Welcome to Issue 14 of Recruitment Trends & Industry Insights
Joanna Oakley CCWP MCIPD
Fractional COO : I help recruitment agencies & inhouse TA Teams gain greater operational control and reduce costs.
Hi I'm Joanna Oakley CCWP MCIPD . With over 20 years of experience in the staffing and recruitment industry, I am a Transformation and Change Consultant and the Owner/Director of Argylestone Consulting Ltd .
I help recruitment agencies gain greater operational control and reduce costs.
Trends:
The Rising Tide of RPO: A Look at the Market Trends
The Recruitment Process Outsourcing (RPO) market is on the verge of reaching a staggering ￡5 billion this year, a testament to the surging demand for specialised recruitment solutions. This growth is not just about numbers; it's a clear indication of how businesses are recognising the value of tailored recruitment strategies in an increasingly competitive talent market.
Here's the data to support this trend:
The global RPO market is expected to reach USD 24.32 billion by 2030, growing at a CAGR of 16.1% from 2023 to 2030. www.grandviewresearch.com
Another projection estimates the market will reach USD 33.6 billion by 2030, with a slightly higher CAGR of 17.5% from 2023 to 2030. www.globenewswire.com
A more conservative estimate suggests the market will grow to USD 28.09 billion by 2031, maintaining a CAGR of 16.1% from 2024 to 2031. www.skyquestt.com
Enterprise RPO Segment
The enterprise-based RPO segment, which includes full-scale or end-to-end recruitment solutions, is particularly strong:
It accounted for the largest revenue share of 55.7% in 2022. www.grandviewresearch.com
This segment is predicted to exhibit a CAGR of 17.5% over the forecast period. www.straitsresearch.com
Driving Factors:
According to the research, several factors are contributing to this growth:
1. Demand for streamlined recruitment processes and new hiring methodologies.
2. Integration of AI and machine learning technologies.
3. Focus on data-driven decision-making and advanced analytics.
4. Increasing emphasis on diversity, equity, and inclusion (DEI) initiatives.
5. Need for flexible and scalable hiring solutions, especially for SMEs.
European RPO Market Surge
Europe, in particular, is witnessing a notable surge in RPO adoption. According to Statista, the European RPO market is set to grow by an impressive 7% annually. This expansion reflects a broader trend across the continent, where companies are increasingly outsourcing their recruitment processes to tap into more efficient and scalable solutions.
Embracing Technology
The integration of AI and machine learning into recruitment processes is no longer a luxury but a necessity. Firms are turning to advanced analytics to enhance their hiring strategies, and it's paying off. Gartner predicts that by 2025, half of all large enterprises will have adopted these technologies to streamline their recruitment efforts. This shift towards tech-driven recruitment is transforming the industry, offering greater insights and efficiency.
Efficiency and Cost Savings
In a world where operational efficiency is paramount, RPO services stand out as a game-changer. Companies are not just looking to fill roles but to do so in a cost-effective manner. Deloitte's research highlights that businesses leveraging RPO can slash their hiring costs by up to 30%. This significant saving underscores why more organisations are turning to RPO to manage their recruitment needs.
RPO: A Market Worth Watching
These compelling figures paint a clear picture: the RPO market is poised for substantial growth in the coming year. For companies aiming to scale efficiently and stay ahead in the talent race, keeping an eye on these trends is crucial. Whether it's through embracing new technologies or capitalising on the cost efficiencies that RPO offers, the benefits are clear.
But this growth also brings critical questions for recruitment agencies:
As the market evolves, ensuring your agency is prepared to capitalise on these trends will be key to staying competitive and delivering value to your clients.
A Strong Finish to 2024: US Job Market Surges Beyond Expectations
December’s job numbers are in, and they’ve blown past all predictions. Employers added a whopping 256,000 jobs, far exceeding the anticipated 155,000. On top of that, the unemployment rate dipped to 4.1%, outperforming projections and signalling a robust and accelerating employment landscape in the US.
