Key Findings & Highlights:

The Recruitment Process Outsourcing (RPO) market remains strong in 2016, though organization’s will continue to have challenges recruiting top talent for skilled positions, due to an aging workforce and shortage of qualified workers. As talent shortages continue in key positions, talent analytics will be used in the recruiting process to target top talent.

The ability to meet business demands for growth is the top driver for RPO. Cost reduction  is still a consideration, especially for first generation buyers, but the ability to scale up to meet the hiring demands required to support business growth has become the biggest challenge. First time RPO organizations look to take out agency costs and seek improved quality of hire and speed to hire. Accordingly, RPO is the fastest growing service within HR outsourcing. RPO helps organizations increase their focus on talent quality and agility in addition to providing cost reduction. RPO vendors can also assist in addressing technology challenges including mobile recruiting.

Acquisitions have continued, mostly by U.S. and U.K. organizations to support increasing global recruiting requirements and expand service offerings. Approximately 45% of vendors made acquisitions or integrated other business lines in 2015, to support global expansion and provide wider offerings including talent management services.

Significant contracts thus far in 2016 include:

• ManpowerGroup Solutions awarded a three-year, $300m RPO contract extension by Australian Defence Force. ManpowerGroup will manage the entire recruitment process, from marketing, recruiting operations and medical and psychological assessments to the coordination of selection boards and employment offers.