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Today’s webinar                                                  Upcoming webinars
Recruitment Process Outsourcing (RPO) –                          Pricing Model Alternatives
Moving Beyond the Pioneer Stage
                                                                 Date and time:
Synopsis:                                                        March 16, 2010
Everest experts will highlight the outsourcing                   10:00a.m. CST / 11:00a.m. EST
options for RPO, key buyer adoption trends, recent
solutions and deal characteristics evolving supplier
                   characteristics,                              Speaker:
landscape, and the implications for both buyers and                Ross Tisnovsky, VP – Research, Everest Group
suppliers.




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For more information, contact Peter Bowes at pbowes@everestgrp.com

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                                    Proprietary & Confidential. © 2010 Outsourcing Center
Q&A
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                             Proprietary & Confidential. © 2010 Outsourcing Center
Introductions




        Katrina Menzigian                              Rajesh Ranjan
        Vice President Research
             President,                                Research Director
        Everest Group                                  Everest Group
        kmenzigian@everestgrp.com                      rranjan@everestgrp.com




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                        Proprietary & Confidential. © 2010 Outsourcing Center
Recruitment Process Outsourcing
(RPO): Moving Beyond the Pioneer
Stage
   g




February 23, 2010

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Contents


 Market definition and overview

 Buyer adoption and solution characteristics

 Supplier landscape

 Key takeaways




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                           Proprietary & Confidential. © 2010 Everest Global, Inc.
There are three kinds of sourcing models used for
recruitment services
                                                                                                             Scope of this study

                        Low                                        Degree of outsourcing                                    High


                       Out-tasking                          Selective/componentized                     Comprehensive
                       model                                outsourcing model                           outsourcing model

Key                       Can include one or more              Includes components of recruitment         End-to-end outsourcing of
characteristics           recruitment processes                process; can be front-office               recruitment process to the
                          Short-term project-based             (employer branding, sourcing, etc.)        supplier that includes both
                          work                                 or back-office components ( pp
                                                                                    p      (applicant     front-office and back-office
                          Typically restricted to one          tracking, offer letter management,         components
                          type of hire at a time               technology management, etc.)               Ongoing long-term
                          (e.g., executive hire, temp          Ongoing long-term (multi-year)             (multi-year) relationship
                          hire)                                relationship                               Typically includes almost all
                          Restricted to external               Can include one or more types of           types of hires
                          hires; does not include              hires for in scope component
                                                                         in-scope                         Includes both external and
                          internal hire management             Can include both external and              internal hire management
                                                               internal hire management

Consideration             The need is specific and             In some specific recruitment               The buyer wants to
for adoption              one time                             processes, buyers need expertise           transform the entire
                          Buyers want to keep                  on an ongoing basis                        recruitment function
                          direct control over the              The buyer wants to tip its toe in the      The buyer wants to expand
                          recruitment process                  outsourcing model                          the value creation beyond
                                                                                                          the “selective” model

                          Most frequently used                 Frequently used in the current             Least frequently used
Prevalence                                                     environment                                currently but gaining
                                                                                                          traction
Source: Everest Research Institute (2009)
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                                            Proprietary & Confidential. © 2010 Everest Global, Inc.
We define RPO as transfer of ownership of all or part
of recruitment processes or activities on an ongoing
basis
                                                                      Strategy
                                                                     Judgment-intensive
                                              HR                     Transaction-intensive
                                                                                                        Recruitment
                                            strategy
                                                                                                          Strategic consulting
                                   Employee relations                                                     Sourcing
                               Regulatory and compliance                                                  Applicant tracking
                                     Global mobility                                                      Screening
                               Performance management                                                     Pre-employment testing
                                        Learningg                                                         Employment offers/
                                       Recruitment                                                        selection management
                                     Compensation
                                                                                                          Background checking
                                        Benefits
                                                                                                          On-boarding
                                                                                                          Vendor management
                                         Payroll
                              Employee data management
                          HR information systems and reporting
                                 Employee contact center

