Market Insights
Recruitment process outsourcing (RPO) refers to a segment of the business process outsourcing (BPO) industry wherein an organization’s entire or partial recruitment tasks are transferred to a third-party vendor. The RPO services offered by the vendors primarily include candidate screening, offer execution, job posting, and other important activities in the recruitment process. RPO should not be confused with staffing services, in which case the former includes proficient management of recruitment processes and responsibility for results.
RPO enables the client organization to focus on its core businesses with substantially reduced overheads. The recruitment process outsourcing (RPO) market is broadly segmented on the basis of engagement models and industry verticals. On the basis of engagement models, the market is segmented into on-demand and end-to-end RPO. Further, the market is segmented on the basis of industry verticals into BFSI, IT & telecommunication, IT-enabled services & BPO, healthcare, manufacturing & heavy industries, and others. The other segment primarily comprises retail, education, and utilities.
The recruitment process outsourcing market worldwide Recruitment Process Outsourcing (RPO) Market Valued At US$ 10376.9 Mn In 2022 And Is Projected To Reach US$ 133449.53 Mn By 2029, Growing At A CAGR Of 18.2%.
Recruitment Process Outsourcing (RPO) Market by Engagement Type
- On-demand RPO
- End-to-end RPO
Recruitment Process Outsourcing (RPO) Market by End-use Industry
- Banks, Financial Services, and Insurance (BFSI)
- IT & Telecommunication
- ITeS & BPO
- Healthcare
- Manufacturing & Heavy Industries
- Others (Retail, Education, Utilities, etc.)
Purpose of the Report
The purpose of this strategic research study titled “Global Recruitment Process Outsourcing Market- Growth, Share, Opportunities and Competitive Analysis, 2022 – 2029” is to offer industry investors, company executives, and industry participants in-depth insights to enable them to make informed strategic decisions related to the opportunities in the global recruitment process outsourcing market.
Target Audience
- Industry Investors
- Recruitment Process Outsourcing Vendors
- HR Outsourcing Vendors
- End-users
Overall, the research study provides a holistic view of the global recruitment process outsourcing market, offering market size and estimates for the period from 2022 to 2029, keeping in mind the above-mentioned factors.
Engagement Model Segmentation Analysis
Based on the engagement models, the global recruitment process outsourcing (RPO) market is segmented into the following categories
- On-demand RPO
- End-to-end RPO
In 2021, the global recruitment process outsourcing market was dominated by the on-demand engagement model segment. The segment accounted for a market share, in terms of revenue, of more than 3/4th of the total market worldwide. On-demand engagement model includes a partial transfer of the recruitment processes to a third-party RPO vendor. This enables the client organization to have the necessary control over their recruitment process along with a reduction in internal costs. The on-demand engagement model is the most preferred type of engagement due to its flexibility, scalability, and low cost.
Another major factor responsible for the dominance of the on-demand RPO segment is the hesitance of business organizations toward RPO. Most organizations are hesitant about transferring all of their recruitment processes to the RPO vendor. Thus, the segment is expected to retain its dominant position in the market in the coming years. Nevertheless, with growing adoption and confidence in RPO service, the demand for end-to-end RPO is expected to soar substantially in the coming years. The end-to-end RPO model comprises the entire service package, including all of the recruitment processes of any organization. This enables the client organization to transfer their entire recruitment processes to the RPO vendor, thereby focusing on their core business operations.
Recruitment process outsourcing (RPO) is among the most promising emerging industries in the recruitment sector. It refers to a segment of business process outsourcing wherein an employer (client organization) hands over all or some of their recruitment processes to an external service provider. Recruitment process outsourcing should not be confused with staffing which simply includes recruiting, positioning, and overseeing the employees in the client organization. On the contrary, RPO service providers work along with their client organization’s recruitment process as a whole. Another significant difference is the RPO service provider bearing the responsibility for their recruitment results. Additionally, rather than promoting its own brand, an RPO service provider focuses on endorsing its client’s brand, which in turn becomes beneficial for its client.
