Recruitment Process Outsourcing (RPO) Seeing Interesting Dichotomy of High Adoption but Diluted Growth

Everest Group Study: RPO Market Projected to Grow 12-1% in 2013

DALLAS, March 20, 2013 - The Recruitment Process Outsourcing (RPO ) market is projected to grow 12-17 percent in 2013 following the market’s significant slowdown in 2012 due to a dramatic decrease in hiring volumes, according to a new research study by Everest Group, an advisory and research firm on global services.

The RPO market growth slowed to about 12 percent in 2012 and is currently estimated at about US$1.5 billion in annual contract volume (ACV), according to Everest Group’s report, Recruitment Process Outsourcing Annual Report 2013: Dichotomy of Market Exuberance and Subdued Economy . On the other hand, new buyers continue to enter the market at a rapid pace and the market grew by around 50 percent in terms of new deal signings in 2012.

"A significant increase in new RPO deal signings in 2012 had the potential to contribute 25 percent to the market size assuming deals were similar in size in terms of annual hires as in previous years, but the slowdown in hiring sapped the market," said Rajesh Ranjan, vice president, Everest Group. "Decreased hiring activity affected sizes of both new and existing RPO contracts, thus impacting the overall growth of the market. Despite the economy’s negative affect on the RPO market, buyer interest remains strong, so it stands to reason the RPO market will regain its more aggressive growth pattern when hiring returns to more normal levels."

Other report insights about the RPO market include:

• Continental Europe and Asia Pacific witnessed a large surge in new deal activity, while the more mature North American and United Kingdom markets settled into a more steady growth pace.
• Strong contract activity in Europe and Asia Pacific lead to a decrease in North America’s dominance over the RPO market.
• RPO drivers differed across regions, posing different challenges and necessitating differing solution elements.
• After rapid growth for two years, adoption of multi-country RPO was moderate in 2012.
• Mid-market companies increased adoption in recent times, signaling RPO is no longer a large market play.
• The competitive environment remains intense with several providers competing fiercely to gain market share but clearer segmentation based on value proposition is starting to emerge.

The research report was based on analyzing over 900 RPO deals and executive level interviews with several RPO buyers and service providers. Service providers covered in the report include Accenture, Advantage xPO, Alexander Mann Solutions, Allegis Group Services, Aon Hewitt, Capita Resourcing, Futurestep, Hays, Hudson, IBM Kenexa RPO, KellyOCG, Kenexa, ManpowerGroup, Neeyamo, Ochre House, PeopleScout, PeopleStrong, Pinstripe, Pontoon Solutions, Randstad Sourceright, Resource Solutions, Talent2, The Right Thing, Wilson HCG and Yoh.

For more information about the report, Recruitment Process Outsourcing Annual Report 2013: Dichotomy of Market Exuberance and Subdued Economy , other RPO or Human Resources Outsourcing reports, or other research services, please visit www.research.everestgrp.com, e-mail info@everestgrp.com or call +1-214-451-3110.

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