Fully 79 percent of companies report that they have skills gaps that are difficult to close and most say they don’t understand how to solve this problem, according to 2017 research from Aberdeen. “More than half of companies lack the insights needed to improve the quality of their talent pipeline,” said Aberdeen analyst Zach Chertok. And they are turning to recruitment process outsourcing to fill that gap.
The $5 billion recruitment process outsourcing market is set to grow more than 14 percent per year through 2025 as these vendors expand their offerings and provide more integrated solutions to help companies tackle their talent acquisition challenges. But these vendors can’t rely on the same old solutions to win business, said Stacey Cadigan, principal consultant for Information Services Group, a market intelligence firm. “Technology is playing an increasingly important role in the RPO solution.”
The increasing pressure to shorten time to hire and to find highly skilled candidates for specific hard-to-fill roles is driving a lot of interest in the RPO space, said Chertok. “Companies recognize the need for more sophisticated recruiting solutions, and they are looking to their RPO vendors to deliver it.”
That’s forcing RPOs to adapt or lose market share. “We need to deliver smarter, faster recruiting, and automated technologies are helping us do that,” said Neil Griffiths, vice president of brand marketing for Korn Ferry Futurestep, an RPO. Over the past few years, many of the larger RPOs have been building their own proprietary software or buying or partnering with technology firms to integrate new automated offerings at every stage of the recruiting process. Talent analytics, machine-learning capabilities, automated sourcing and candidate screening are among the leading tools to extend their platform.
Companies aren’t asking for specific technologies directly, rather they are looking for solutions to their recruiting problems, and these technologies help achieve that, Griffiths said. “When they see what artificial intelligence and social learning can accomplish, they understand the value.”
Robotic process automation is also gaining attention, as RPOs look to automate data entry, message creation and other mundane tasks, freeing their recruiters to focus on more value-added tasks. “Now a lot of them are scrambling to figure out how they can stitch it all together,” Cadigan said. Griffiths admits that this transformation to a technology-driven strategic partner is a journey. “No one has cracked the code yet but the transformation is occurring.”
They are less advanced when it comes to gig economy trends and the role RPOs play in hiring these contract workers. “It’s a big challenge for clients and RPOs,” Griffiths said. He predicts industry leaders will focus more on providing contract sourcing services in the next two years as these workers take an increasingly larger role in the workforce. “It has to be part of the solution going forward, but it won’t happen overnight.”
All of these solutions are helping RPOs achieve their long-held goal to reposition the marketplace as talent experts rather than a cheap source of labor. “RPOs don’t want to be seen as ‘outsourcers’ anymore,” Chertok said. “They are trying to espouse their value beyond recruiting to take an advisory role with their clients.”
As they integrate more technology offerings and demonstrate their strategic business value, they may finally be able to shed that mantle and establish themselves as talent partners that can help companies achieve their long-term business goals.
In the meantime, Chertok encourages companies to question their RPOs’ current service offerings, and to make sure their road map includes tools like artificial intelligence, social learning and RPA to address ongoing recruiting needs. “If they aren’t listening to your questions or can’t respond credibly to your requests, it may be time to look elsewhere.”
Sarah Fister Gale is a writer in the Chicago area. Comment below or email firstname.lastname@example.org.