For this study, we include RPO deals in which:
  A minimum of four or more recruitment processes are included
  The RPO deal is active and is at least one year in contract length
  The buyer employee size is 3,000 or more
  It is a stand-alone deal and not part of multi-process HRO deal

This study does not include “out-tasking” arrangements (typically handled by recruitment agencies, staffing companies,
or executive search firm) that are managed on a p j
                        )              g        project-by-project basis rather than through an ongoing long-term
                                                         yp j                             g       g g      g
arrangement

Source: Everest Research Institute (2009)
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                                              Proprietary & Confidential. © 2010 Everest Global, Inc.
The single process HRO market is compartmentalized
with different segments at varying levels of maturity;
recruitment is moving beyond the “pioneer” stage now
                                   pioneer
Evolution in the single process HRO market



                                                                                                                  Benefits
                                                                                                                             Payroll
                                                                                                       Employee data
                                                                                                        management
                   on
Market value creatio




                          Increasing adoption
                          Evolving specifications and
                                                                                                              Slower adoption rates; however,
                          supplier capabilities
                                                                                                              growth and scale still available
                          Increased M&A and partnerships
                                                                                                              Accepted model(s) and
                          among suppliers to expand
                                                                                                              standards
     t




                          capabilities and quicken
                                                                                                              Well-established specifications
                          time-to-market
                                                                                                              and supplier capabilities
                                                                                                              Consolidated market dominated
                        Performance                                                                           by a few players
                        management
                                                 Learning
                                        Recruitment


                             Pioneer                       Emerging rapid growth                                Reaching maturity

                                                                          Maturity

Source: Everest Research Institute (2009)
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                                                    Proprietary & Confidential. © 2010 Everest Global, Inc.

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There are multiple drivers for RPO; cost reduction and
scalability gained prominence in the current economic
environment
                                                                                                      Low        High
Business drivers     Traditional    Current           Brief case example

                                                         A New Zealand-headquartered co-operative group realized more
Cost reduction                                           than 30% cost savings through recruiting agencies consolidation
                                                         along with process reengineering in an RPO model

                                                         A leading North America Pharmaceuticals company met its
Scalability                                              fluctuating recruitment needs, typical of a pharmaceutical
                                                         environment, and hired close to 3,000 people by taking the RPO
                                                         route

                                                         Not satisfied with the recruitment services of its HRO service
Move towards best-                                       provider, a leading British defence, security, and aerospace
of-breed options                                         company moved the recruitment function to a specialist RPO
                                                         provider

Improving
I      i                                                 RPO helped a leading global communication provider to reduce
recruitment                                              time-to-hire from four months to 32 days, increase the offer
process                                                  acceptance from 30-90%, and increase the internal hiring by 20% for
                                                         its European operation

                                                         A U.S.-based national pharmacy automated the application process,
Access to better                                         built pre-screening tools to quickly identify high quality candidates
                                                               pre screening                                        candidates,
technology                                               and provided online information to hiring managers about candidate
                                                         status, and resumed banks and phone interview notes through the
                                                         implementation of a new Application Tracking System (ATS) tool and
                                                         web portal as part of RPO engagement

                                                         After a U.S.-based brewing company acquired a UK-based
                                                                 U S -based
Enhancing
                                                         company, RPO helped it launch and communicate its brand leading
employer branding
                                                         to increase in application by 50%

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                                   Proprietary & Confidential. © 2010 Everest Global, Inc.
Contents


 Market definition and overview

 Buyer adoption and solution characteristics

 Supplier landscape

 Key takeaways




                                                                                     10
                           Proprietary & Confidential. © 2010 Everest Global, Inc.
North American buyers are the leading adopters of
RPO. The adoption trend is increasing in the UK and
Continental Europe
             Buyer adoption trend by signing region
             Number of deals
             100% =                           88                             96
                   South America              7%
                                                                          16%
                       Asia Pacific          17%
                                                                           8%
             Continental Europe               3%

