NelsonHall NEAT Report - Rethinking-RPO-2019-06-20

Rethinking Recruitment Process Outsourcing for
Competitive Advantage
Next Generation Recruitment Process Outsourcing, June 2019
nikki.edwards@nelson-hall.com
© 2019 by NelsonHall NelsonHall Proprietary – Not for distribution without permission
NelsonHall Defines Recruitment Process Outsourcing (RPO) as:
The transfer of operational responsibility of the talent acquisition (TA) function from the client to a services
provider, for the provision of permanent staff (whether across the entire client organization or part of the client
organization). RPO services can include management of the end-to-end hiring process (with/without
onboarding), TA administration, advice on/use of TA technology/tools, and TA marketing.
RPO does not include standard recruiting services provided by a recruitment agency.
The contract needs to be a minimum of one year in length to qualify as an outsourcing service.
RPO can be delivered in a standalone (traditional or hybrid) format, as part of a multi-process HRO, or as a
blended solution with managed service provision (MSP)/total talent.
This report focuses principally on the market for standalone RPO. Traditional RPO is the original end-to-end
hiring process. Hybrid RPO comprises a mix of traditional RPO, and project RPO/staff augmentation (to address
peaks and troughs in demand).
Appendix 1 lists the service processes included in RPO.
1. Changing Shape of Recruitment Process
Outsourcing
© 2019 by NelsonHall 3
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End to end RPO still dominates the market, with the emphasis on
candidate attraction….
CURRENT RPO MARKET
1. The global RPO market had estimated revenues of $6.2bn in 2018, with predicted CAAGR of 11.9% y/y
2. The current key drivers for RPO adoption include service agility (flexibility/scalability), access to sourcing expertise, access
to tech/tools expertise, and driving efficiencies through the standardization/centralization of TA processes
3. RPO models are more flexible and tailored (with an uptick in demand for project RPO, on-demand RPO, and hybrid
models), such that the boundaries between them are becoming blurred. Blended models (RPO/MSP/total talent)
continue to evolve and represent part of the portfolio for many RPO vendors
4. Mid-sized organizations (500 – 15K employees) with RPO contracts have almost caught up with large sized organizations
(with >15k employees) – a 2% difference in market share in 2018
5. Single country contracts have a 69% market share (2018). Global RPO contracts account for ~8% of the market (2018),
showing very little change compared to 2017
6. Services have come full circle (shifting from being a luxury item to standard offerings in 2017/2018, with some being
elevated due to their relative importance in the TA process in 2018/2019: sourcing, employer branding, recruitment
marketing, data/insights, etc.)
7. The greatest investment area for RPO vendors in 2018 was in technology/tools:
i. Launching new or upgrading existing operating/recruitment/marketing platforms to more unified platforms
ii. Digital transformation of their operations
iii. Reviewing, testing, and trialing third-party tech/tools for their ecosystems
8. Approximately 71% of RPO service delivery is hybrid (mix of SSC/hub, on client site, and remote); over 50% of RPO
vendors have between 75% and 100% hybrid delivery.
…in future, the RPO market will sit alongside total talent, with the
emphasis on improving the quality of hire
FUTURE RPO MARKET
1. The global RPO market revenue is estimated to be worth ~$11.0 bn in 2023

2. Drivers for RPO will become more tiered (ranging from traditional drivers – cost savings, sourcing expertise, etc. - to
more sophisticated drivers associated with maturity of programs – better insights, etc.
3. Further blurring of lines between TA models will likely to lead to a rethinking of RPO terminology (which currently
implies a siloed approach to permanent hiring)
4. Mid-sized organizations embracing RPO programs will exceed the number of large organizations doing so, as they
will not have the team size of TA resources required to run an RPO program without leveraging external support
5. As more RPO vendors expand their international/global footprint, so too will buyside organizations as they seek a
centralized/standardized RPO experience across their organizations for all TA activities
6. Talent management services (with emphasis on the internal development of existing employees through upskilling
and reskilling) will become more prevalent as a complementary offering to pure RPO/TA programs (as the global
talent shortage worsens) in addition to employer branding/recruitment marketing services
7. RPO/TA vendors will differentiate themselves in more combinations than ever before: industry/skillset specialisms,
tailored services, target size of organizations, geographies, etc., with organizations choosing multiple vendors to
work with according to best-fit by business unit, region, high-volume/niche hiring, etc.
8. Investment in digital transformation (vendors and their clients), data/analytics, multifunctional technology
platforms, and tools. Upcoming areas of interest: voice activated tech
9. 24/7 follow-the-sun service delivery (driving efficiencies) will be the norm, dominated by hybrid delivery. For
clients who want it, there will segregated options between high-touch delivery and high-tech delivery (more
platform-based delivery).
2. Customer Requirements
The market will see a blurring of talent models and terminology
There will be a natural evolution to holistic approaches to talent (such as hybrid RPO, total talent, etc.). The
lines are blurring between different talent models and existing siloed terminology (RPO, MSP, etc.) is likely to
fall by the wayside (some vendors already dropping it from their vocabulary) as new terminology emerges
reflecting the new approach to TA.
Therefore in 2019 and beyond, segmentation in the marketplace could focus on:
• Global/geographic presence
• Sector presence
• Business function/skills specialism
• High-volume/niche
• Size of organization
• RPO model-type (such as being a build, operate, and transfer specialist; blended solutions, etc.)
• Stage of maturity
• Subsets of any of the above combinations.
© 2019 by NelsonHall
What a difference a year makes! Despite the same global
challenges, recruitment conversations focus on talent shortages,
rapid evolution of technology/tools, and the need for business
agility…
• PESTLE (political, economic, social, technological, legal, and environmental) issues still prevail, but
recruitment conversations are focusing on talent shortages, the rapid evolution of technology/tools, and the
need for organizations to be more agile
• Economic pressures (regional/country economies, budget spend, etc.) have led organizations to take a more
organic/piecemeal approach to TA (taking a try-before-you-buy approach or project-approach to RPO before
migrating to full RPO programs). As a result, organizations want their RPO vendor to be more agile in their
approach (to support the organization in peaks and troughs of talent demand)
• Finding and attracting talent is a priority for organizations. Social factors (with consumerized/personalized
experiences, social media, a multigenerational workforce, ageing workforce, preferred workstyles, etc.) are
the new norms with which organizations need to work to find/attract that talent
• The gap in technology/tools knowledge between an organization’s in-house team and an external vendor’s
knowledge is widening, such that more organizations feel the need to buy that expertise if they are to
remain competitive with their corporate tech/tools ecosystem
• Legal changes are ongoing, as organizations expand into new countries/regions, etc. requiring local
compliance
…organizations with mature RPO contracts want a better
candidate experience and better insights into the market
• Environmental issues continue to impact some organizations: finding talent to work in traditional energy
companies versus the newer cleaner energy companies, amidst an ageing workforce crisis in the traditional
energy companies; changing regulations on CO₂ emissions (requiring new manufacturing approaches/
skillsets, etc.)
• Recruitment conversations in most organizations still prioritize short-term needs: filling open vacancies,
using a particular tool for part of the recruitment process, and planning for the next business quarter
• There are more organizations who have mature RPO partnerships (at least third-generation contracts), that
are looking for more specific outcomes from their ongoing relationships such as:
o Driving a better candidate experience
o Getting better insights/intelligence on hiring
o Continuous improvement in performance
• There are more executives who have experienced RPO in previous employments, so are willing to embrace
RPO in their current employment setting, knowing the advantages that an RPO relationship can bring
Capability to support organizations through the peaks and
troughs of hiring demand is the top driver for organizations to seek
help from third-party RPO providers…
Key Drivers for RPO Details of Key Drivers Ranking (Previous
Year’s Ranking)
Agility (flexibility and Capability of the vendor to flex/scale resources up 1= (3)