A Remarkable Year for Employment
Over the year, the economy added 2.2 million jobs, surpassing the 2 million mark set in the pre-pandemic year of 2019. This shows a resilience and growth that few anticipated.
Consistency in Job Creation
What’s particularly noteworthy is the unbroken streak of positive job growth. December marks the 48th consecutive month of net job gains, tying for the second-longest streak in US history. You’d have to look back to December 2020 to find the last time the economy recorded job losses.
What This Means Moving Forward
These figures underline a dynamic and thriving labour market that’s been building momentum. For businesses and recruiters, this means navigating a competitive landscape where talent acquisition strategies need to be sharper than ever. It’s a reminder that staying ahead in the recruitment game requires adaptability, foresight, and a keen eye on market trends.
As we step into 2025, the challenge will be maintaining this momentum and ensuring that the growth in employment translates into sustainable economic development.
UK Job Vacancies See Sharpest Decline in Four Years
The latest survey reveals that permanent job vacancies in the UK fell at their quickest rate in four years last month, painting a bleak picture of the current economic landscape.
With unstable markets and weak economic indicators, KPMG and REC’s monthly jobs report highlights a cautious approach to hiring among many companies. According to the survey, permanent job vacancies have dropped at their fastest rate since August 2020, during the height of the Covid pandemic. December also saw a decline in temporary job openings.
As many will have experienced, the labour market had been cooling throughout 2024, with December marking the 14th consecutive month of declining overall vacancies. The steepest drops in permanent roles were observed in the executive/professional and IT and computing sectors. KPMG’s CEO, Jon Holt, commented, “The UK jobs market is starting the new year on a subdued note. Businesses seem to be exercising caution due to higher employment costs, slower interest rate cuts, and rising inflation.”
Despite the current challenges, Holt remains optimistic about future improvements. The survey indicates that wage inflation continues to rise, reaching its highest level since August 2024, suggesting that demand for workers persists.
“As we move further into 2025 and the UK economy begins to grow, businesses will need fresh talent. The steep rise in salary inflation over the past four months shows companies are still willing to compete for skilled workers,” Holt added.
Policymakers are closely monitoring the impact of the recent increase in employers' National Insurance Contributions (NICs) from Rachel Reeves’s October budget. The Bank of England has noted that government policy decisions have introduced “additional uncertainties” regarding the economic outlook.
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Insights:
Membership to Progressive Agreement for Trans-Pacific Partnership (CPTPP) opens up global talent pool for UK recruiters.
Recruiters have warmly embraced the UK’s recent membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), viewing it as a major positive step. This strategic move opens the door for staffing companies to tap into the burgeoning economic potential of the Asia-Pacific region.
The UK officially joined the CPTPP on 15 December, expanding the combined GDP of the 12-member trading bloc to a staggering ￡12 trillion. Formed in 2018, the CPTPP includes key players such as Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
UK businesses stand to gain immensely from this partnership, with reduced tariffs and fewer trade barriers when dealing with member countries across three continents. The UK government anticipates a potential ￡2 billion boost to the economy over the long term.
For UK recruiters, this development translates to expanded access to global markets, a point underscored by the Association of Professional Staffing Companies (APSCo).
“This new partnership eases the red tape many firms have struggled with,” explained Tania Bowers, APSCo’s Global Public Policy Director. “From simplifying access to temporary work visas for deploying consultants, to removing outdated requirements like needing a contract or prior experience in a country to bid for work, these changes are significant.”
In an era marked by skills shortages, economic unpredictability, and an increasingly competitive recruitment landscape, access to international markets is more crucial than ever. APSCo Global remains committed to working alongside its regional counterparts to advocate for fairer trade deals, ensuring UK staffing firms can fully leverage these new opportunities.
Introducing the Fair Work Agency: What It Means for UK Employers
The Labour government’s Employment Rights Bill is set to bring significant changes, including the creation of a new enforcement body the Fair Work Agency (FWA). This agency aims to streamline enforcement for employment rights while ensuring employers meet their obligations. Let’s explore what this means and why it matters.