                                  UK         19%                          22%




                    North America            53%                          54%




                                         2006-2007                    2008-2009


Sample size: 184 RPO deals signed between 2006 to July 2009
   Source: Everest Research Institute (2009)
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                                           Proprietary & Confidential. © 2010 Everest Global, Inc.
Buyers increasingly look to expand the country
coverage in their RPO deals

             Geographic scope of RPO adoption
             Number of deals
             100% =                           85                             91
                           Global             8%                           8%
             (Multiple continents)                                                        Regional
                                             14%                          19%             (Multiple countries in the
                                                                                          same continent)




                           Local
                           L    l            78%
               (One country only)                                         73%




                                         2006-2007                    2008-2009


Sample size: 176 RPO deals signed between 2006 to July 2009
   Source: Everest Research Institute (2009)
                                                                                                                       12
                                           Proprietary & Confidential. © 2010 Everest Global, Inc.

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Large buyers are the major adopters of RPO. The
adoption in the upper end of the mid-market is
increasing
  Buyer adoption trend by size of organization
  Number of deals
  100% =                                      81                             94




                                                                          58%
               >15K employees                65%




                         8K-15K                                           20%
                                             13%
                       employees
  Mid-market               3K 8K
                           3K-8K
                                             22%                          22%
                       employees

                                         2006-2007                2008- July 2009


Sample size: 175 RPO deals signed between 2006 to July 2009
   Source: Everest Research Institute (2009)
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                                           Proprietary & Confidential. © 2010 Everest Global, Inc.
There are four technology models used in RPO with
varying degree of prevalence
                                                                                               Low       High



                                                                   Increasing role of technology in RPO offering

                                      One-to-one model                                         One-to-many model
                                                           Increasing role of technology in RPO
              Tie-and-run            Technology                     ATS                      Platform-based ATS
                                     support/                       replacement/             solution
                                     augmentation                   implementation

Brief         Supplier leverages     Supplier maintains                Implementation of a     A pre-configured,
description   existing Application   buyer owned existing              new ATS is bundled      hosted ATS solution
              Tracking System        ATS in place. Supplier            with process            owned and
              (ATS) in place to      may also provide                  outsourcing. While      maintained by the
              manage recruitment     proprietary tools that            technology ownership    supplier.
                                                                                               supplier Typically
              process. Buyer         serve as “add-ons”                resides with buyer,     offered in ‘pay-as-
              retains the            around the periphery of           supplier provides       you-go’ model with
              ownership as well as   the existing ATS to offer         upfront                 both technology and
              the maintenance of     value add services (e.g.,         implementation and      process pricing
              ATS                    tools may link to
                                              y                        ongoing maintenance
                                                                          g g                  bundled into one
                                     external job portals)                                     price

Prevalence


Technology                                                                                     Typically created and
                                  Typically not tied to any
specificity                                                                                    offered on a specific
                                specific recruitment software
                                                                                               ATS
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                                 Proprietary & Confidential. © 2010 Everest Global, Inc.
In the current environment, buyers increasingly push
for a variable pricing model to better align the hiring
cost to hiring volume
                          Pricing structure trend
                          Number of deals
                          100% =                     56                            36
                                  Other              2%                           5%
                             Fixed price            9%                            8%

                          Variable p ce
                           a ab e price            25%
                                                                                 33%




                          Base fee plus            61%
                          variable price                                         56%




                                                  2008                           2009


Sample size: 92 RPO deals signed between 2008 and July 2009
   Source: Everest Research Institute (2009)
                                                                                                     15
                                           Proprietary & Confidential. © 2010 Everest Global, Inc.
Core recruitment processes are most commonly
included in RPO deals

Inclusion of recruitment processes within RPO deals
Percentage


     Strategic consulting                                                            78


                 Sourcing                                                                            95


       Applicant t ki
       A li    t tracking                                                                        94


               Screening                                                                              98

     Employment offers/                                                                        91
  selection management

Pre-employment testing                                                             74


   Background checking                                                               76

                                                                                71
             On-boarding

                                                                              68
    Vendor management


Sample size: 184 RPO deals signed between 2006 to July 2009
   Source: Everest Research Institute (2009)
                                                                                                           16
                                           Proprietary & Confidential. © 2010 Everest Global, Inc.