scalability) of service and down, based on an organization’s short-term
and long-term hiring needs (e.g. seasonal trading
ramp-ups, business unit expansions/cut-backs,
economic downturns, etc.)
Buying expertise in how to Organizations need to buy-in expertise on how to 2= (1=)
find/source talent source/find candidates to fill their vacancies
Buying expertise in/having With the quickening pace of change in technology 2= (4)
access to the latest technology and tools (with the advantages that RPA/AI can
and tools bring), organizations need help in leveraging the
most appropriate tech and tools in support of
recruitment activity
Need efficiency/centralization/ Having an efficient, streamlined, and standardized 2= (10)
standardization of the recruitment processes (often centralized) is
recruitment processes essential in a competitive market (and it improves
candidate satisfaction)
© 2019 by NelsonHall 10 NelsonHall-Proprietary – Not for distribution without permission
...with leveraging expertise (on sourcing talent/on the best tech
and tools) being next in priority along with finding efficiency and
cost savings in the recruitment process
Year’s Ranking)
Cost savings With generational evolution of RPO contracts, organizations 2= (1=)

move from seeking initial cost savings (through process
efficiencies) to making ongoing cost savings through TA
effectiveness/continuous improvement
Faster speed of hiring Organizations want their RPO vendor to use their know-how 6 (n/a)
(and tech/tools) to reach the available talent faster than their
competitors
Improving quality of Organizations need “best fit” candidates (skills, experience, 7 (5)
hire values, location, predicted success/performance, longevity in
role, etc.)
Giving a great Organizations are starting to realize that the candidate is the 8= (n/a)
candidate experience priority: the candidate experience determines the success/
failure of the hiring process
Getting insights/ More organizations understand the benefits that an RPO 8= (n/a)
intelligence on talent vendor can bring re market (and other) insights/intelligence
surrounding the talent the organization wants to hire
More mature RPO buyers seek support in aiding a better
candidate experience, receiving better insights into talent, and
continuous improvement…
Year’s Ranking)
Continuous Organizations need/want their RPO vendor to be more 10= (n/a)

