RPO is the New VMS

Ten years ago, if you didn’t have your own little outsourcing facility in Bangalore, you were not cutting edge. The trend was outsourcing — major brands worth their name had to have a base in India. 

A decade later we see a similar caliber of change in business operations, this time with recruitment process outsourcing.  Staffing Industry Analysts data show 38 percent of buyers are using RPO, up from 30 percent a year ago and 14 percent from five years ago.

Staffing firms are responding to this demand. Giants like Manpower and Yoh announced new RPO deals last year with global companies, while others like Randstad bought SFN Group in 2011, citing SFN’s RPO expertise as basis for its acquisition, while ADP acquired The RightThing, an RPO provider.

“It’s a boom,” says Job Osborne, SIA’s VP of research and editorial, “and it’s not surprising given that firms are always looking for cheaper ways to do things using specialists.”

Specialization has won entrusting recruitment to specialists outside of HR departments. 

Labels aside, we predict RPO is the new VMS. VMS created a competitive market.  In a way, so does RPO because it replaces an internal monopoly – HR – with an outsourced plug-and-play vendor. If things are not working out, buyers of staffing services can always turn the RPO option off or choose a new provider.  It gives the organization more options.

For more from SIA experts on contingent workforce management trends, join our webinar on Jan. 22.

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