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While offshoring is relatively nascent in RPO, use of
low-cost geographies does increase as RPO
engagements mature
       Use of offshoring within RPO
       Number of deals
       100% =                               53                   58                     59




                                                                                      66%
                                                                86%
       No offshore component               92%




                                                                                      34%
               Includes offshore
                                                                14%
                     component              8%

                                      Deals in 1st        Deals in 2nd           Deals in 3rd
                                         year                year                   year

Sample size: 170 RPO deals signed as of July 2009
   Source: Everest Research Institute (2009)
                                                                                                     17
                                           Proprietary & Confidential. © 2010 Everest Global, Inc.
Contents


 Market definition and overview

 Buyer adoption and solution characteristics

 Supplier landscape

 Key takeaways




                                                                                     18
                           Proprietary & Confidential. © 2010 Everest Global, Inc.
Suppliers in the stand-alone RPO market come from
different backgrounds

Pure-play RPO background                                      Contracting/staffing background




                                      RPO market
                                        space


Multi-process HRO background                                  Executive search background




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                        Proprietary & Confidential. © 2010 Everest Global, Inc.
Reflective of the market maturity, the RPO market
continues to witness several M&As and
partnerships                                ILLUSTRATIVE
                     Partnership examples                                       M&A examples

Between RPO
suppliers


                                                                                                Capital
                                                                                               Consulting




Between RPO and
B t             d
multi-process HRO
suppliers




Between RPO
supplier and
technology vendors


                                                                                                        20
                               Proprietary & Confidential. © 2010 Everest Global, Inc.

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Buyers need to carefully evaluate RPO suppliers as
their capabilities vary significantly along key delivery
dimensions
                                  Scale
                                     Company/RPO revenues
                                     Number of RPO deals
                                     Number f
                                     N b of RPO FTEs FTE
                                     Recent success
                                     Number of hires managed per year


Geographic delivery footprint                                                        Scope
  Delivery footprints across four key               Overall RPO                          Breadth of RPO services
  regions (North America, South                       delivery                           Geographic scope
  America, Europe, and Asia Pacific)                 capability                          Industries served
  Offshore capability                                                                    RPO centricity
                                                                                         RPO/HRO partnerships


                                  Technology capability
                                     Recruitment technology partnerships
                                     Recruitment technology platforms
                                     (ERP, best-of-breed, proprietary)
                                     usage experience
                                     Recruitment technology maintenance
                                                          gy
                                     experience


                                                                                                                   21
                                   Proprietary & Confidential. © 2010 Everest Global, Inc.
Contents


 Market definition and overview

 Buyer adoption and solution characteristics

 Supplier landscape

 Key takeaways




                                                                                     22
                           Proprietary & Confidential. © 2010 Everest Global, Inc.
Key takeaways for buyers and suppliers of RPO


For buyers

  Buyers need to have a clear understanding of RPO and its value proposition

  Buyers looking for a global RPO solution should look at not only the self-capability of suppliers but
  also at their combined capability through regional partnerships as well

  In the ongoing economic environment, potential buyers need to look closely at the financial stability
  of the suppliers as well as other M&A developments in the supplier landscape

  Buyers seeking early cost savings need to look at offshoring as one of the key levers

For suppliers

  Suppliers will have to continue to educate buyers on RPO and its value proposition