What is the Fair Work Agency?
The FWA will unify the responsibilities of three existing bodies:
In addition, the FWA will inherit powers from the Director of Labour Market Enforcement, allowing it to impose financial penalties on employers who fail to comply with employment tribunal awards.
What will the FWA cover?
The FWA will initially focus on enforcing rights in key areas, including:
It’s expected that its remit will grow to cover additional rights, such as family-friendly policies (e.g., paternity leave, flexible working, and maternity protections) and discrimination cases.
What powers will the FWA have?
The FWA will have extensive powers to:
Why does the FWA matter?
The FWA represents a shift towards centralised enforcement of employment rights, making it easier for individuals to seek help. For employers, this marks a new era of accountability.
Key implications for employers:
The Bottom Line: While the FWA won’t be operational for a few years, it’s essential for all businesses to start preparing. Reviewing policies, payroll processes, and record-keeping systems now can help mitigate risks later.
Looking Ahead
Deputy Prime Minister Angela Rayner has promised the FWA will have "real teeth" to enforce employment rights. However, its ultimate effectiveness will depend on government funding and resources. Will it deliver the promised "bite"? Only time will tell.
In the meantime, I recommend taking a proactive approach to compliance. Regular audits, staff training, and a clear understanding of evolving legislation will be critical.
If you’re wondering how these changes could impact your business or need advice on staying ahead, let’s chat!
My Ultra Challenge Journey: Walking for a Cause
This weekend, I officially kicked off my walking training for the London to Brighton 100k charity walk happening in May. Many of you may recall that in September 2024, I completed a 50k challenge around the Chilterns in support of the Blue Cross animal charity. That experience was both challenging and rewarding, and as usual its only really when you get to the end and pick up your medal, do you recognise the reason you put yourself through it. This is my fourth Ultra Challenge having previously completed the Thames Path 100k and the Jurassic Coast 100k.
This year’s challenge holds a particularly personal significance. In July 2024, we sadly lost my father-in-law, who had been battling Parkinson's for the last four years. In his honour, I am dedicating this 100k challenge to raising both money and awareness for Parkinson's. The journey will require me to complete the 100k within 48 hours, with an overnight camping stop halfway.
Unlike previous challenges, where I have had the company of friends or colleagues, this time I am stepping up as a solo walker. It’s an exciting yet daunting prospect, but I’m ready to embrace the solitude and the personal growth that comes with it, or at least that's what I am telling myself!
If you are a fan of hiking, jogging or indeed running and feel inspired to take on an ultra challenge yourselves, I highly recommend checking out the events offered by Ultra Challenge. They provide a range of exciting opportunities to test your limits while supporting great causes. You can find more information and their 2025 events calendar here: Ultra Challenge 2025 Events Calendar.
Undoubtedly I will keep you updated as to my training progress and I look forward to sharing my training ups and downs as I progress!
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Whether your staffing business is based here in the UK or internationally, I'm here to help. Let's discuss your goals and how we can achieve them together! Don't hesitate to book a call with me using the link in comments to explore the possibilities. Looking forward to connecting and making a positive impact! BOOK YOUR COMPLIMENTARY CALL
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International Business Transformation, High Impact Performance Improvement & Company Turnaround Specialist
1 个月Joanna Oakley CCWP MCIPD - real chewy info re RPO - are you seeing the growth (U.K., if any - based on your comments on U.K. market ala Reeves and co.) re RPO with companies here using the model, and keeping it "in house", i.e., local, or do you see it being offshored? I ask, as I had a very interesting discussion with a new U.K. staffing player who are literally taking off like a rocket with U.K. companies asking them to take on offshoring work for them in the usual hot-spot (India), however they are seeing explosive growth in places like Poland, Hungary, Luxembourg, and elsewhere - granted they are in the Tech space and their offering is blend of typical 'outsourcing/offshoring', BUT they are also scoring RPO work... I am also seeing companies using South African as a 'hot spot' - language/time zone/cost etc...Thoughts? Also, good luck with the "trundle"!!!!