Permanent Recruitment
Market, Supplier, Risk and
Competitive Intelligence

Industry Outlook & Drivers

Global Permanent Recruitment Market Insights

• The recruitment market size is forecasted to grow at CAGR of 16-18 percent to reach ~$400 billion by 2020
• US has highest market maturity followed by UK and then Western Europe. In APAC, countries like Australia and Japan contributes moderately in the recruitment market. Other countries in APAC and Western LATAM and eastern Europe are driving the demand for recruitment services such as RPO and Executive search in upcoming years

Global Permanent Recruitment Market Maturity

• Market intelligence in recruitment reveals that North America and Europe are mature markets in terms of buyers and service providers. The outsourcing of recruitment services is high in North America and Western Europe
• APAC and LATAM are witnessing increasing adoption due to the efforts by large global buyers to consolidate supply base

Recruitment Market Intelligence: Global Recruitment Process Outsourcing Industry Trend

The global RPO industry has been increasing significantly, with 16 per cent growth from 2013 to 2019, and emerging economies are expected to contribute largely in the upcoming 2–3 years. Due to the increase in technology penetration, recruitment services are expected to rise by 20 per cent in 2018–2020

Adoption Rate of Technology in RPO

• RPO service providers are offering recruitment solutions and technological platforms. Companies either co-source or completely outsource technology platforms to RPO vendors. Various technology platforms exist and large companies have adopted it in the past

• While ATS helps in managing business units, compliance, hourly positions, social and candidate experience, TAM supports a complete talent database for active, as well as passive candidate profiles for future vacancies, and helps in succession planning with real-time simulations. Along with TAM systems, integrating employer branding tools with recruitment process is an emerging trend in the recruitment landscape

Supplier Innovations

• Currently, Oracle Taleo lacks superior artificial intelligence and machine learning capabilities in ATS solutions when compared to ATS start-up eco-system service offerings to small – medium companies
• Google Hire ATS is the clear market disruptor and aims to bring down the job advertisement spend incurred by employers, by integrating its Google Ads solutions. Currently, its solutions are targeted at small –medium companies only
• iCIMS, Hays, Jibe, Johnson & Johnson, FedEx, CareerBuilder, Dice, etc., are some of the early adopters in “Google Cloud Job Discovery Beta Program”

Artificial Intelligence and Machine Learning Capabilities

Resume Sourcing and Matching:

• “Matching and Filtering” feature will be an add on to ATS software. This will enable companies to source more effectively and right-fit candidate for the job position
• For example, SmartRecruiters had already announced a new product roadmap for 2017

Applicant Workflow Automation:

• ATS software is poised to grow beyond e-mail communication to candidates 
• It helps to automate all ATS related messaging activities through new communication approaches, such as job bots, chatbots, etc.

Google Hire ATS

• Besides, announcing “Google for Jobs” search engine powered with Artificial Intelligence and Machine Learning capabilities, Google launched a pilot testing “Google Hire” ATS with about 10 companies in the U.S.
• In addition to pilot testing, Google launched “Google Cloud Job Discovery Beta Program” (sister tool of Google for jobs) on Sep, 29 2017
• Market speculations suggest that Google Hire ATS software will be free-to-cheap by integrating their Google Ads services
• “Google for Jobs” business model is in similar to “Indeed – job board” in terms of service extension to clients
• In the initial stages, “Google for Jobs” search engine will partner with LinkedIn, Facebook, Monster, Glassdoor, etc

Technology Tools Adopted across Industries

• Most of the multinational companies are adopting various technology tools for recruitment purposes across geographies. There exists homegrown applications for automated reporting and analytics whereas, SAP and Oracle provides talent management suites for managing workforce
• The adoption technology solutions for recruitment is considered to be high in retail and IT industry

Adoption of the Applicant Tracking System

• Increasing adoption for technology is encouraging suppliers to adopt innovations and automated tools while hiring
• Suppliers integrating with artificial intelligence provide high decision-making ability compared to previous tools

Key Technology Trends in RPO Industry - 2018

• Artificial intelligence-aided technology tools are adopted widely by buyers for enhancing the candidate hiring process
• Integrating technology tool with their recruitment services through M&A and collaborations is one of the major supplier trends in 2019

Global RPO Drivers and Constraints

Multinational firms are restructuring their workforce to attain higher labor productivity and leverage the skillsets of the employees. In such situations, cost efficiency, higher productivity and access to better technology drives the recruitment industry across geographies.

Growth Drivers

• Cost Reduction: Outsourcing recruitment allows the companies to transfer the cost risks involved in recruitment process to the recruitment partners thus reducing cost
• Social Network Adoption: Buyers are evaluating the option of using social media to identify the potential candidates to best-fit their internal requirement. On an average, 25 – 30 percent of social tools are adopted by companies across the globe to source and advertise positions for recruitment
• Scalability:Outsourcing recruitment results in a more scalability and the ability to meet the sudden surge in manpower requirements as it is the core business of the recruitment partner
• Improving Recruitment Process: Engaging with an RPO will streamline the overall recruitment process. The RPO vendor will analyze the recruitment process to spot the where overlap, inefficiency and excessive costs occur and will device a custom recruitment process
• Access to Better Technology: The RPO vendors have readily available technology like application tracking system, CV management software that can increase the efficiency of the overall recruitment process

Constraints

Lack of Client Adoption Internally: The internal recruitment department, which is already existing might show some resistance to adopt to the new framework and processes brought in by the RPO vendor

Other major constraints are:

• Competition with internal resources
• Changing position requirements
• Unrealistic expectations about talent availability
• Change in the management from the client's side

Supplier Selection Criteria

Selecting a service provider includes an in-depth analysis of their capability for successful service delivery to the firm. Shortlisting potential supplier for a firm is derived through the supplier selection criteria.