The RPO Market
I spent the day at the RPO Summit in Las Vegas. Put on by SharedXpertise, the event brought together about 150 members of the RPO industry, buyers and sellers alike. The audience was a 50/50 blend of providers and customers.
The RPO business, like it’s larger sibling in HRO, is in it’s early adoption phase. This means that everyone in the business is talking about tools, techniques and processes. There are few standards and the industry is in a wonderful combination of growth and learning.
By growth, I mean that things are flat, year over year. (That’s a joke) The real growth in the business comes as the various players work out the kinks of having this type of a relationship. Generally speaking, Outsourcing your Recruiting Process involve a series of predictable but surprising opportunities for personal growth. They are predictable from a top level perspectve but surprising in each individual case. (Think about trying to explain having children to a single person or puberty to a six year old).
While the rest of the organization learned about contract administration, program management, project management and requirements development, HR managed to avoid management mordernization. The RPO/HRO trend is simply the predictable consequence of Total Quality, re-engineering and globalization.
The trick is finding a common language with which to discuss the problem.
Although over 1300 firms claim to be in the RPO business, the vast majority of those are old school staffing and search companies experimenting with new pricing models. Meanwhile, the real RPO providers are in the process of redefining the whole talent management function.
It turns out that you can’t really separate recruiting, onboarding, organizational improvement and market agility. For years, we’ve had the luxuryof seeing hiring as a transactional discipline (one hire at a time). As RPO providers move into their vclients, they discover that real business results come from an involvement that is far broader than just hiring.
The RPO industry is devoting a lot of time to reinventing the wheel. Acqusition processes and procedures, even for large scale problems, have been finely honed in the government, military, large scale engineering, computer manufacturing and other industries. The members of the RPO community seem oblivious to the institutional wisdom available from looking outside of the silo.
That criticism aside, the community is really tight knit. Although social media doesn’t seem to have made inroads (I had the hashtag #rposummit virtually to myself), shared expertise in the issues associated with startup and integration is beginning to develop.
It’s easy to see that there is a good deal of work to be done before RPOs go mainstream. This year, there will be an uptick in demand for a simple reason. As the economy stays flat (at best), companies will come to understand that internal management of processes does not create value. Once its a process, it can be outsourced.
The opportunity comes from the fact that the boundaries of the process are still being defined. As one panel member noted, "We’re stumbling our way into the right answer." As long as that’s the case, it’s an early adopter market.
