Speaker: John Nurthen, Executive Director, Global Research, Staffing Industry Analysts
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1 RESEARCH FOCUS Recruitment Process Outsourcing (RPO): The State of the Industry Speaker: John Nurthen, Executive Director, Global Research, Staffing Industry Analysts
2 Recruitment Process Outsourcing (RPO): The State of the Industry Market Overview Market Trends Best Practices
3 RPO Definition A service segment of the Process Outsourcing Industry, RPO is the partial or full outsourcing of the internal recruitment function to a third-party specialist provider, which serves to provide the necessary skills, activities, tools, technologies, related recruitment supply chain partners and process methodologies to assume the role of the client s recruiting department by owning and managing its recruitment process and related recruitment supply chain partner relationships. RPO is more commonly used as a method for employers to recruit direct-hire personnel, particularly in the US. In Europe, contingent workers will also be included within that scope in some instances. Source: Staffing Industry Analysts Lexicon
4 Why Consider RPO? Quality Deliver quality hires consistently (89%) Agility Demonstrate agility to meet changing demands (85%) Innovation Innovate to meet the demands of the business case (84%) Source: Cielo Talent Acquisition 360 Survey
5 Core Solution Value Proposition Talent Acquisition Solutions Direct Hire Process Support Service Elements: Limited/Focused Results Ownership Candidate Sourcing & Development Candidate Coaching & Management RPO Solutions Process Management Service Elements: Process Management (Results) Ownership Technology Management Talent Sourcing Expertise Hiring Manager & Candidate Management Source: Staffing Industry Analysts
6 More than a Volume Direct Hire Service Typically, recruiting resource 75% to 100% dedicated to client Typically, sourced candidate pool owned by client Service Level Accountability and comprehensive process visibility All activity tracked and processed by recruitment management technology (ATS) Includes process consultation and re-design Provider represents the client and employment brand Scope is typically end-to-end
7 Recruiting Solution Spectrum End-to-End RPO Business Value Volume Hire Selective/Project RPO Recruiting Services Direct Hire Complexity Source: Staffing Industry Analysts
8 End-to-End RPO 200 to 10,000+ hiring volume (Internal & External), exclusive with contractual minimums 3 to 5 year contract Solution price focused on a result 3-5 defined SLAs, measurable through an automated system of record, penalties and rewards may apply Skill-set scope is defined ATS technology may be bundled, but included in the process
9 Selective/Project RPO 10 to 500 hiring volume, exclusive with contractual minimums Limited process scope and timeframe (maybe evergreen contract) Solution price focused on a service delivery, but maybe result Tough to apply SLAs, might have KPIs ATS technology may be included in the process
10 The Global RPO Market RPO Global Market Spend by Region 2015 (millions) $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Global North America EMEA APAC LATAM 2015 Revenue (USD $m) $3,695 $1,623 $1,137 $830 $106 Share of Global Revenue 100% 44% 31% 22% 3% Source: Staffing Industry Analysts, RPO Market Developments
11 MSP v RPO Measured by Net Revenue (Gross Profit) MSP and RPO are about the same size globally MSP $3 billion RPO $3 billion SIA market estimates, 2015
12 MSP v RPO...and are both growing at double-digit rates +13% +15% MSP $3 billion RPO $3 billion SIA market estimates, 2015
13 RPO Motivation What was your primary reason(s) for implementing an RPO? Meeting talent needs of a short term project Source: Staffing Industry Analysts, Workforce Buyer Survey
14 Role of the Contingent Workforce Manager in RPO Contingent Workforce Manager RPO Involvement We use RPO but I do not have knowledge or influence over RPO in my organization 14% We use RPO and I am responsible for RPO in my organization 6% 60% We do not use RPO in my organization We use RPO and I am not 20% responsible for RPO in my organization but I have some knowledge/influence over RPO
15 RPO Services Adoption RPO Scope of Services (% share of market) Source, Select, Contract, Onboard & Exit Interviews 5% Source, Select, Contract & Onboard 52% Source, Select & Contract 31% Source & Select Only 12% 0% 10% 20% 30% 40% 50% 60% Source: Staffing Industry Analysts, RPO Market Developments