  Continued investments in strengthening and broadening service offerings should be the focus at this
  time – partnerships can b a valuable t l i achieving thi goal
  ti        t    hi       be    l bl tool in hi i this        l

  Creation of a standardized RPO model is key to long-term success

  Offering a broader suite of services such as internal hiring management and outplacement services
         g                                                   g      g               p
  could help suppliers differentiate and manage volatility in uncertain economic times

                                                                                                          23
                                  Proprietary & Confidential. © 2010 Everest Global, Inc.
Q&A
  Attendees will receive an email with a link to download today’s webinar presentation. To access a
  recorded audio version of this webinar, please contact Mark Williamson,
  mark.williamson@everestgrp.com

  For advice or research on RPO, please contact Everest:
    Katrina Menzigian, kmenzigian@everestgrp.com
    Rajesh Ranjan, rranjan@everestgrp.com

  For background information on Everest, please visit:
    www.everestgrp.com
    www.everestresearchinstitute.com

  Thank you for attending today


To ask a question during the Q&A session

  Click th
  Cli k the question mark (Q&A) button located on the floating tool bar in the bottom right of your
                ti       k      b tt l     t d    th fl ti t l b i th b tt             i ht f
  screen. This will open the Q&A Panel

  Be sure to keep the default set to “send to a Panelist”

  Then, type your question in the rectangular field at the bottom of the Q&A box and click the send
  button to submit
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                                  Proprietary & Confidential. © 2010 Outsourcing Center

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Recruitment Strategy

The document outlines a recruitment strategy with the goals of aligning recruitment with business plans, defining processes for attracting top talent at different levels, and establishing a talent acquisition strategy. It discusses recruiting top and senior leaders from direct sources, campuses, and job sites. The strategy aims to build the best employer brand, clearly define job requirements, select candidates based on qualifications and culture fit, and attract entrepreneurial people through opportunities for learning, growth, and equity compensation.

Global Trends in RPO and Talent Recruitment 2014
Global Trends in RPO and Talent Recruitment 2014 Global Trends in RPO and Talent Recruitment 2014
Global Trends in RPO and Talent Recruitment 2014

The report is based on the views of senior hiring managers from small, medium and large organizations from the Americas, Europe, Middle East and Africa (EMEA), and the Asia Pacific (APAC) region. It provides a rare glimpse into the key decisions that will impact businesses, particularly focusing on their workforce needs and the challenges they face in attracting and retaining talent in an uncertain economic environment. It also shines a light on the latest developments in the area of recruitment process outsourcing (RPO) and reveals where businesses are headed in adopting innovative solutions to the growing challenge of skills shortages.

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Recruitment Process Outsourcing (RPO) – Moving Beyond the Pioneer Stage

