The Present and Future of Europe’s RPO.
07/08/2008
August 7, 2008, 09:42 AM —  TEAM International — 

TEAM International offers brief overview of the most exciting European Recruitment Process Outsourcing (RPO) trends and future expectations.

In the first half of 2008 the report “Opportunities for recruitment process outsourcing in a changing HRO market” was published providing some major estimations of the global RPO market, comparing past and current trends and making predictions to future development. According to this report, in 2007 the global RPO market was worth US$720 million and was expected to grow by 22% in 2008. It is also predicted that in 2009 RPO market will surpass US$1 billion level. Although demand comes predominantly from US-based Fortune 1000 companies, the market is growing rapidly in continental Europe, the UK and Asia Pacific.

Analyzing current state of affairs with RPO in Europe, HRO Today claims that nowadays most of Western European countries face a significant labor market shortage for technical talent. This trend is expected to continue that will gradually lead to increased demand of global recruitment delivery. As estimated by HRO Today, in 2008 only 6% of the German and U.S. graduates have chosen engineering professions, while 47% of Chinese graduates have embarked on engineering courses. According to Business Wire, in Ukraine more than 30,000 IT talents arrive in the workforce each year. European employers have to work in tough competitive environment to be able to find, attract and retain the most skilled employees. This situation makes companies realize that they must put much effort to becoming industry experts to prevent having future workforce unable to meet their internal skill requirements. Another factor negatively affecting in-house recruitment success is domestic labor legislation as well as labor unions that prevent companies from building flexible and skill compliant workforce. Therefore, more Western European companies turn to consider offshore outsourcing to handle their recruitment processes.

HRO Today notes that currently Europe is facing the second wave of offshoring that embraces operations set up in such countries as Ukraine, Bulgaria and Romania. RPO itself is considered to be the hottest trend in today’s business world. European companies, following the US and UK offshoring models, anticipate from RPO transition, transformation and delivery of integrated end-to-end processes across the recruitment lifecycle in its entirety. Today’s companies have an increased demand for integrating sourcing. Therefore, companies not only tend to select an outsourcing organization to help them manage their external recruitment processes, but are also focused on finding a partner able to provide them with the full range of activities from finding a candidate through employment and retention.

Today’s recruiting and staffing in Europe undergoes a major paradigm change driven by automation that allows HR departments to focus on value-add tasks and to cut recruitment costs. Another paradigm change driver is quality. Modern recruiting companies are pitching to attract and retain the very best specialists and not just acceptable and motivated candidates as before. And the third driver is total workforce that allows HR departments to align their workforce acquisition practices with their strategic business needs.
TEAM International’s own analytical experience allows resuming that for RPO to continue growing its European market value in the short hand, vendors will have to price more aggressively, as recruitment processes will soon be regarded as the best tool for easy cost reduction within each mid-sized to multinational company.

(Sources: HRO Today < www.hrotoday.com >, Biz Community < www.bizcommunity.com >, Business Wire )

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