RPO service providers may offer the following recruitment processes to their clients:
- Job analysis
- Candidate sourcing
- Recruitment process mapping
- Recruitment training
- Recruitment/technology consulting
- Third-party vendor management
The recruitment process outsourcing market has been in existence since the early 2000s, with major service adoption in the U.S. The concept of RPO hails from the human resource outsourcing (HRO) service, which was introduced in the early 1980s. The most prominent services offered by the HRO companies were taxes, benefits, and payroll handling. However, business organizations still face the challenges of cost as well as difficulty in hiring skilled personnel. In the course of time, as business organizations started shifting more towards outsourcing their processes, the idea of recruitment process outsourcing gained momentum. Initially, RPO service only included gathering a list of suitable candidates from the RPO vendors. This, however, did not help many organizations in reducing their overheads. With increasing competition in the labor market, a significant number of business organizations started outsourcing their recruitment processes to RPO vendors. As a result, the market for recruitment process outsourcing has witnessed substantial growth worldwide in the past few years. Due to lower costs coupled with the service’s credibility, the demand for RPO is expected to rise extensively in the coming years.
On the basis of the engagement model, the most popular models considered under the scope of this report are:
- On-demand RPO
- End-to-end RPO
On-demand RPO refers to an engagement model wherein the client organization transfers some of its recruitment processes to the RPO vendor. This is the most flexible mode of engagement with minimal cost. As per the term, the RPO vendors extend service to their clients depending upon the requirement. On the other hand, the end-to-end model comprises outsourcing the entire recruitment process to the RPO vendor. Currently, the on-demand RPO model accounts for the largest share, in terms of revenue and adoption, worldwide. Although RPO has become popular enough for business organizations across the globe, most of these organizations still prefer outsourcing part of their recruitment processes to RPO vendors. Due to hesitance toward outsourcing the entire process, the solution is less popular. Nevertheless, with the increasing adoption of outsourced services globally and reduced costs, the demand for the end-to-end RPO model is expected to surge substantially in the coming years.
The global recruitment process outsourcing (RPO) market is segmented, on the basis of geographical regions, as per the following regions and countries.
North America
- The U.S.
- Rest of North America
Europe
Asia Pacific
- Japan
- China
- India
- Australasia
- Rest of Asia Pacific
Rest of the World
- The Middle East and Africa
- Latin America
In 2021, the global recruitment process outsourcing (RPO) market was dominated by North America, accounting for over 40% of the total market revenue. North America is among the first adopters of RPO services with strong penetration in small and medium as well as large enterprises. Additionally, due to the presence of a large number of major RPO vendors in the region, North America is predicted to hold its dominant position in the global market throughout the forecast period.
Further, Europe accounts for the second-largest share of revenue in the global RPO market. The market growth is mainly driven by countries such as the U.K., Germany, France, and the Netherlands. Russia is among the most promising markets for RPO in Europe.
Asia Pacific is expected to emerge as the highest-growing market for RPO services in the coming years. The RPO market is largely dependent upon regional economic growth and the labor market. Countries such as China, India, and some Southeast Asia countries are promising economies with large labor markets. Thus, the RPO market growth is largely expected from these countries in the coming years.
On the basis of industry vertical, the recruitment process outsourcing (RPO) market is categorized into the following verticals:
- Banks, Financial Services, and Insurance (BFSI)
- IT & Telecommunication
- IT-enabled Services (ITeS) & Business Process Outsourcing (BPO)
- Healthcare
- Manufacturing & Heavy Industries
- Others (Retail, Education, Utilities, etc.)
The global recruitment process outsourcing market was dominated by the IT & telecommunication industry segment in 2021. The segment accounted for a market share, in terms of revenue, of more than one-fourth of the total market. IT & telecommunication is among the most vibrant industries in terms of recruitment behavior. With the presence of a large number of companies in the industry along with high competition among the candidates, most companies are turning towards adopting RPO solutions with the aim of achieving productive recruitment. Additionally, IT companies are among the first victims of economic downturn consequences and hence constantly put in efforts to reduce their overheads. As a result, many companies are now adopting RPO services rather than having an internal panel. Thus, the segment is estimated to retain its dominant position in the market throughout the forecast period. ITeS and BPO segment accounts for the second largest share in terms of revenue and is expected to retain their position during the forecast period. Further, the healthcare segment is expected to emerge as the fastest-growing segment, in terms of RPO adoption, in the coming years. Penetration of RPO in healthcare is mainly expected from the U.S., Southeast Asia, and Middle East countries.