improvement proactive throughout the contract duration – recommending
ongoing improvements to the hiring process and the use of
tech/tools, etc.
Access to a range of Organizations want to leverage the range of RPO services that 10= (n/a)
services can improve their hiring process (such as employer branding/
recruitment marketing)
Integrated solution Organizations specifically look for a one-stop solution, giving 10= (n/a)
access to services and technology/tools that will improve
their TA process
Reduction of Some organizations struggle with employee turnover due to 10= (n/a)
employee turnover poor hiring. Organizations want their RPO vendor to help
them reduce the problem
Customized solution Organizations want their RPO vendor to create a bespoke 10= (n/a)
RPO solution that will elevate the organization in the eyes of
their potential candidate audience and be successful/
competitive in hiring talent
3. Market Size and Growth
Global RPO market will grow at 11.9% per annum, to reach
~$11.0bn in 2023…
Est. Split of
2018 RPO Est. Market Size 2018 Est. Market Size 2023 Est. CAAGR
Region
market revenue (Revenues $m) (Revenues $m) 2018-2023 (%)
share (%)
North America 43.2 2,765 5,465 14.6
EMEA: 32.9 2,009 3,136 9.3
UK 22.1 1,355 2,181 10.0
CEMEA 10.8 654 955 7.9
Asia Pacific 21.0 1,298 2,128 10.4
Latin America 2.9 174 240 6.8
Total 100.0% 6,246 10,969 11.9%
NelsonHall estimates, with adjustments made for rounding
BFSI, manufacturing/engineering, and pharma/healthcare
make up ~61% of the global RPO market
Industry Sector Est. Split of 2018 Est. Market Size Est. Market Size Est. CAAGR
RPO market 2018 2023 2018-2023 (%)
revenue share (%) (Revenues $m) (Revenues $m)
Banking, Financial
29.9 1,867 2,834 8.7
Services, Insurance
Manufacturing/
16.0 999 1,801 12.5
Engineering
Government 3.3 206 245 3.5
Technology 9.0 562 1,180 16.0
Healthcare 9.4 587 1,902 26.5
Pharmaceuticals 6.1 381 760 14.8
Energy and Utilities 3.1 193 253 5.5
Professional Services 2.3 144 154 1.5
Retail 8.2 512 753 2.1
Transportation 3.6 225 267 3.5
Telecoms/Media 5.9 369 567 9.0
Other 3.2 200 224 2.3
Total 100.0 6,246 10,940 11.9
NelsonHall estimates, with adjustments made for rounding
Small organizations now account for 20% of the RPO market
• In the last year there has been a significant change in the market breakdown by size of RPO client. Small
organizations have increased in importance, now accounting for 20% (cf. 12% in 2017)
• Several vendors have taken the opportunity to engage with small organizations with the potential to grow
quickly (industries such as fintech and renewable energy), which they would not have ordinarily considered
previously.
Multi-country/multi-region RPO deals have bounced back in
the past year
India: less continental drift, more a continental shift (with a tech
focus)
• The “Make in India” campaign (launched in 2014 by the Indian government) to stave off economic
depression has been successful in transforming India into a global design and manufacturing hub
• India is gearing up for its 5G launch
• Large technology companies are expanding rapidly, and are seeking level B or level C rounds of funding in
2019
• The chronic shortage of suitably-skilled talent means that organizations need to focus on upskilling or re-
skilling their existing workforce
• RPO vendors (like PeopleStrong) are focusing on delivering full end-to-end RPO programs (and have
decreased their proportion of project RPO deals), taking the challenges of permanent hiring away from
their clients, so they can focus more on the upskilling/re-skilling of existing employees
• In the space of one year, the demand for contingent workers has increased (2017/2018 characterized by
little interest in MSPs) due to rise of tech disrupters ( Ola, RentoMojo, Swiggy, etc.)
• Although it is difficult to predict how RPO models will evolve in India, with the growth of technology, it is
highly likely that by 2021 workers will be hired mainly through digital RPO’s.
South Africa: less continental shift, more continental drift
• South Africa:
o The culture is one where having permanent work is deemed better than being in contingent work, so the
traditional end-to-end RPO model prevails
o The impact of international RPO vendors making a presence has been to introduce flexible RPO models,
which organizations are reluctant to embrace
o The economy is relatively depressed: organizations are spending less on hiring (as hiring freezes prevail).
o talentCRU is increasing flexible RPO, augmentation services, and consulting (right-sizing) to offset
decreased spend by clients.
4. Vendor Offerings and Targeting
RPO requirements are becoming more diverse…
RPO Model* Description
End to end RPO Management of permanent recruitment from requisition through to offer acceptance or
(also known as onboarding. A TA technology platform and value-add TA tools are deployed as part of the
enterprise RPO, model. Can be deployed across an entire organization, part organization/business unit, or
selective RPO, function/skillset. Contract length: minimum one year; typically three years; can be five,
strategic RPO, seven or ten years.
traditional RPO,
High Volume RPO) More differentiation has appeared since 2018, even within a single vendor, typically
segregating niche/specialist RPO from high-volume (lower-cost) RPO (with different
technology platforms supporting each model).
Project RPO (also Mainly a short-term recruitment assignment of less than one year (but can be longer-term
known as pop up for the oil/gas industry, often >= four years). Typically a one-off scenario (new location, new
RPO) business unit, skillset, etc.). It is increasingly used as a “try before you buy” option before
committing to an end to end RPO contract. TA technology may/may not be deployed.
Over 2018/2019 there has been an increase in demand for project RPO focused on a specific
area of the TA process (sourcing/talent pooling, employer branding/recruitment marketing,
tech/tools advisory).
…with Hybrid RPO becoming more prevalent as organizations
want bespoke models to meet their different TA challenges
RPO Model Description
Staff The RPO vendor provides expert resources to support a client’s in-house recruitment team
augmentation for a specific purpose. Contract length is usually less than one year.
(also known as
complementary In 2018/2019 staff augmentation as a standalone model is more prevalent in RPO vendors
RPO, on-demand focused on the SMB market/specific sectors, where organizations are new to the concept of
RPO, plug in RPO) RPO. The vendor sees this model as a means of introducing the benefits that a more formal
RPO partnership can bring. For other vendors, this model is part of a hybrid RPO solution.
Sourcing and Purely a sourcing and screening service by the RPO vendor, with the HR function taking over
screening and seeing the candidates through to onboarding stage and beyond. Contract length is
usually less than one year.
In 2018/2019 sourcing and screening is diminishing as a standalone model and is offered as