  • 1. Today’s webinar is brought to you by Outsourcing Center Today’s webinar Upcoming webinars Recruitment Process Outsourcing (RPO) – Pricing Model Alternatives Moving Beyond the Pioneer Stage Date and time: Synopsis: March 16, 2010 Everest experts will highlight the outsourcing 10:00a.m. CST / 11:00a.m. EST options for RPO, key buyer adoption trends, recent solutions and deal characteristics evolving supplier characteristics, Speaker: landscape, and the implications for both buyers and Ross Tisnovsky, VP – Research, Everest Group suppliers. About Outsourcing Center Outsourcing Center is the world’s most prominent internet portal for authoritative information on outsourcing. The Center’s mission is to build the industry by helping people understand how to create value through outsourcing. outsourcing We serve the outsourcing community through: Trusted and objective third-party perspective Database of over 81,000 opt-in subscribers Relevant media including editorials, research, whitepapers, and the annual Outsourcing Excellence Awards For more information, contact Peter Bowes at pbowes@everestgrp.com 1 Proprietary & Confidential. © 2010 Outsourcing Center
  • 2. Q&A To ask a question during the Q&A session Click the question mark ( q (Q&A) button located on the floating tool bar in the bottom right ) g g of your screen. This will open the Q&A Panel Be sure to keep the default set to “send to a Panelist” Then, type your question in the rectangular field at the bottom of the Q&A box and click the send button to submit 2 Proprietary & Confidential. © 2010 Outsourcing Center
  • 3. Introductions Katrina Menzigian Rajesh Ranjan Vice President Research President, Research Director Everest Group Everest Group kmenzigian@everestgrp.com rranjan@everestgrp.com 3 Proprietary & Confidential. © 2010 Outsourcing Center
  • 4. Recruitment Process Outsourcing (RPO): Moving Beyond the Pioneer Stage g February 23, 2010
  • 5. Contents Market definition and overview Buyer adoption and solution characteristics Supplier landscape Key takeaways 5 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 6. There are three kinds of sourcing models used for recruitment services Scope of this study Low Degree of outsourcing High Out-tasking Selective/componentized Comprehensive model outsourcing model outsourcing model Key Can include one or more Includes components of recruitment End-to-end outsourcing of characteristics recruitment processes process; can be front-office recruitment process to the Short-term project-based (employer branding, sourcing, etc.) supplier that includes both work or back-office components ( pp p (applicant front-office and back-office Typically restricted to one tracking, offer letter management, components type of hire at a time technology management, etc.) Ongoing long-term (e.g., executive hire, temp Ongoing long-term (multi-year) (multi-year) relationship hire) relationship Typically includes almost all Restricted to external Can include one or more types of types of hires hires; does not include hires for in scope component in-scope Includes both external and internal hire management Can include both external and internal hire management internal hire management Consideration The need is specific and In some specific recruitment The buyer wants to for adoption one time processes, buyers need expertise transform the entire Buyers want to keep on an ongoing basis recruitment function direct control over the The buyer wants to tip its toe in the The buyer wants to expand recruitment process outsourcing model the value creation beyond the “selective” model Most frequently used Frequently used in the current Least frequently used Prevalence environment currently but gaining traction Source: Everest Research Institute (2009) 6 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 7. We define RPO as transfer of ownership of all or part of recruitment processes or activities on an ongoing basis Strategy Judgment-intensive HR Transaction-intensive Recruitment strategy Strategic consulting Employee relations Sourcing Regulatory and compliance Applicant tracking Global mobility Screening Performance management Pre-employment testing Learningg Employment offers/ Recruitment selection management Compensation Background checking Benefits On-boarding Vendor management Payroll Employee data management HR information systems and reporting Employee contact center For this study, we include RPO deals in which: A minimum of four or more recruitment processes are included The RPO deal is active and is at least one year in contract length The buyer employee size is 3,000 or more It is a stand-alone deal and not part of multi-process HRO deal This study does not include “out-tasking” arrangements (typically handled by recruitment agencies, staffing companies, or executive search firm) that are managed on a p j ) g project-by-project basis rather than through an ongoing long-term yp j g g g g arrangement Source: Everest Research Institute (2009) 7 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 8. The single process HRO market is compartmentalized with different segments at varying levels of maturity; recruitment is moving beyond the “pioneer” stage now pioneer Evolution in the