Opportunities for recruitment process outsourcing in a changing HRO market (Strategic Focus)

An in-depth examination of the trends associated with the recruitment process outsourcing market, which is the fastest growing sector of HRO. Examines what the impact of a slowing economy could have on RPO, opportunities for global RPO contracts and use of offshore delivery.

Report Highlights
Datamonitor estimates that the RPO market will be worth $880m in 2008 and has the potential to become a multi-billion dollar market.

Many RPO vendors are reticent to use offshore services, especially for work which involves direct contact with client or candidate, but increasing competition and focus on cost will increase pressure to use low-cost locations.

Quality of candidate is the key driver for RPO, but in a worsening economy, pricing pressure will increase as customers look for short term cost reductions.
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OVERVIEW 1
Catalyst 1
Summary 1
KEY MESSAGES 2
RPO is growing rapidly and has the potential to be a multi-billion dollar market 2
The current economic climate may slow RPO growth but will not halt its rise 2
Offshore delivery will become increasingly important despite vendor reticence 2
Vendor consolidation will continue 2
Global RPO deals will come only if vendors invest in global delivery first 2
4
Table of figures 5
Table of tables 5
MARKET OPPORTUNITY 6
RPO is one of the fastest growing sectors of business process outsourcing 6
Defining RPO 9
Types of vendors 10
Vendor consolidation 11
Customer demand 12
Vertical demand 12
Geography 12
Size 12
Contract profile 13
Length 13
Scope of services included 13
Geographic scope 13
Trends in RPO contract pricing 13
Customer savings using RPO 13
Evolution of HRO 15
CUSTOMER IMPACT 17
Key customer benefits of RPO 17
Key concerns for customers: 17
Vendors need to establish trust and partnership reputation 18
Customers need assurance of short term benefits 18
Can RPO go global? 19
Offshore delivery 20
Threats to RPO 21
RPO in an economic downturn 21
Execution of RPO 21
Low barriers to entry 22
COMPETITIVE LANDSCAPE 23
Adecco 23
Alexander Mann 23
NorthgateArinso 23
Futurestep 23
Hyrian 24
Kelly HRfirst 24
Kenexa 24
Manpower 24
Momentum 25
Pinstripe 25
Spherion 25
Talent Fusion 25
The Right Thing 25
TWC Comsys 26
Veritude 26
GO TO MARKET 27
Recommendations 27
Innovation is required in structuring contracts to assure quality for clients 27
Vendors need to develop a reputation for flexibility, trust and partnership 27
Vendors need to go beyond recruitment to become essential to the client 27
Vendors need to develop agility to scale to demand while keeping pricing on a variable model 27
'Knowledge' verticals to continue to offer strong opportunities 27
Vendors need to balance recruitment, process and technology expertise 28
APPENDIX 29
Definitions 29
Methodology 29
Further reading 29
Ask the analyst 29
Datamonitor consulting 29
Disclaimer 29
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Table 1: Estimated RPO market by geography (2007, 2008) 7
Table 2: Acquisitions by or of RPO vendors in last 12 months 11
Table 3: Publicly announced RPO contracts in 2008 14
Figure 1: Estimated RPO market by geography (2007, 2008), $m 7
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