16 RPO Services Adoption RPO Services Adoption (share of RPO clients who adopt) Talent Pool Management & Reporting External Labor Market Data & Benchmark Service Internal Moves Onboarding Diversity Program Support Assessments & Testing Career Site development & branding services Vendor Management (where using suppliers/agencies) Integrated Workforce Planning (Contingent & Permanent) Interviewing Performed by RPO Provider Strategic Workforce Planning Video CV's, Video Interviews Gamification Services 2% 10% 24% 60% 56% 50% 43% 43% 39% 38% 72% 90% 87% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Staffing Industry Analysts, RPO Market Developments
17 Geographic Scope RPO Geographic Scope of RPO Programs (% share of market) 20% Single country client scope Multi country client scope (up to two regions) Servicing the client in 3 or more regions 24% 53% Source: Staffing Industry Analysts, RPO Market Developments
18 RPO Provider by Region PeopleStrong The Curve Group Fircroft Capita Resourcing Solvus Hays Alexander Mann Solutions Hudson ManpowerGroup Solutions Singular Korn Ferry Futurestep IBM Kenexa Allegis Global Solutions WilsonHCG Seven Step RPO Pontoon Cielo Agile 1 ADP RPO PeopleScout Personify Superior Group AMN Healthcare CBI Group 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Americas South America Europe Middle East & Africa Asia Source: Staffing Industry Analysts, RPO Market Developments
19 Considerations for Global RPO One global or multiple RPO solution providers engaged Potentially different regional solution models One global management enabling technology platform Multi-phase rollout recommended.capture a win and build on it
20 Service Blending RPO Services Blending (share of RPO market) 9% 5% RPO Only Service Scope RPO Services Blended with MSP Services RPO Service Blended with HRO Services 86% Source: Staffing Industry Analysts, RPO Market Developments
21 Engagement Scope Total v Partial 15% Ongoing v Project 41% 59% 85% Servicing 100% of an enterprise Servicing part of an enterprise (e.g. division or country) On-going RPO Project RPO Source: Staffing Industry Analysts, RPO Market Developments
22 Key Performance Indicators Time to Hire Cost per Hire Source of Hire No. Candidates per Hire Candidate Satisfaction Year Retention Offer Acceptance Hire Ratio Application Completion Rate Hiring Manager Satisfaction Vacancies Vs. Positions Filled Diversity Talent Pipeline Growth Employer Branding Cold Outreach ( Response Rate) Net Company Growth Social Engagement Quality of Hire Source: Staffing Industry Analysts, RPO Market Developments
23 Measuring Quality Quality of Hire (%) = (Job Performance + Ramp-up Time + Engagement + Cultural Fit)/N Overall Quality of Hire (%) = [Avg. Quality of Hire score + (100 Turnover Rate)]/2; or Overall Quality of Hire (%) = (PR + HP + HR)/N PR = Average job performance rating of all new hires HP = % of new hires with acceptable ramp-up time within acceptable time frame HR = % of new hires retained after one year N = Number of hires
24 Contract Sizes RPO Contract Size and by Buyer FTE Size (%) 5% 4% Over 10,000 Employees (FTE) 5,000-9,000 Employees (FTE) 17% 2,000-4,999 Employees (FTE) Less than 2,000 Employees (FTE) 74% Source: Staffing Industry Analysts, RPO Market Developments
25 RPO by Industry Sector 20% Share of Market (by Revenue) 10% 0% 16% 15% 9% 7% 7% 6% 6% 4% 5% 3% 2% 2% 2% 2% 1% 1% 1% 1% 10% Source: Staffing Industry Analysts, RPO Market Developments
26 RPO Pricing Models RPO Common Pricing Models (%) 2% 20% Cost per Hire Fixed monthly Blended Fixed and Per Hire Delivery FTE 15% 64% Source: Staffing Industry Analysts, RPO Market Developments
27 RPO Pricing Models 100% 80% 60% 40% RPO Provider Pricing Models (%) FTE Based Blended Fixed Monthly Cost per Hire 20% 0% Source: Staffing Industry Analysts, RPO Market Developments
28 Delivery Models Onsite v Offsite Ongoing v Project 25% 14% 28% 81% 26% 31% Offsite Delivery Onsite Delivery Onshore - client site or remote worker Onshore - service center Nearshore Offshore Source: Staffing Industry Analysts, RPO Market Developments
29 Technology RPO Provider ATS Utilization (%) 19% 14% 7% 14% Own RPO Proprietary ATS Avature Lumesse igrasp Peoplefluent Oracle/Taleo Successfactors Other 8% 8% 10% Source: Staffing Industry Analysts, RPO Market Developments