single process HRO market Benefits Payroll Employee data management on Market value creatio Increasing adoption Evolving specifications and Slower adoption rates; however, supplier capabilities growth and scale still available Increased M&A and partnerships Accepted model(s) and among suppliers to expand standards t capabilities and quicken Well-established specifications time-to-market and supplier capabilities Consolidated market dominated Performance by a few players management Learning Recruitment Pioneer Emerging rapid growth Reaching maturity Maturity Source: Everest Research Institute (2009) 8 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 9. There are multiple drivers for RPO; cost reduction and scalability gained prominence in the current economic environment Low High Business drivers Traditional Current Brief case example A New Zealand-headquartered co-operative group realized more Cost reduction than 30% cost savings through recruiting agencies consolidation along with process reengineering in an RPO model A leading North America Pharmaceuticals company met its Scalability fluctuating recruitment needs, typical of a pharmaceutical environment, and hired close to 3,000 people by taking the RPO route Not satisfied with the recruitment services of its HRO service Move towards best- provider, a leading British defence, security, and aerospace of-breed options company moved the recruitment function to a specialist RPO provider Improving I i RPO helped a leading global communication provider to reduce recruitment time-to-hire from four months to 32 days, increase the offer process acceptance from 30-90%, and increase the internal hiring by 20% for its European operation A U.S.-based national pharmacy automated the application process, Access to better built pre-screening tools to quickly identify high quality candidates pre screening candidates, technology and provided online information to hiring managers about candidate status, and resumed banks and phone interview notes through the implementation of a new Application Tracking System (ATS) tool and web portal as part of RPO engagement After a U.S.-based brewing company acquired a UK-based U S -based Enhancing company, RPO helped it launch and communicate its brand leading employer branding to increase in application by 50% 9 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 10. Contents Market definition and overview Buyer adoption and solution characteristics Supplier landscape Key takeaways 10 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 11. North American buyers are the leading adopters of RPO. The adoption trend is increasing in the UK and Continental Europe Buyer adoption trend by signing region Number of deals 100% = 88 96 South America 7% 16% Asia Pacific 17% 8% Continental Europe 3% UK 19% 22% North America 53% 54% 2006-2007 2008-2009 Sample size: 184 RPO deals signed between 2006 to July 2009 Source: Everest Research Institute (2009) 11 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 12. Buyers increasingly look to expand the country coverage in their RPO deals Geographic scope of RPO adoption Number of deals 100% = 85 91 Global 8% 8% (Multiple continents) Regional 14% 19% (Multiple countries in the same continent) Local L l 78% (One country only) 73% 2006-2007 2008-2009 Sample size: 176 RPO deals signed between 2006 to July 2009 Source: Everest Research Institute (2009) 12 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 13. Large buyers are the major adopters of RPO. The adoption in the upper end of the mid-market is increasing Buyer adoption trend by size of organization Number of deals 100% = 81 94 58% >15K employees 65% 8K-15K 20% 13% employees Mid-market 3K 8K 3K-8K 22% 22% employees 2006-2007 2008- July 2009 Sample size: 175 RPO deals signed between 2006 to July 2009 Source: Everest Research Institute (2009) 13 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 14. There are four technology models used in RPO with varying degree of prevalence Low High Increasing role of technology in RPO offering One-to-one model One-to-many model Increasing role of technology in RPO Tie-and-run Technology ATS Platform-based ATS support/ replacement/ solution augmentation implementation Brief Supplier leverages Supplier maintains Implementation of a A pre-configured, description existing Application buyer owned existing new ATS is bundled hosted ATS solution Tracking System ATS in place. Supplier with process owned and (ATS) in place to may also provide outsourcing. While maintained by the manage recruitment proprietary tools that technology ownership supplier. supplier Typically process. Buyer serve as “add-ons” resides with buyer, offered in ‘pay-as- retains the around the periphery of supplier provides you-go’ model with ownership as well as the existing ATS to offer upfront both technology and the maintenance of value add services (e.g., implementation and process pricing ATS tools may link to y ongoing maintenance g g bundled into one external job portals) price Prevalence Technology Typically created and Typically not tied to any specificity offered on a specific specific recruitment software ATS 14 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 15. In the current