RPO 3.0 – Paradigm Shift in RPO Value Proposition

27 Mar 2017

The world is changing. A prolonged period of slow growth, followed by the shift in economic power from the west to the east, is bringing about one of the biggest economic shifts since the Industrial Revolution, forcing businesses to adapt accordingly. A new and younger generation, with a very different mindset, is changing the very nature of the workforce. Further, the unprecedented and rapid advances in technology, in areas such as analytics, mobility, cloud, and automation, have disrupted the business world and how businesses run themselves. With the emergence of artificial intelligence, which is also referred as “cognitive,” this disruption is likely to be even more extreme. How businesses evolve their strategy to adapt, and even better, leverage these changes, will be the key to their success going forward; and talent, the new differentiator in the 21st century, will be one of the key pillars of this strategy.

Having the right talent, at the right time, and in the right place is paramount, especially at a time of profound change. Organizations will need to understand the larger picture / megatrends impacting the talent market and align their talent management and acquisition strategies to remain successful in the long run. The impact of talent acquisition is thus becoming more critical than ever before, and enterprises will need to invest more time and money, and most importantly expertise, to get their talent acquisition strategies right.

Unfortunately, not all enterprises have the internal expertise, bandwidth, or resources to develop a next-generation-ready talent acquisition function. External experts, with years of domain knowledge and the scale to do this, are therefore a natural choice. The Recruitment Process Outsourcing (RPO) model has been the preferred option for many enterprises, and its success in creating value for buyers is evidenced by the increasing maturity, along with rapid growth, of this market, over the last few years. The RPO market reached US$2.8 billion in Annual Contract Value (ACV) in 2016, and the market is expected to continue on a high-growth trajectory.

The rapid growth of the first phase of RPO was driven by the ability to meet key needs of buyers around the most direct and measurable benefits of RPO. We refer to it as RPO 1.0. The next phase, RPO 2.0, involved taking a holistic approach to the RPO value proposition by considering the more nuanced and granular aspects of cost and business impact. However, to create real strategic impact from RPO in these times of revolutionary transition, buyers and service providers need to transition to the next phase of RPO – RPO 3.0.

The market will need to overcome some specific challenges to realize the enhanced value proposition of RPO 3.0. This report intends to identify and articulate this enhanced value proposition. The report discusses:

  • The global shifts and their impact on the workforce
  • Imperatives for HR, especially the talent acquisition organization
  • The emergence of RPO 3.0 and how it differs from the earlier generations of RPO in terms of objectives, benefits, scope, and technology leverage
  • Challenges and best practices in realizing RPO 3.0

Membership(s)

Recruitment Process Outsourcing

 

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