LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the global recruitment process outsourcing (RPO) market to grow at a CAGR of close to 18% during the forecast period, according to their latest report.
The market 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 blended RPO solutions and multi-country recruitment process outsourcing (MCRPO), of which the blended RPO solutions market accounted for over 58% of the market in 2016.
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Technavio ICT analysts highlight the following three market drivers that 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
Many companies are trying to integrate business with technology solutions to reduce costs and improve productivity and innovation. 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.
“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,” says Amit Sharma, a lead analyst at Technavio for IT professional services research.
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
RPO providers are extending the HR value chain to offer a robust structure and significantly increase the ROI of the buyers. With the commoditization of outsourcing services, the global RPO market is alleviated to the higher end of the value chain. 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 the foremost priority, clients are looking at innovations and seeking value elements, such as enhanced functionality in their recruitment processes.
The constant changes in the labor laws and employment regulations have led employers to remain abreast of the latest amendments that affect the workplace. Changes in payroll, recruitment, employee benefits, and grievance procedures have increased the pressure for HR professionals. They outsource HR service audits and maintain company practices and policies as per the interests of the organization.
“Therefore, to prevent major lawsuits and legal hassles, organizations outsource their whole recruitment cycle to ensure compliance with new laws and regulations,” says Amit.
Browse Related Reports:
- Global General and Administrative Outsourcing Market 2016-2020
- Global Human Resource Outsourcing Market 2016-2020
- IT Outsourcing Market in APAC 2016-2020
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