environment, buyers increasingly push for a variable pricing model to better align the hiring cost to hiring volume Pricing structure trend Number of deals 100% = 56 36 Other 2% 5% Fixed price 9% 8% Variable p ce a ab e price 25% 33% Base fee plus 61% variable price 56% 2008 2009 Sample size: 92 RPO deals signed between 2008 and July 2009 Source: Everest Research Institute (2009) 15 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 16. Core recruitment processes are most commonly included in RPO deals Inclusion of recruitment processes within RPO deals Percentage Strategic consulting 78 Sourcing 95 Applicant t ki A li t tracking 94 Screening 98 Employment offers/ 91 selection management Pre-employment testing 74 Background checking 76 71 On-boarding 68 Vendor management Sample size: 184 RPO deals signed between 2006 to July 2009 Source: Everest Research Institute (2009) 16 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 17. While offshoring is relatively nascent in RPO, use of low-cost geographies does increase as RPO engagements mature Use of offshoring within RPO Number of deals 100% = 53 58 59 66% 86% No offshore component 92% 34% Includes offshore 14% component 8% Deals in 1st Deals in 2nd Deals in 3rd year year year Sample size: 170 RPO deals signed as of July 2009 Source: Everest Research Institute (2009) 17 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 18. Contents Market definition and overview Buyer adoption and solution characteristics Supplier landscape Key takeaways 18 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 19. Suppliers in the stand-alone RPO market come from different backgrounds Pure-play RPO background Contracting/staffing background RPO market space Multi-process HRO background Executive search background 19 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 20. Reflective of the market maturity, the RPO market continues to witness several M&As and partnerships ILLUSTRATIVE Partnership examples M&A examples Between RPO suppliers Capital Consulting Between RPO and B t d multi-process HRO suppliers Between RPO supplier and technology vendors 20 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 21. Buyers need to carefully evaluate RPO suppliers as their capabilities vary significantly along key delivery dimensions Scale Company/RPO revenues Number of RPO deals Number f N b of RPO FTEs FTE Recent success Number of hires managed per year Geographic delivery footprint Scope Delivery footprints across four key Overall RPO Breadth of RPO services regions (North America, South delivery Geographic scope America, Europe, and Asia Pacific) capability Industries served Offshore capability RPO centricity RPO/HRO partnerships Technology capability Recruitment technology partnerships Recruitment technology platforms (ERP, best-of-breed, proprietary) usage experience Recruitment technology maintenance gy experience 21 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 22. Contents Market definition and overview Buyer adoption and solution characteristics Supplier landscape Key takeaways 22 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 23. Key takeaways for buyers and suppliers of RPO For buyers Buyers need to have a clear understanding of RPO and its value proposition Buyers looking for a global RPO solution should look at not only the self-capability of suppliers but also at their combined capability through regional partnerships as well In the ongoing economic environment, potential buyers need to look closely at the financial stability of the suppliers as well as other M&A developments in the supplier landscape Buyers seeking early cost savings need to look at offshoring as one of the key levers For suppliers Suppliers will have to continue to educate buyers on RPO and its value proposition Continued investments in strengthening and broadening service offerings should be the focus at this time – partnerships can b a valuable t l i achieving thi goal ti t hi be l bl tool in hi i this l Creation of a standardized RPO model is key to long-term success Offering a broader suite of services such as internal hiring management and outplacement services g g g p could help suppliers differentiate and manage volatility in uncertain economic times 23 Proprietary & Confidential. © 2010 Everest Global, Inc.
  • 24. Q&A Attendees will receive an email with a link to download today’s webinar presentation. To access a recorded audio version of this webinar, please contact Mark Williamson, mark.williamson@everestgrp.com For advice or research on RPO, please contact Everest: Katrina Menzigian, kmenzigian@everestgrp.com Rajesh Ranjan, rranjan@everestgrp.com For background information on Everest, please visit: www.everestgrp.com www.everestresearchinstitute.com Thank you for attending today To ask a question during the Q&A session Click th Cli k the question mark (Q&A) button located on the floating tool bar in the bottom right of your ti k b tt l t d th fl ti t l b i th b tt i ht f screen. This will open the Q&A Panel Be sure to keep the default set to “send to a Panelist” Then, type your question in the rectangular field at the bottom of the Q&A box and click the send button to submit 24 Proprietary & Confidential. © 2010 Outsourcing Center