Is RPO vaporware?

It's been a couple of years since RPO burst onto the staffing scene. Recruitment process outsourcing took off with big fanfare and suddenly it was the next big thing after VMS for the staffing industry. Many staffing companies saw RPO as the "doppelganger" MSP for direct hire and wanted to jump on to the RPO bandwagon. Last year in SIA's survey of staffing firms, nearly 29% said they did RPO. But how has it panned out so far? 

First off, it is still not clear how big the RPO market is. It's difficult to get hard data on this and it makes me wonder if people are confusing or are feeling compelled to categorize a few direct hire transactions as "RPO."

Additionally, it looks as if the value proposition that RPO offers to buyers is not as compelling as say VMS. Our 2009 Contingent Buyer Survey data show that in 2007, 14% of buyers were using RPO; in 2008 it went up to 21%; and in 2009, it went back down to17%. Buyers' response over the years has not been overwhelming.

Maybe buyers are not so comfortable about outsourcing their overall hiring function? Having said that, I have to note maybe RPO just hit a bad patch with the recession. It's still a nascent market and as buyers are not in a mood to hire anyway, it is hard to grow in such circumstances. Maybe I should hold off judgment and give RPO another year or two to see how it evolves. What do you think?

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