India: The next global RPO destination

A vast pool of qualified and skilled talent pool and players experienced with global business practices makes India the best RPO destination in the world, observes Nirupama V.G., the co-founder of Ad Astra Consultants . One of the largest women-owned full suite recruitment solutions firms in India, Ad Astra Consultants is a globally sought after RPO service provider.

Any country that has a global skilled talent pool along with cost arbitrage advantages will always find itself in the limelight. This is why India has been able to enjoy leadership position in the IT and IT-enabled Services outsourcing space for nearly three decades. And now the country finds itself in that space in the recruitment process outsourcing (RPO) domain. This time, the transformation is across industry segments for domestic and international markets.

By outsourcing in-house recruitment processes to an expert agency, global and Indian corporations can benefit in several ways. For starters, the organisation can redeploy its valuable resources to more productive, customer engagement functions by freeing them up from mundane, hassle-some tasks such as finding and reaching to potential candidates, screening, and identifying the right fits by separating the chaff from grains, managing compliance requirements, and onboarding (and training) the recruits.

Most importantly, RPOs can support organisations during peaks and troughs. This is a win-win situation for the business which outsources, as well as the consulting firm which provides the service.

Besides assuring an overall cost reduction, RPO also brings certainty to the operating costs through various engagement and payment models such as end-to-end RPO, on-demand RPO, hybrid RPO, monthly retainers, cost-per-hire, or management consultancy fees, et al. So, it provides an opportunity to outsource in part or in full, and over a period, build a great partnership to ensure better predictability of quick turnaround time, joining ratios, and reduced costs.

Demand drivers and trends

The worldwide RPO market is expected to touch $14. 5 billion by 2026, growing by 19.7 percent CAGR according to a study published by the market research firm, Report Linker. Another research firm, Technavio predicts that the global RPO market will reach $40.56 billion by 2027, growing at a 29.1 percent CAGR. The crux is that these predictions provide a great opportunity to re-invent and re-engineer recruitment process outsourcing models across industry segments.

RPO is not the go-to option for just large corporations. Through RPO engagements, SMEs can hire the best available candidates in the market, save the time they would otherwise spend on recruitment activities carried out in-house, slash down the costs involved in hiring, and scale up rapidly.

While the need of the global organisations to achieve high efficiency in their recruitment processes and to prune their overhead costs may be the basic reasons behind such growth, there also are a few other significant aspects. Over the years, successful RPO firms have built a reservoir of data about the labour markets in different parts of the globe. This means access to substantial pipelines of candidates across diverse job requirements, industries, hierarchies, experience levels, functions, skillsets, and employment types.

The pressure of quickly meeting hiring targets to address the post-COVID spike in sales, difficulties in convincing candidates to return to the office, and high employee attrition are other factors that increase the demand for RPO at present. While companies across sectors are awarding RPO contracts, the current frontrunners for RPO are IT, manufacturing, banking, healthcare, retail, and telecommunications. While North America is the largest market at present, strong demand growth is evident in Europe and the Asia Pacific regions.

RPO is not the go-to option for just large corporations. Several mid-market companies in North America and other parts of the world have accrued concrete benefits by engaging with RPO firms. Through RPO engagements, SMEs can hire the best available candidates in the market, save the time they would otherwise spend on recruitment activities carried out in-house, slash down the costs involved in hiring, and scale up rapidly. Moreover, by engaging with specialist HR agencies, small and mid-sized companies get access to expert hiring advisors with vast and deep knowledge of global best practices in HR and recruitment. At Ad Astra, our experience shows that many companies prefer experts who can advise them on Recruitment Consulting rather than just perform recruitment services.

The demand for RPO is booming in India too. Market estimates indicate that the RPO market in India is currently growing at a 30 percent rate year on year. As per PwC estimates, India Inc. will need to hire 100 million people by 2027. Given this scenario, RPO will be the right solution for Indian companies to successfully meet this gigantic talent acquisition and management challenge.

Role of technology and brand recall

A range of advanced technologies such as artificial intelligence (AI) and robotic process automation (RPA) play a transformational role in recruitment process outsourcing. These are extensively used by RPO firms today.

RPA, for instance, can help you with activities like sending automated SMS and email replies to applicants, or with collecting and organising applicant data. It can provide standard guidelines to candidates, and automatically answer their common queries. Brand recall becomes easier, since professionals are deployed to handle the assignments.

Advantage India

When it comes to RPO, India enjoys a few unique advantages. Our country is gifted with a vast pool of highly qualified and skilled talent across domains. At present, India’s total labour force is estimated to be about 437.2 million, i.e., larger than the total population of the United States (338.3 million). In addition to the English-language education, many Indian professionals can also communicate in languages such as German, French, Spanish, Arabic, Russian, or Mandarin.

India is rightly placed today to grab the lion’s share of the global RPO pie within the next five to six years. A stable government with business-friendly policies and a focus on education, digitalization, and infrastructure, has helped create a conducive environment for global corporations to do business with the firms in India.

Today, India is in a unique position to service clientele across the globe and to set standards and best practices aligned to work for different countries. All that one must do is grab the opportunity!

Nirupama V.G. is the Co-founder and Managing Director of Ad Astra Consultants. With about three decades of experience in the Recruitment Consulting domain, she has worked with various large organisations and family businesses while building their people practices. She is a certified coach and a mentor.

(Disclaimer: The opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of the industry or any institution)