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The recruitment process outsourcing market is estimated to grow at a CAGR of 15.2% between 2022 and 2027. The size of the market is forecast to increase by USD 7,600.36 million. 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.
This 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 analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The cost reduction by streamlining the hiring process is notably driving the market growth, although factors such as unstable labor laws and regulations may impede the market growth. 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 Recruitment Process Outsourcing Market Driver
The cost reduction by streamlining the hiring process is notably driving the market growth. To constantly add business value and to cut operational costs wherever possible, RPO is required. Hence, to reduce the cost per hire, companies are actively approaching RPO firms. When a business expands into another product category or another region of the world, recruiting needs to rise considerably. Similarly, during downturns, the retrenchment of the workforce needs to be done. Such imbalances incur high costs for any company. RPO partners streamline the hiring process to reduce such market imbalances.
Furthermore, the outsourcing of the recruitment process gives companies scope to share the price-associated risks with the RPO partner. For instance, the RPO solution provided by Hudson RPO to a leading provider of water treatment helped it save $1.8 million in terms of agency cost savings. Hudson RPO provided the company with on-site/off-site recruitment teams, qualitative and quantitative reporting solutions, applicant tracking systems, and vendor management services. Thus, the need for various organizations to reduce their operating costs by streamlining the hiring process is expected to fuel the growth of the global RPO market during the forecast period.
Significant Recruitment Process Outsourcing 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 Recruitment Process Outsourcing 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 Recruitment Process Outsourcing 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 Recruitment Process Outsourcing Market Customer Landscape
Vendors 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 vendors, including:
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.
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, recruitment process outsourcing 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 recruitment process 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 recruitment process outsourcing 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 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.
Due to COVID-19, various industries across the US witnessed a slump in their revenues in 2020. However, recruitment has witnessed a boost from 2021 since the normalization of processes post-COVID-19 after the vaccination drive. As organizations are expanding globally, the requirement for employees is increasing, and organizations are keen on recruiting new people through outsourcing owing to the low costs compared to direct recruiting. This is expected to positively drive the growth of the RPO market during the forecast period.
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.
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Recruitment Process Outsourcing Market Scope |
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Report Coverage |
Details |
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Page number |
177 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 15.2% |
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Market growth 2023-2027 |
USD 7,600.36 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
14.09 |
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Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
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Performing market contribution |
North America at 40% |
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Key countries |
US, Canada, Australia, India, and UK |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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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 |
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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. |
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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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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 Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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