part of a hybrid RPO solution.
Hybrid RPO (a mix A mix of end to end RPO, project RPO, staff augmentation, and screening and sourcing. The
of the models model evolved from the end to end RPO model, as client organizations increasingly asked for
above) ad-hoc TA support on short-term assignments. This model is becoming more prevalent, as
organizations seek flexibility/agility in TA support, to meet their changing business needs
Blended RPO Similar to Hybrid RPO, but focused on a mix of permanent hiring and contingent hiring.
Usually associated with organizations at a high level of talent outsourcing maturity
*These are the main types of models. Some vendors have variations of these models or overlap model types
Vendors increasingly offering flexible RPO models
The flexible RPO models introduced in recent years have become more tailored/bespoke over 2018/2019 as
vendors adapt the models to meet the peaks and troughs in talent acquisition (TA) demand, due to business
uncertainties of client organizations (restructuring, mergers, acquisitions, periodic hiring freezes). This pattern
has been fueled by a greater quantity and mix of organizations reaching out to RPO vendors for the first time
for advice to resolve a specific TA issue.
Examples:
• Some vendors who traditionally served either the high-volume RPO or the niche/specialist RPO market are
now operating in both spaces. Cielo introduced its High Volume RPO offering to capture a segment of the
market (retail, distributed industries, etc.) that would have overlooked Cielo in the past
• Korn Ferry’s co-sourced model is similar to a staff augmentation model, with Korn Ferry sourcing some of
the client organization’s talent, but Korn Ferry technology is deployed for all sourcing activity
• TalentRISE (with a background in executive search, recruiter-on-demand, and consulting services) entered
the TA outsourcing space in 2016 as flexible RPO models started to emerge. TalentRISE started in the more
flexible RPO models (staff augmentation, project RPO, etc.) before evolving to end-to-end RPO. The
demand for flexibility has led TalentRISE to create its FlexRPO offering (where organizations can have as
little or as much RPO support on an as-needs basis). It offers pilot RPO on a trial basis too.
• Avencia is a new niche vendor operating in the insurance sector (known for being a late adopter of RPO or
other outsourced TA services). Avencia takes a gentle approach by introducing RPO as “complementary“ to
the clients’ in-house TA teams (a stepping stone to full end-to-end RPOs or blended RPOs)
• talentCRU, an established vendor, operating in the relatively immature RPO market of South Africa has
experienced the impact of U.S.-established or U.K.-established vendors entering the market. In a market
that is not yet ready to embrace high levels of RPO flexibility/agility. talentCRU is offering project RPO and
pilot RPO in addition to end-to-end RPO
• PeopleStrong emerged into the market as a HR Tech provider with RPO services.
Recruitment firms may become the initial agents of change
encouraging organizations to think differently about their future
talent needs
As more SMBs struggle with finding talent, those organizations may initially reach out to local recruitment
agencies (with whom they already have an established relationship) for advice/support on an ad-hoc or project
basis. Those recruitment businesses may have some expertise on sourcing, recruitment marketing, tech/tools
(based on their day-to-day operational practices)
There is a place in the talent market for recruitment agencies offering advisory services to organizations. These
recruitment firms may become the initial agencies of change encouraging organizations to think differently
about their future talent needs, and set them on their way. When organizations need to evolve their journey
further, that is the point at which they can partner an RPO/TA (outsourcing) vendor. Recruitment agencies with
a division offering outsourced services, can hand-off client organizations to their outsourced TA business, when
the clients are ready to embrace outsourcing.
As RPO vendors will be increasingly segmented, this will drive organizations to seek/change vendors regularly
or leverage multiple vendors to meet their different business needs at a given point of time.
Tailored tech/tool ecosystems underpin the RPO services offered…
Technology/tools used in TA, specifically RPO programs, have evolved considerably in the past five years:
• In 2014/2015 more talent platforms (not just the ATS) were leveraged and APIs became standard in
connecting them. Tools appeared in the market to help fulfil a particular TA task (tending to plug a gap in
functionality of a talent platform). A vendor had a core stack of tech/tools
• By 2016/2017 RPO/TA vendors were using a variety of platforms: recruitment/operating platform, ATS,
CRM, marketing platforms, HCMs, VMS’, analytics, etc. A few vendors had developed/launched multi-
functional TA platforms (for RPO/MSP/total talent). There were several third-party providers with products
in the market to fulfil a particular TA task (to continue filling gaps in functionality from other systems) .
Vendors were growing their tech/tools ecosystem
• In 2018/2019, new tech/tools are evolving daily, such that vendors are regularly replacing technology/tools
in their ecosystem with those having better functionality, tailoring their offering for clients
• RPO/TA vendors have teams of employees reviewing improvements to existing tech/tools and researching/
trialling new tech/tools in the market, such that clients can expect an evolving ecosystem of tech/tools
throughout the duration of their RPO contract
• Tailored tech/tool ecosystems underpin the RPO services offered to clients.
Automation
As organizations compete to find candidates in a timely manner, RPO/TA vendors and third-party suppliers have
enhanced the automation (RPA) of specific hiring process steps in their platforms/tools, ensuring robustness of
the technology. Slide 49 shows how Alexander Mann Solutions and KellyOCG evolved their internally-developed
hiring process bots during 2018.
…with process bots automating admin-heavy hiring steps
Proprietary Process Bots
Vendor Process
(2018/2019)
Alexander Doris Document download and orchestration
Mann Solutions Esme E-signature for contracts
Sasha Referencing
Eric ATS (+ other platform) download/rep
Isaac Interview sched
Hana Help automaton
Rhys AI sourcing
Cha Cha Check and chase
Gaia TA admin
Ombra Onboarding
KellyOCG 40 bots E.g., order entry, screening, onboarding, financial
transactions, etc.
RPA (and AI) is routinely (and confidently) applied to “top of the funnel” hiring process steps:
• One click apply
• Sourcing and matching candidates
• Candidate engagement (automated emails/texts)
• Screening candidates
• Assessing candidates
• Interview scheduling
• Reminders
• Background checking
• Documentation issue, signature, and return.
Use of conversational interfaces has become the norm…
In 2017, the expectation that more hiring process steps would become automated was overstated. Rather, 2018
saw developments evolve in two directions:
• The use of RPA in recruitment marketing (to attract talent) using programmatic advertising of job roles
• Secondly, the increase in sophistication of the algorithms used in AI to improve those existing hiring steps.
In 2018/2019 the use of conversational interfaces (software interfaces that allow users to write or speak in
natural language to software) in the hiring process is the new norm, driven by advances in mobilization and
personalization of technology.
Text-based chat platforms have taken off, with several third-party platforms being leveraged by RPO/TA
vendors:
• TextRecruit – comprises ARI (automated recruiter interface) chatbot which is 100% configurable for
managing top-of-the-funnel conversations. TextRecruit uses the IBM Watson AI engine
• LiveChat (for hiring applications)
• Mya (conversational AI platform, guiding candidates from job search, to hire, onboarding, and career
advancement)
• Arya (for query management or volume hiring, reducing time to hire). It uses behavior pattern recognition
to target and gauge a candidate’s likeliness to move and then automatically begins a conversation about a
relevant role.
RPO/TA vendors have also been developing proprietary chatbots (KellyOCG and ManpowerGroup Solutions, for
example). Here are examples of KellyOCG’s chatbots:
• Ava - internal: answers tech questions, drives adoption of front office technologies
• Kelly - job search and onboarding for candidates
• Others for supplier support and customer careers sites.
…with an increasing drive for technology that will understand
context and sentiment
Open ended bots using voice technology (such as Alexa or Google Assistant) are not yet at the level to engage
in a basic conversation.
RPO/TA vendors are eagerly watching the next-generation conversational interface platform space:
• In 2019 and beyond, developments in conversational interfaces/AI aim to interpret text and spoken
language on an almost human level
• The theory is that chatbots could be pointed at unstructured text and they would be able to answer
questions about the text at a human level or better
• Conversational chatbots need to understand the context and the sentiment behind the conversation
• In the future users will be able to pick which channel they want to use and how they want to use the UI.
They will not need to be precise in their instructions as the UI will ask follow up questions if there is any
ambiguity
The conversational AI solution must seamlessly integrate with back-end data and third-party databases to
enable deeper personalization.
In 2019 RPO/TA vendors are looking at developments in/the progression of:

• Amazon Lex AI platform
• WhatsApp chatbot framework (WhatsApp is the main communication channel in the Middle East and
APAC).
Vendors increasingly developing multifunctional recruiting platforms
with new players emerging to fill functionality gaps…
The trend of vendors developing multifunctional platforms or seamlessly integrating a number of platforms
(marketing, ATS, HCM, analytics, etc.) via a single interface layer continued strongly in 2018. RPA, AI, and
conversational interfaces are an embedded part of these recruitment platforms.
These platforms also need to integrate with an ever-growing ecosystem of other tech/tools. Some vendors
(ADP and PeopleStrong, for example) have developed marketplaces for APIs to enable integration across
platforms/tools. Also, there is an ever-growing body of technology providers (Beamery, Ayo, Greenhouse, Levr,
and Clinch, for example) creating next-generation platforms that are competing to fill some of the functionality
gaps of the well-known platforms.
(More multifunctional) third-party core recruitment technology used by the smaller RPO vendors includes:
• Avencia: Saba Lumesse TalentLink
• Personify: Herefish (candidate engagement platform)
• talentCRU: Saba Lumesse TalentLink
• TalentRISE: Avature (CRM)
In addition to ATSs, the most popular third-party technologies that vendors leverage through key partnerships
include:
• Avature (CRM)
• Phenom People
• Sterling - Global background and identity services/checks
• Appcast – programmatic job advertising solutions
• TalVista – D&I platform to manage unconscious bias
• Talentify – high volume recruitment.
Vendors placing greater emphasis on consultancy services &
upgrading consulting talent ….
Examples of advisory/consultancy services include:

• Alexander Mann Solutions: its Talent Collective delivers a range of advisory/consultancy services
(assessment and selection, candidate experience, competitive intelligence, diversity and inclusion,
employer branding, executive talent, insights and analytics, market intelligence, recruitment marketing,
strategic workforce planning, talent process transformation, talent strategy, technology, training)
• PeopleScout: its Talent Advisory (comprising three main areas of employer brand, assessment, and
recruitment marketing) can be sold as a standalone offering, or as part of an RPO program along with other
services (which are managed by separate internal teams)
Vendors are upgrading their consulting talent

• Several vendors have ensured that their employees are competent in advisory/consultancy skills, such that
those employees have undergone training as business consultants (for example, Cielo, ManpowerGroup
Solutions, and PeopleStrong)
• Other vendors have brought in senior level talent to head up consultancy branches (for example IBM in
their Consulting and Solutions teams)
• Cielo drives an entrepreneurial culture with diversity and inclusivity certification, certified to serve (WE
BECOME YOU), internal mobility/training, learning tracks, innovation wards, HiPo, and continuing
education.
…together with greater emphasis on industry-specific capability
Some vendors have added industry-specific or skills-specific teams (where the number of clients/volume of
skilled hires makes it worthwhile to create such a team):
• WilsonHCG: healthcare recruitment, sales recruitment and technology recruitment
• Korn Ferry: its “Talent Ready” team with specific industry sector knowledge and multi-lingual capability to
scale up clients needs at short notice.
Other vendors are structuring sourcing by industry sector (as vendors want to impress upon their clients they
have the in-depth vertical expertise to be competitive in a tight talent market). Examples include:
• Alexander Mann Solutions:
o Started in 2017, and expanded in 2018, it divides its business into eight industry organizations (its
sourcers/recruiters with industry-specific (and associated skills-specific) background/hiring experience in
those sectors)
o The eight organizations are: defense, engineering, energy, and manufacturing; investment banking;
pharmaceuticals and life sciences; public sector; insurance and retail banking; retail and consumer
packaged goods; technology, media, and communications; business and professional services
• Pontoon Solutions:
o Created four segments (with newly-appointed global heads): financial services; life sciences and
industrial; consumer products and retail; technology and telecom
Vendors are increasing their investments in sourcer training…
In a tight talent market, staying at the top of the sourcing game needs ongoing investment in sourcer/recruiter
training. Examples of what vendors are doing include:
• ADP: AIRS recruitment training:
o Used for its own employees and its clients’ employees
o Eight industry-recognized certifications for TA professionals (diversity, military/veteran, social media
recruitment, etc.)
o 30 recruitment-specific courses on offer by the end of 2018
• Cielo has its RecruitU training for next-generation recruiters
• Hudson RPO: utilizes Social Talent online learning platform:
o All recruiters/sourcers are accredited black belt recruiters (continuing in 2019)
• Korn Ferry has its Talent Academy (an eight-week intensive training program) for the development of bi-
lingual or multilingual recruiters.
With the competition for sourcing intensifying, there comes a break-even point at which vendors decide
whether to continue investing in their in-house capability or use recruitment partners. Most vendors leverage
third-party recruitment experts for the recruitment of very niche skillsets.
…while also increasing their ability to upskill internal talent
In 2018/2019 more vendors are working with their clients to grow their talent from within their organizations,
as the availability of suitably skilled/experienced externally-sourced talent dries up. Examples include:
• Setting up internships/rehiring the same candidates after graduation
• Using third-party platforms/tools in their tech stacks to upskill/reskill workers:
o Codility (for training programmers)
• A number of vendors have made strategic acquisitions of companies with learning platforms:
o KellyOCG upskilling its clients’ workforces via Kenzie Academy (which Kelly Services acquired in 2018)
o PeopleStrong integrating the Capabiliti platform (from its acquisition of Qustn Technologies in March
2018)
o Sevenstep training technical skills through its ID² platform through its acquisition of the MDI Group
(December 2018)
It is highly likely in 2019/2020 that more RPO/TA vendors will make strategic acquisitions of learning
organizations which are complementary to TA to broaden their scope to find talent.
Employer branding and recruitment marketing are again increasing
in importance
Finding talent is one thing, attracting talent to an organization is another! Employer branding/recruitment
marketing (once seen as a luxury service) has come full-circle, and is now more important than ever in helping
organizations complete the TA jigsaw puzzle in a bid to win the war on talent.
Slides 58-60 show client examples of how they have successfully brought together sourcing, employer
branding/ recruitment marketing, and the use of technology/tools to create compelling stories in a bid to
attract talent to their clients’ organizations.
As the employer branding/recruitment marketing area hots up, here are some examples of how vendors have
sought that expertise during 2018:
• Cielo has evolved its brand and digital consulting team (with the concept of “talent magnetism” at its core)
• PeopleScout acquired TMP Holdings LTD (the Yocto RPO brand) in the U.K., with its background in providing
employer branding and recruitment marketing, resourcing and assessment, and specialist services in the
United Kingdom. This acquisition also enabled PeopleScout to grow its geographic footprint
• talentCRU makes use of its parent company’s (Adcorp Holdings Limited) background in advertising/
marketing
In 2019, there will be a number of RPO/TA vendors who will make strategic acquisitions in the area of employer
branding/recruitment marketing, to better compete in this space.
RPO vendors use a range of models/tools/frameworks to ascertain
the starting position of their potential client
Vendor Partnership/Engagement
The RPO industry is far-removed from the one-size-fits-all approach commonplace just six or seven years ago
and the “sales pitch” has long-since gone.
At the RFP/pitch stage, RPO vendors seek to understand the talent challenges facing their potential client based
on the impact of PESTLE factors, industry segment, geography, skillsets, their understanding/experience of TA
outsourcing, the company culture, its strategic plan, etc.) by working collaboratively with the client. The vendor
will then put forward an initial TA solution for further discussion.
RPO vendors use a range of models/tools/frameworks to ascertain the starting position of their potential client
(which can also be used for continuous improvement):
• Allegis Global Solutions launched its QUANTUM framework in 2018
• Korn Ferry uses its six pillars methodology as a basis for building RPO programs for its clients
• ManpowerGroup Solutions uses a combination of insights and strategic workforce planning (SWP)
methodology to ascertain the right work models for a client
• Personify conducts a full market analysis on the availability of talent in the marketplace as a starting point
to determine a new TA plan or a change to an existing TA plan
• Resource Solutions leverages its ”candidate as consumers” framework. This framework can be used across
programs and can be bespoked for each client.
It’s all about the candidate experience….
Back in 2016/2017, having a great candidate experience was the exception rather than the norm. In 2018/2019
having a great candidate experience is expected. The global talent shortage, mobilization/personalization of
tech, amongst other things, has put the candidate at the enter of the hiring process. The candidate is king.
In 2018/2019, candidate experience means so much more:

• Cielo still operates its candidate impression center (for candidates’ initial contact with client organizations)
and pre-employment bridge (offering support from offer to onboarding stage), which were established in
2010 and 2011 respectively, specifically to offer “high-touch” engagement with candidates
• Candidate experience now plays predominantly at the top end of the funnel (the beginning of the hiring
process) through the use of technology and tools:
o All candidates (irrespective of generation: Gen X’s to Gen Z’s) leverage mobile technology (smartphones
or tablets) in their day-to-day lives, and they want to use these in their job search
o Candidates want to spend less time on job search, expecting to be sourced by vendors/organizations, be
screened for, and have notification of initial selection for a job within a few hours
o Candidates no longer want drawn-out hiring processes (whatever level of hiring)
o Candidates expect ongoing touch points throughout the process, up to start-date
… using a combination of tech and touch
• RPO/TA vendors have stepped-up their capability in delivering great candidate experiences on behalf of
their clients, by leveraging appropriate tech/tools from their tech ecosystems that have undergone
mobilization, improvements in UI or UX (swipe right, two-clicks apply, etc.), and so on
• As employer branding has increased in importance, RPO/TA vendors have been advising their clients on
how to engage with potential candidates, through compelling storytelling around their brand:
o A number of RPO/TA vendors have seen their clients win Candidate Experience (CandE) awards, through
initiatives the vendors have introduced to improve candidate experience (Cielo, ManpowerGroup
Solutions, and WilsonHCG, for example)
In March 2019, Pontoon Solutions launched its RXO solution (formalizing its focus on customer centricity – for
candidates and clients - at its core). It is a tech/tools ecosystem (with digital automation, RPA, analytics),
combined with a methodology (involving training employees in lean/six sigma recruitment). Delivery support
has been aligned to vertical industry segments.
It is likely that in 2019 and beyond other vendors will enhance their service offerings around candidate
experience. The more dramatic changes are likely to be where vendors are going through tech transformation
themselves, prompting them to review their entire approach to TA.
Organizations have very little appetite to embrace outcome-based
SLAs/KPIs
Many vendors have been disappointed that the appetite to embrace outcome based SLAs/KPIs amongst their
clients has floundered somewhat, and the take-up of them stalled: client organizations preferring to measure
RPO program success by traditional metrics.
Reasons for this include:

• Delineating responsibility between the vendor and client organizations when measuring outcome-based
metrics (vendors should not be penalized financially for SLAs/KPIs that are determined by the HMs’ or
organizations’ actions)
• Proportionately fewer organizations at a mature stage of RPO partnership with their vendor compared to
the total number of organizations that are now embracing RPO in some form (which has increased over the
2018 period)
• Ongoing improvements in RPA/AI for sourcing, screening, and scheduling candidates such that traditional
SLAs/KPIs (time to slate, time to hire, etc.) can be achieved in less time (critical to measure in a competitive
hiring landscape)
• Organizations can review their SLA/KPI data/analytics in real time (usually through an interactive
dashboard) and measure/see improvement over time
• More depth and breadth of data points (and associated analytics) used to measure the traditional
SLAs/KPIs such that organizations can glean much more information about the factors contributing to
SLA/KPI achievement (such as the most effective sourcing channel, etc.)
6. Vendor Delivery in Recruitment Process Outsourcing
Shared service center coverage is noticeably improved across
the less mature RPO regions…
With a broader mix of vendors (new and established ones from different geographies) providing RPO/TA
outsourcing services, there is a more diverse range of service delivery models on offer.
In 2019, there appears to be a better geographic coverage of SSCs (onshore and nearshore) with them being
more aligned to where the vendors have clients. The proportion of RPO vendors interviewed with hubs/shared
service centers (SSCs) in certain regions was:
• North America: ~76%
• U.K.: ~71%
• Continental Europe: ~59%
• MEA: ~18%
• APAC: ~76%
• LATAM: ~29%.
Slides 70 and 71 show the number of SSCs/hubs per region for a number of the RPO vendors. APAC (catching
up with the U.S.), MEA, and LATAM have seen growth in SSC numbers which equates to the growing footprint
of vendors in these regions.
On average, 71% of service delivery is hybrid (any combination of
SSCs, on client site, and remote)..
In addition to SSCs, vendors have offered on-client-site delivery, and remote (home-based) support for many
years. These were traditionally offered as alternative delivery means to SSCs. With the introduction of flexible
RPO models/services to meet client demand, whilst balancing the vendors’ needs to deliver a cost-effective
solutions, the blended service delivery (a mix of two from SSCs, onsite, or remote support) model became
increasingly popular.
In 2017/2018 about 50% of all RPO service delivery came through hybrid models (with noticeable pockets of
high volumes of hybrid delivery from Allegis Global Solutions, IBM, and PeopleScout – above 65%). Separate
SSC delivery represented ~21%, on client site ~16%, and remote ~12%. 1% vendors delivered service from
their offices.
By contrast in 2018/2019, there has been a considerable increase in the use of blended service delivery
models with an average of ~71% of service delivered this way. Over half of the vendors interviewed have
hybrid delivery representing over 75%, many being at 100% hybrid delivery. There has been a reduction in SSC
only delivery by ~30%, a reduction in onsite only delivery of 50%, and a reduction in remote only delivery by
58%. Leveraging a network of branch offices as delivery support locations is a strategy being used to keep
costs low (talentCRU in South Africa delivers support from its offices): this can be particularly important in a
country with economic problems). Offices are being used more to “land and expand” in a new location - the
infrastructure is already in place, so saves cost for the vendor when there is potential risk to setting up in that
new location.
…a 21% increase in the proportion of hybrid delivery in one year
The chart shows the average proportional representation of delivery types as part of hybrid service delivery.
7. Challenges and Success Factors
The #1 key challenge is attracting “in-short-supply” talent to the
vendors’ client organizations
• This challenge is directly linked to the worsening shortage of suitably skilled talent across the globe:
o When the demand for talent exceeds supply, TA becomes a multi-faceted operation comprising insight-led
sourcing, employer branding, and recruitment marketing as organizations compete for the same candidates
o The talent shortage affects all organizations at some point. It is no longer confined to professional-level roles
seeking niche skills (typically associated with high-tech roles, pharma/life sciences, etc.). It applies to non-
exempt roles too (drivers, machine operators, etc.)
• Vendors need to ensure their employer branding/recruitment marketing (attraction) services are top-notch:
o For those vendors who do not offer established employer branding/recruitment marketing services, the
decision is whether to buy or build (acquire an employer branding business or build capability in-house)
o Vendors must ensure their employees are up-to-date with the latest employer branding/recruitment marketing
techniques to ensure ongoing performance at the highest level
o Employer branding must engage all stakeholders within client organizations (not just HR or the TA team)
o Vendors must use the best mix of appropriate recruitment marketing techniques to attract the right candidates
for any given role based on their understanding of their clients’ organizations/audiences (whether attracting
external candidates or developing/promoting internal candidates)
• All vendors have clients in their portfolios which are deemed “less attractive”. Most clients are not a revered
“Google” or “Spotify.”
o Vendors have to put in extra effort on recruitment marketing activities with the clients in this category to get
candidates to apply for jobs
• Vendors need to educate their clients that in an ever tightening market employer branding and recruitment
marketing are essential components for TA success.
Critical success factors in talent attraction include being able to convey
emotions in TA campaigns to make an impact with target audiences
Critical success factors in client attraction include:

