The Next Big Thing
Recruitment Process Outsourcing
Source: Nasscom
In recent times, corporate India has been crying hoarse about the “Talent Crunch” and the “War For Talent” and not without good reasons.
Recruitment Process Outsourcing is in direct response to this rising need in the industry. According to Vipul Prakash, Partner, Elixir web Solutions, an end-to-end RPO company in India, “RPO is a strategic business initiative, which improves a company’s ability in many aspects. It helps to attract, acquire, and deploy talent by bringing specialized expertise, improved focus and proven best practices to the company.” Raghuveer Sakuru, managing Director of Kenexa technologies, one of the earliest players in the RPO space, says, “The RPO segment, although still in its infancy in India, is growing rapidly. The Indian economy is seeing shortages of R&D personnel in the automotive industry, middle and senior management personnel, engineers, MBAs in niche industries such as Biotech and IT product development, and English-speaking employees for retail and call center jobs. A well planned RPO process can go a long way towards filling this void.”
Current scenario in India
Vipul Prakash of Elixir quotes the Gartner estimates of the growth of the global HRO market to $80 billion by 2008. Given the break up of the HRO pie along the different offerings, he estimates that the RPO industry in India today could well be a mammoth INR 2000 crores.
| HRO Functions |
Percentage Contribution |
| Payroll |
40% |
| |
|
| Compensation & Benefits |
5% |
| Performance Management |
5% |
| Training |
15% |
Enabling the RPO process
RPO firms have responded to the increased demands placed on them with great élan in terms of striving to provide a holistic solution to their clients. According to Asim Handa, Country Leader, Futurestep India, a global RPO firm, “RPO involves conducting a complete due diligence exercise on the client company covering their current processes, hiring practices, vendors they work with etc. this due diligence exercise takes 3-4 weeks. Subsequently, we look at the entire restructuring/remodeling of the company’s processes to make them far more efficient using proprietary software / technology. This process takes another 3-4 weeks. So, the entire process to develop an effective and efficient setup takes around 6-8 weeks, post which the actual business of hiring the right talent starts.
Spectrum of Offering
This has presented unique challenges to the complete that offer RPO solutions. Firstly, they have to battle the popular notion that RPO is synonymous with an executive search process. The realization that RPO is all that and a whole lot more is slowly but surely dawning upon the HR departments of various companies. A look at the typical functions that a RPO firm would provide to its clients is a testimonial to the maturity that the offering is fast achieving.
| Spectrum of services provided by RPO firms |
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Staffing department management services |
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On-site staffing professional support |
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Multi-channel sourcing strategy development and execution |
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Employee referral program administration |
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Process consulting & design |
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Direct recruiting services |
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Vendor management for advertising, employment and facilitation |
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Talent management/applicant tracking system |
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Behavioural & trait based pre-employment assessment |
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Skills based pre-employment assessment |
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Employee engagement measurement and retention consulting |
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Full report package & ROI measurement |
Key Benefits from an RPO Engagement
Besides the obvious advantage of feeling up time in the HR department and the engagement of a specialist for the job, some of the key benefits that clients of RPO firms have come to see are:
| Streamlined Recruitment Process |
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Reduced operational coats of talent acquisition |
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Increased talent levels and consistency |
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Expedited time to market of project teams ensuring timely deployable resources |
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Established process to achieve repeatable results |
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Measurement and tracking of effectiveness of assessment process and quality of hires towards greater accuracy in forecasting |
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Accountable and tracking of effectiveness of assessment process and quality of hires towards greater accuracy in forecasting |
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Create a variable cost structure for the recruitment function |
Most vendors claim that they can help their clients achieve 15%-20% returns on their investment in RPO. This would of course be over and above the other significant benefits mentioned above.
The Indian RPO story is just beginning to emerge if global trends are anything to go by. This is the reason that almost all the global majors in this arena like, Futurestep, the RPO subsidiary of Korn/Ferry international, Manpower Inc, Adecco, Kenexa, Talent Fusion, Spherion, Os2i have made a beeline for India.
“Gartner estimates the growth of the global HRO market to $80 billion by 2008”
“Most vendors claim that they can help their clients achieve 15%-20% returns on their investment in RPO”
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