30 Technology Used to Support RPO Technology % of Respondents Talent exchanges -social networks (e.g. Linkedin, Facebook, etc) 91% Talent exchanges -external job boards (e.g. Monster, CareerBuilder, etc) 89% ATS (VMS not integrated) 74% Your own career site/job board 70% Skill/personality assessment systems (e.g. DDI, SHL Previsor, etc) 63% Background checking systems (e.g. HireRight, Talentwise, etc) 61% Sourcing/talent community platforms (e.g. Avature, jobs2web, etc.) 50% Candidate onboarding systems (stand alone or part of ATS) 48% Resume/CV parsing and analysis systems (e.g. Daxtra, BurningGlass, etc) 48% Technology systems to manage recruiters (other than ATS) 46% Video interviewing systems (e.g. HireVue, InterviewStream, etc) 46% Sophisticated internal business intelligence/analytics (e.g. microstrategies) 41% VMS (ATS not integrated) 41% ATS (VMS integrated) 35% External market analytics (e.g. Wanted Technologies) 35% VMS (ATS integrated) 33% ATS to talent exchange connection systems (e.g. Jobg8, Tribepad, etc) 22% Source: Staffing Industry Analysts, RPO Technology
31 Recruitment Process Outsourcing (RPO): The State of the Industry Market Overview Market Trends Best Practices
32 RPO Trends The Rise of Sourcers with sourcing approaches tailored to the market Expert: where pipelining and talent mapping techniques are more actively used Skilled few: where employer branding, talent pooling, continuous engagement and referrals are more actively used Talented many: where volume based recruitment such as running campaigns, events alongside employer branding and talent pooling are more actively used
33 RPO Trends The Candidate is King Focus on understanding candidate preferences and improving candidate experiences to ensure minimal drop-out rates Candidate experience and quality of hire metrics increasingly important compared to traditional hiring metrics such as time-to-hire, especially for hard-to-find roles
34 More Job Openings than Hires (This is Unusual) Sources: Staffing Industry Analysts, US Department of Commerce, US Bureau of Labor Statistics
35 RPO Trends Technology Enhancements and Big Data Greater sophistication in the use of assessment and matching technology measuring personal and cultural fit RPO s starting to leverage predictive analytics Recruitment marketing technologies supported on mobile and social to source both active and passive candidates Video interviewing, gamification and candidate CRMs allowing new ways to engage with candidates and increase hiring success rate.
36 RPO Trends Strategic Talent Acquisition Partner to Strategic Talent Management Partner Employee retention Internal transfers Succession planning Leadership training Source: Intuit
37 Multichannel Recruitment Strategy Internal Social Media Referrals 7% 6% 6% 8% 17% Agency Job Boards Headhunted 7% Events 28% 21% Career Website 17% of all candidates visit career website after booking a hotel room Source: Booking.com
38 RPO Trends Total Talent Acquisition Source: Staffing Industry Analysts
39 Total Talent Acquisition TTA THE BLENDED MODEL Source: Staffing Industry Analysts
40 RPO Trends RPO Market Consolidation (M&A since 2014) Date Acquirer Country Acquiree Country May 2017 Deliveroo UK Maple USA Dec2016 Yoh Group USA DreamJobs USA Dec 2016 Cross Country Healthcare USA US Resources Healthcare USA June 2016 Intouch Relocations UAE Cielo's Mobility Division UK Jan2016 Orion International Consulting USA NovotUSA USA Jan 2016 PeopleScout Inc. (TrueBlue) USA RPO Business of Aon Hewitt UK Dec 2015 Capita (CPI: LSE) UK Work Group plc UK Aug 2015 CDI Corp USA ScaleneWorks India June 2015 MBA UK HB Resourcing UK April 2015 WilsonHCG USA Head2Head Canada Oct 2014 USG People Netherlands Netwerven Netherlands Sept 2014 Seven Step RPO USA BlueGlue UK April 2014 WilsonHCG USA CPH UK Feb 2014 Seaton USA HRX Australia Source: Staffing Industry Analysts M&A Database
41 Recruitment Process Outsourcing (RPO): The State of the Industry Market Overview Market Trends Best Practices
42 Getting Started Research market Define strategic objectives Build a business case Identify an internal champion Commit to partnership Implement Discovery Design Test Launch Stabilize Continuously improve
43 Critical Steps to RPO Program Success Fit-forpurpose Service Scope Establish Capability Scalability & Agility Visibility and Control Culture for Innovation Strategic Partnership
44 Closing Considerations What talent acquisition issue(s) are you trying to address? What capabilities do you already have to address them? How do you blend your strengths with others to create a competitive, talent acquisition, advantage to address them?
45 Two Easy Ways to Give Feedback Rate sessions on the Conference Community (all sessions) Fill out the Evaluation Card on your chair (concurrent sessions)
46 Coming Up Networking Lunch & Exhibits Open 12:30-1:45 PM Dallas D-H
47 After Lunch Concurrent Sessions 1:45 PM Making the Most of Your Supply Base Supplier Optimization Strategies Dallas A Integrating Your HRIS (Workday) with Your VMS: Lessons Learned the Hard Way Dallas B Beyond Talent Artificial Intelligence and Robotics Dallas C Legal Issues That Matter Trinity 2 3
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