• Having an established employer branding/recruitment marketing team as part of its service offerings
(whether in-house or via a third-party provider)
• Having referenceable clients to demonstrate employer branding/recruitment marketing work (aligned to
industries, company cultures, mix of audiences, geographies, etc.)
• Deploying and embedding a brand within the clients’ wider organizations: so employees “live and
breathe” it (so employees can promote their organizational culture through TA campaigns)
• Demonstrating an advanced level recruitment marketing expertise: being able to convey emotions, etc. in
TA campaigns, to make an impact with target audiences
• Being able to go the extra mile: at RFI stage, being able to convey a recruitment marketing message by
having researched the potential client in detail
• Proving the success of employer branding/recruitment marketing by presenting data/analytics before and
after employer branding/recruitment marketing campaigns.
The #2 key challenge is the worsening global talent shortage
• Technical skills have been in short supply for many years, but extra challenges come into play when:
o The pace of change in technology exceeds the speed at which learning providers can train candidates/employees in the
tech skill needed, so the skills shortage is exacerbated
o Roles in new technologies where all candidates applying have limited like-for-like experience: developing driverless cars,
etc. Need candidates with similar/transferable skillsets
o Roles require both technical skills and other specialist skillsets (for example technical skills with pharma skills) - a sample
role being a confocal engineer - have a more depleted talent pool to work with
o Geography constrains the size of the talent pool (for example, the South African market): client organizations need to
consider attracting ex-pat nationals back to South Africa to fulfil tech roles or undertake a large-scale upskilling or
reskilling initiative
• Educating client organizations that they need to keep an open mind in deploying the most appropriate sourcing method
(even search-type methods) or bring their sourcing approaches into the digital world for hard-to-find talent/an ever-
shrinking talent pool:
o Financial advisers are choosy, have high drop-out rates, and require three times the effort to source/attract than most
other roles (mature and immature RPO regions)
o The insurance industry relies on referrals/network (where everyone knows each other) and biographical resumes/in-situ
interviews to find their next candidate. This is hindering attraction of next-generation talent into the industry
o Pharmaceuticals: due to a very depleted talent pool, convincing client organizations that they have to consider suitably
skilled/qualified candidates on a global scale and make decisions as to the best location for the selected candidate later
(not take a localized approach to hiring)
• Non-exempt or blue-collar roles (drivers, machine operators, skilled trades, etc.) typified by candidates who are not online,
require grass-roots hiring methodologies in an era when most sourcing/hiring is digitalized
• Sourcing candidates for roles in industries which have long hours and low pay (nurses, social care workers, etc.) or are
deemed out-dated (traditional energy: oil and gas, etc.) when the next-generation of talent want a better work life balance,
better pay, and work in more environmentally friendly industries (renewable energy, electric vehicles, etc.)
• Job hopping (to find the best paid work) means that candidates are not staying in jobs long enough to learn new skills and
build up credible experience/expertise.
Critical success factors include offering sourcing expertise/market
insights by industry vertical or skillset…
• Offering sourcing expertise/market insights by industry vertical or by skillsets (whether building internal team
expertise or utilizing third-party suppliers)
• Developing all-round consultancy skillsets in addition to industry/skillset expertise, so recruiters can build out
digital strategies for their clients by specialism
• Having referenceable case studies by industry vertical showing TA successes. For new industries/skillsets, having
referenceable case studies showing TA successes through transferring skills from similar industries/skills (which
emphasizes the transferrable nature of good sourcing techniques, as opposed to the importance of an exact
industry/skillset)
• Driving initiatives to attract the next generation of talent (apprenticeships, internships, graduates, STEM, etc.)
• Successfully demonstrate talent pooling/talent cloud management capability for keeping a pipeline of ready-to-
approach talent for future roles
• Driving initiatives to upskill/reskill the existing workforce in next-generation skills, so they remain fit for the future
of work. Forward-thinking vendors have already or are currently considering adding learning services to their
portfolio (examples include vendors working in partnership with learning organizations or vendors acquiring
learning businesses)
• Leveraging the best mix of technology/tools to successfully compete to source the talent needed for a given
client:
o Taking into consideration the nuances of the client: their industry sector, geographies, candidate audience
(generational values, work/tech preferences, etc.), maturity of digitalization journey, etc.
o Maximizing the benefit of RPA/AI to source better quality candidates in a shorter timeframe
• Adapting service delivery to maximize opportunities to reach/engage with talent faster:
o For example, embracing 24/7 follow-the-sun delivery (so sourcing can be a 24/7 operation)
o Using a mix of tech (chatbots, for example, for out-of-hours interaction) and touch (human interaction) to
engage talent.
The #3 key challenge is the choice/pace of change of technology
• The choice/pace of change of third-party technology have been increasing/accelerating since 2017:
o The more tech suppliers, the greater the pace of tech/tools advancement, as each supplier competes to
increase the features and functionality of their product in their chosen area of TA
o RPO/TA vendors have to constantly weigh up the most appropriate tech/tools to keep in their tech
ecosystem to satisfy their clients’ needs at a particular point in time (taking into consideration how
advanced or otherwise they are on their tech journey) - having too much choice is counter-productive
o Balancing the need for a good choice of tech/tools of different levels of features/functionality, vendors
spend more time in 2019 dropping tech/tools from their ecosystem to make way for better tech/tools
o All vendors have grown their tech teams, often increasing expertise levels to act as consultants (to
generally keep up-to-date with market developments and the number of latest products to review, test,
trial, and deploy)
o Vendors feel pressure whether to continue to invest in more tech headcount (as some expand their
remit to advise on tech/tools across clients’ entire organizations) or re-think their tech/tools strategy
(often technology develops at a pace faster than the speed at which people can be trained to use it, or
there are too many areas in which to develop deep expertise – RPA, AI, ML, API/integration platforms,
UI/UX, etc.)
• Similarly with proprietary technology, vendors must decide whether to keep upgrading their platforms/
tools or accept that adding more third-party platforms/tools to the ecosystem (using certain technologies)
is the best long-term strategy
• Vendors are feeling the pressure to outsource some technology-related consulting to partners:
o Particularly the deployment/integration of tech/tools for their clients
o There are risks: potentially damaging the vendor’s reputation due to poor deployment/integration
services delivered by the partner (unless stringent guidelines/penalties in place).
Critical success factors include offering a good all-round knowledge of
the technology options and building tech reviews into QBR process
• Demonstrating to client organizations:

o A good all-round market knowledge of latest talent tech/tools available (features and functionality)
o Understanding what tech/tools are appropriate for the clients’ needs (based on where they are on their
tech/tools journey)
o Expertise to help clients formulate a suitable tech/tools transformation roadmap, with milestones to
achieve
o Going the extra mile: recommending what general tech/tools are appropriate for the business (beyond
TA)
o Proactivity in the vendor’s advice: by making ongoing suggestions to swap out tech/tools as more
appropriate tech/tools come into the market; encouraging clients to take part in trials of new tech/tools
as a means to embrace the advantages tech/tools bring (not to fear tech/tools)
o Building tech/tools updates/reviews as an agenda item in the QBR process
o Eagerness to seek competitive advantage by timely strategic acquisitions of tech platforms.

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Rethinking Recruitment Process Outsourcing for

1. The global RPO market revenue is estimated to be worth ~$11.0 bn in 2023

Next Generation Recruitment Process Outsourcing, June 2019

Agility (flexibility and Capability of the vendor to flex/scale resources up 1= (3)

Cost savings With generational evolution of RPO contracts, organizations 2= (1=)

Continuous Organizations need/want their RPO vendor to be more 10= (n/a)

EMEA: 32.9 2,009 3,136 9.3

UK 22.1 1,355 2,181 10.0

CEMEA 10.8 654 955 7.9

Asia Pacific 21.0 1,298 2,128 10.4

Latin America 2.9 174 240 6.8

Total 100.0% 6,246 10,969 11.9%

NelsonHall estimates, with adjustments made for rounding

RPO Model* Description

In 2018/2019 sourcing and screening is diminishing as a standalone model and is offered as

In 2019 RPO/TA vendors are looking at developments in/the progression of:

Examples of advisory/consultancy services include:

Vendors are upgrading their consulting talent

In 2018/2019, candidate experience means so much more:

Reasons for this include:

Next Generation Recruitment Process Outsourcing, June 2019

Critical success factors in client attraction include:

• Demonstrating to client organizations:

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