RPO set to be a big winner of the talent shortage

The talent shortage is a complex topic…

‘Gap’, ‘vacuum’, or ‘starvation’ – call it what you will, the shortage of talent is a widespread and complex issue to which there are no easy answers:

• Legislators – If you are a policymaker, it’s a structural economic weakness.
• Business leaders – If you are trying to run and grow a business of any size, it’s a major barrier to expansion.
• Recruiters – If you are a recruiter, then it just may be an opportunity!

During and in the immediate aftermath of Covid, many workers disappeared from payrolls. Some burned out, retired early, or gave up work because of long Covid or mental health issues. Others encountered economic or personal issues such as the affordability of childcare, or the need to care for sick relatives.

Overcoming such problems and attracting workers back to their old trades is only a partial solution, and in many cases, it is only for the short term. Some specialist skills take years to fully train and develop and you cannot magic up thousands of experienced workers out of the blue.

Despite the complex nature of the topic, one thing we can say about the shortage of talent is that it is an opportunity for the recruitment industry. One of the big winners are firms that specialise in the Recruitment Process Outsourcing (RPO) business model.

550% growth of the RPO market expected by 2031

RPO is experiencing a period of sustained growth because of the global talent shortage. As businesses struggle to find qualified employees, they are turning to RPO providers to help them meet their recruiting needs.

The RPO business model provides clients with a number of compelling benefits, including:

• Access to a global talent pool – RPO providers may have access to a global talent pool, which helps businesses find qualified employees who may not be available locally.
• Experience and expertise – RPO providers have experience and expertise in recruiting, which can help businesses save time and money.
• Scalability – RPO providers often scale their services to meet the needs of businesses of all sizes.
• Cost-effectiveness – RPO may be a cost-effective solution for businesses that are looking to outsource their recruiting needs.

According to a report by Allied Market Research, the global recruitment process outsourcing industry was valued at $4.8 billion in 2021 and is estimated to generate $26.4 billion by 2031, an increase of some 550%, and with a CAGR of 19.1% from 2022 to 2031.

As well as the global talent shortage, the growth of RPO is being driven by a number of other factors, including:

• The increasing complexity of recruiting – The increasing complexity of recruiting is another driver of RPO growth. Recruiting has become more complex in recent years, due to the rise of social media, the need for compliance, and the need to attract and retain top talent. RPO providers can help businesses with all aspects of the recruiting process, from sourcing candidates to onboarding new hires.
• The need for businesses to focus on core competencies – The need for businesses to focus on their core competencies is another driver of RPO growth. Businesses are increasingly looking to outsource non-core functions, such as recruiting, in order to focus on their core competencies. RPO can help businesses save time and money, and it can also help them to improve their recruiting results.

The RPO opportunity knocks!

The nature of the recruitment trade is highly entrepreneurial, and there is a strong tradition of startup, breakaway and pivoting activity in the industry.

Entering the RPO market is a challenging task, but with proper preparation, it is not unachievable. Here are some steps that will support your ambitions to get your recruitment business into the RPO market:

• Conduct Market Research – The first step is to perform thorough research of the RPO market. You need to understand the market, the key players, and their services. Ideally, you need to identify any gaps in the market that your business can target.
• Assemble a Strong Team – RPO requires a team with the appropriate expertise and experience in recruitment and HR. Build a team of skilled professionals with the right expertise in RPO to blend with and complement those who perform the basics of the search and selection process, from sourcing candidates to screening and interviewing.
• Develop a comprehensive service offer – Create a comprehensive suite of services that you can offer to your clients. This should include everything from candidate sourcing to onboarding, as well as other value-added services such as workforce planning and employer branding.
• Seek to establish partnerships – Establish partnerships with technology providers, sourcing firms, and other organisations that can help you deliver your services more efficiently and effectively.
• Leverage technology – RPO frequently requires the use of technology to streamline the recruitment process. Invest in recruitment technology solutions such as applicant tracking systems, AI-based tools, and other HR technologies.
• Create a strong marketing strategy – Develop a marketing strategy that clearly messages the benefits of RPO, and how your business helps clients reduce recruitment costs, improve the quality of hires, and enhance their overall hiring experience.
• Monitor performance metrics – Establish performance metrics to monitor the success of your RPO services. Metrics can include cost per hire, time to fill, quality of hire, and candidate satisfaction.

By following these steps, you can position your recruitment business to enter the RPO market and provide a valuable service to clients looking to outsource their recruitment needs.

Back Office Processing Optimisation (BOPO!) with ETZ

ETZ’s leading ETZ’s leading timesheet and invoicing solution streamlines the back office processing of your recruitment agency. Our complementary solutions, ETZ Comply for onboarding and document management, and Caspian for business intelligence, give agencies further capability to streamline and uncover opportunities. To find out more, call us on +61 (0) 405 458 821 or book a demo.