes historic market data from 2017 to 2021.

By End-user

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 951.75 million in 2017 and continued to grow until 2021. 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. 

By Regions

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North America is estimated to contribute 40% 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.

Market Dynamics and Customer Landscape

The Recruitment Process Outsourcing (RPO) market is witnessing a surge in demand driven by several key factors and emerging trends. Firstly, the increasing adoption of Artificial Intelligence (AI) and Machine Learning (ML) technologies within Applicant Tracking Systems (ATS) is revolutionizing the recruitment landscape. These technologies streamline and automate various aspects of the hiring process, enhancing efficiency and reducing time-to-hire for organizations. Moreover, AI-powered ATS solutions aid in candidate sourcing, screening, and even offer execution, empowering HR departments and RPO providers to identify and engage with top talent more effectively.

Secondly, regulatory compliance, particularly concerning data protection laws such as HIPAA and GDPR, is shaping the RPO market. With stringent regulations in place, especially in sectors like Banking, Financial Services, and Insurance (BFSI), organizations are increasingly turning to RPO providers to ensure compliance throughout the recruitment process. These providers offer expertise in navigating complex legal frameworks, mitigating compliance risks, and safeguarding sensitive candidate information. As regulatory scrutiny intensifies, the demand for RPO services equipped with robust compliance mechanisms is expected to grow further, driving market expansion and diversification.

Our researchers analyzed the data with 2022 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.

Key Market Driver

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.

Significant Market Trend

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. 

Major Market Challenge

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. 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. 

Key Market Customer Landscape

The 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 growth strategies.

Global Market Customer Landscape

Who are the Major Recruitment Process Outsourcing Market Players?

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.

Allegis Group -The company offers solutions for staffing and recruiting talent advisory services, search services, sales and marketing outsourcing, and other workforce management services. The key offerings of the company include recruitment process outsourcing solutions. 

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market players, including:

• Accenture Plc
• Adecco Group AG
• Alexander Mann Solutions
• 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 Global Inc.
• Orion ICS LLC

Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

Segment Overview

The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• End-user Outlook 
  • IT and telecom
  • Manufacturing
  • BFSI
  • Healthcare
  • Others

• Type Outlook
  • Large enterprises
  • SMEs

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

Analyst Overview

In the dynamic landscape of modern business, the imperative need for cost reduction and operational efficiency has become increasingly evident, especially in the realm of recruitment. As organizations strive to streamline their hiring processes while minimizing expenses, the utilization of Recruitment Process Outsourcing (RPO) services has emerged as a strategic solution. RPO services offer a tailored approach to recruitment, allowing companies to optimize their strategies and minimize costs associated with sourcing, candidate screening, and offer execution. By entrusting specialized RPO providers with recruitment-related operations, organizations can focus more effectively on their core business objectives.

The demand for RPO services spans across various industries, including Banking, Financial Services, and Insurance (BFSI), where compliance with regulations such as HIPAA (Health Insurance Portability and Accountability Act) and GDPR (General Data Protection Regulation) is crucial. RPO suppliers equipped with expertise in compliance management can alleviate concerns related to confidentiality and regulatory risks, ensuring a smooth and secure recruitment process. Moreover, RPO services cater to businesses of all sizes, from small and medium-sized enterprises (SMEs) to large corporations. For SMEs, which may lack the resources to maintain an extensive internal recruitment infrastructure, outsourcing recruitment tasks to RPO providers offers a cost-effective solution. Meanwhile, large companies can benefit from the specialized and diversified service offerings provided by RPO suppliers, enabling them to address specific recruitment challenges with precision.

One of the key advantages of RPO services lies in their ability to offer a single solution for various recruitment needs. Whether organizations require permanent staffing, flexible staffing, or assistance with temporary, contract, or on-call positions, RPO providers can adapt their services accordingly. This flexibility allows businesses to scale their recruitment efforts according to fluctuating demands without the constraints of traditional recruiting tactics or reliance on advertising and headhunters. In addition to cost savings and operational efficiency, RPO services support strategic decision-making processes related to talent acquisition and workforce planning. By leveraging the expertise of RPO suppliers, organizations can address human resource concerns more effectively, ensuring that their recruitment strategies align with broader business goals and objectives.

Furthermore, RPO services are well-suited to accommodate the evolving needs of today's workforce. With workplace flexibility becoming increasingly important, especially in light of technological advancements and changing corporate environments, RPO providers can help organizations adapt their recruitment approaches to attract candidates with diverse backgrounds and preferences. This includes considerations such as telephony options, workplace flexibility, and accommodations for individuals with school and family commitments. Despite initial reservations about the perceived "nightmare" of outsourcing recruitment, the benefits of RPO services far outweigh any concerns. With written agreements in place to safeguard confidentiality and mitigate confidential information risks, organizations can confidently engage with RPO providers to address their recruitment needs efficiently and effectively. In conclusion, in a market where efficiency and cost reduction are paramount, RPO services offer a strategic solution for optimizing recruitment processes. By partnering with specialized RPO suppliers, organizations can navigate the complexities of talent acquisition with ease, empowering them to focus on their core business objectives while ensuring a steady influx of skilled workers to drive growth and success.

Recruitment Process Outsourcing Market Scope
Report Coverage	Details
Page number	177
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 15.2%
Market growth 2023-2027	USD 7,600.36 million
Market structure	Fragmented
YoY growth 2022-2023(%)	14.09
Regional analysis	North America, APAC, Europe, Middle East and Africa, and South America
Performing market contribution	North America at 40%
Key countries	US, Canada, Australia, India, and UK
Competitive landscape	Leading Vendors, Market Positioning of Vendors, 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 Global Inc., Orion ICS LLC, PeopleScout Inc., Randstad Sourceright EMEA B.V., TrueBlue Inc., and WilsonHCG
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the 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.

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What are the Key Data Covered in this Recruitment Process Outsourcing Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the recruitment process outsourcing market between 2023 and 2027
• Precise estimation of the recruitment process outsourcing market size and its contribution to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the industry across North America, APAC, Europe, Middle East and Africa, and South America
• A thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive analysis of factors that will challenge the growth of recruitment process outsourcing market vendors

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