Outsourcing Industry Important Tool In Workforce Acquisition
Francis Padamadan, Senior Director, KellyOCG talks to BW People about the outsourcing industry, business of job portals, and technology shaping up the workforce hiring.
How is the RPO industry shaping up? Has it become indispensable to the organizations or is it still shaping up?
Recruitment Process Outsourcing (RPO) industry has emerged as an important tool in the talent acquisition field. According to the latest statistics of the industry, the RPO market is estimated to grow at a CAGR of over 14 percent and APAC accounts for 41 percent of the growth. RPO is not an indispensable solution that organisations need to have but is definitely one key solution to consider having in place. It reduces the cost of hiring and adds to business value, among several other benefits to reap. As talent demographics and psychographics of the multigenerational workforce are changing constantly, a well-established and experienced RPO partner plays an import role in helping organisations attract, engage and hire top talent.
What is the pace of business growth through RPO? Is it growing for the search of jobs in the wake of unemployment?
India is one of the progressive adopters of Recruitment Process Outsourcing (RPO). Corporate and big firms are turning to RPO to better engage, attract and secure the very best talent by utilizing their expertise, knowledge, and experience. RPO helps organisations to reduce time-to-hire, cost-to-hire and many more. Additionally, it brings in better quality hires that fit the organisations needs and work culture. According to the US Department of Labour, each bad hire can equal to 30% of that individual’s annual earnings. Based on research, each vacant position could cost an organisation an average of US$13,600 per month. There are significant cost and revenue impacts on the organisations when there is a bad hire or unfilled position.
Despite fewer jobs in the market, there are still many positions in various domains that are in demand in the IT, finance, accounting, and fintech. There is always a demand for new talent to meet business needs. According to our latest Talent Acquisitions Report, 93 percent of recruiters say that their hiring budget will remain the same or increase. Thus competition for talent will continue to be stiff moving forward.
Why is the trend of the contingent workforce continues to expand? How is technology shaping up the process? Does it help applicants get a better deal?
Contingent workforce has become a very important and large resource for highly skilled talent. According to our Workforce Agility Barometer Report II (WAB II), companies hire contingent workers to fill skill requirements that are not typically available in their permanent workforce. Also digital and technology advancement definitely has a significant impact on recruitment strategy and processes. To keep up the pace, investment in technology and digital tools to make the hiring process smarter, easier and more effective, is imperative. For example, applicant tracking systems (ATS) and new artificial intelligence software can be used to keep track of history, activities, personal details, and experience related information of the candidates and manage the data digitally in an effective way. In a joint-research done by KellyOCG and Human Capital Media, it was found that 66 percent of recruiting organisations are using some form of ATS for their recruitment and to manage their compliances.
How is the adoption of senior-level employees through outsourcing? Is it difficult at any level? How does outsourcing better help the talent strategy of organizations?
There is an emerging trend in hiring senior-level employees through outsourcing. According to our WAB II statistics, 43 percent of contingent hiring in India is for mid and senior-level positions, which is second highest as compared to Malaysia, Australia, and Singapore. It was also found in our research that 58 percent of companies who worked with RPO partners believe that they play an important role in hiring key talent. The primary reason to leverage RPO is to help in reducing time-to-hire and getting better quality candidates.
RPO partners enable organisations to make better talent management and recruiting decisions from the industry and talent insights, coupled with data and analytics that they provide. Outsourcing partners equipped with the latest technological systems and tools, allow organisations to enjoy the benefits of it without the need to make hefty investments to purchase them.
How has your business been affected by increasing unemployment? What factors are affecting your business?
The unemployment rate is not ideal, however, key and top talents are still highly sought after and in demand. Strategic and focused talent acquisition approach is what organisations need to have in place and if that capability is not within the company, having a proven and experienced RPO partner will help plug the gap.
Why has flexi-staffing become one of the mainstream job engines? What sectors, other than IT absorb maximum through flexi- staffing. What are the most common employer requirements for staffing?
Flexi staffing is gaining momentum, as it helps companies to fill skill requirements that are not typically available in their permanent workforce. The sector in the flexi staffing is prevalent in industries that include fintech, accounting, life science, and oil and gas industries.
