Many companies are trying to integrate business with technology solutions to reduce costs and improve productivity and innovation The Technavio market research study covers the present scenario and growth prospects of the global recruitment process outsourcing market for 2017-2021. The report segments the RPO market by services into multi-country recruitment process outsourcing (MCRPO) and blended RPO solutions, of which the blended RPO solutions market accounted for over 58% of the market during 2016.
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Market analysts at Technavio, a leading global technology research and advisory company, highlight the following three market drivers which are contributing to the growth of the global recruitment process outsourcing market:
- Increased usage of neo-sourcing
- Emergence of nearshore outsourcing destinations
- Moving up HR value chain and compliance
Increased usage of neo-sourcing
To improve both innovation, productivity and to reduce costs, many companies are trying to integrate business alongside technology solutions. The integration of IT outsourcing and BPO, termed as neo-sourcing, is an evolution of BPO models offered by outsourcing companies. Neo-sourcing is the combined management of back-office operations and technology for process reengineering, which would result in business transformation and optimization.
Lead Analyst at Technavio for IT professional services research, Amit Sharma, says, “Benefits of neo-sourcing technology include process optimization, cost reduction, access to the best global practices, improved productivity, increased employee morale, and reduced cycle time. Suppliers visibly shift toward automated BPO operation, allowing service providers to improve their sustainability in the market.”
Emergence of nearshore outsourcing destinations
Companies in Europe prefer outsourcing their business process to BPOs in the same region. Outsourcing to nearshore destinations allows the companies to leverage the similarities in culture, time zone, and languages, helping them deliver better services. Furthermore, European companies focus on protecting their outsourced businesses and on minimizing socio-economic risks through similar kind of currency and regulation systems.
Accessibility to certain key technologies such as recruitment software, cloud computing and domain experts in HR and industry-specific business processes has encouraged organizations to outsource the business process to other locations to gain a competitive advantage. Knowledge-based outsourcing is popular in companies located in Eastern Europe.
“A business process that can help improve the quality and efficiency of their core business is frequently outsourced, and contracts are given to those BPO providers that have expertise in that business processes,” says Amit.
Moving up HR value chain and compliance
The HR value chain is being extended by RPO providers to offer a robust structure and to significantly increase the ROI of the buyers. The global RPO market is alleviated to the higher end of the value chain with the commoditisation of outsourcing services. In this scenario, RPO has transformed itself as an enabler of innovation, simultaneously driving operational enhancements. Its strategies are being considered as the next-generation business value propositions. Although costs remain priority, clients are also looking at innovations and seeking value elements, such as enhanced functionality within their recruitment processes.
The constant changes in the employment regulations and labour laws have led employers to remain up to speed on the latest amendments that affect the workplace. Such as changes in payroll, recruitment, employee benefits, and grievance procedures which have increased the pressure for HR professionals. They outsource HR service audits and maintain company practices and policies as per the interests of the organisation.
“Therefore, to prevent major lawsuits and legal hassles, organizations outsource their whole recruitment cycle to ensure compliance with new laws and regulations,” says Amit.
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