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What is the size of the market (in revenue) for Recruitment Process Outsourcing (RPO) in the US and globally? How has this changed over the past 5-10 years and what is the projected growth rate over the next 5 years?
Hi there! Thanks for asking Wonder to identify the market size for Recruitment Process Outsourcing (RPO) on a US and global scale, in addition to historic and projected market growth. The short version is that the global RPO industry displayed a CAGR of 17% from 2009 through 2015 and boasts a projected CAGR of 14.4% from 2015 through 2022. The US RPO market is valued at approximately $2.57 billion in 2017. The industry was valued at an estimated $1.20 billion in 2012 and is projected to reach an estimated $5.04 billion in 2022. Furthermore, the global RPO market is valued at approximately $5.03 billion in 2017. The industry was valued at an estimated $2.35 billion in 2012 and is projected to reach an estimated $9.86 billion in 2022. Although market value segmentation of the leading RPO providers is behind a pay wall, we have identified a precompiled list of major vendors. ADP, IBM, and ManpowerGroup are a few of the companies noted in the line-up.
Below you will find a brief explanation of our methodology and a deep dive of our findings.
METHODOLOGY
In response to your question, our team searched for readily available industry reports on the Recruitment Process Outsourcing (RPO) market. After scouring reputable corporate websites, industry publications, and trusted media sites, we have managed to zero in on hard statistics for the US and global RPO industry. Although we found reports that deal with the segmentation by leading players, the exact figures are protected by a pay wall and cannot be accessed without payment. To calculate market values for the past and future, we synthesized relevant data points and a calculations to arrive at our estimates. To ensure a high level of accuracy, we confirmed our figures with the online tool, Omni Calculator. Let's dig in!
RPO SERVICES OVERVIEW
We will lead with a quote from About Talent that summarizes the rapid growth of the Recruitment Process Outsourcing market in plain terms: "Simply put, RPO is the outsourcing of a company’s internal recruitment process to a third-party provider, primarily for workers that will be hired by the company for an internal position. Companies with no or limited recruitment capabilities, or those with seasonal or project recruitment needs, rely on RPO providers to manage part or all of their recruiting". This publication states that RPO service providers claim total responsibility for the process of talent recruitment; they act on behalf of their client by promoting each unique brand and overseeing the management and design of the recruiting strategy. Typical services include tech consulting, "process mapping", tracking and reporting, manager training, candidate scans, and vendor management. A report abstract from Credence Research states that the target market for RPO services includes end users in telecommunications and IT, financial services, healthcare, education, manufacturing, retail, and utilities.
According to the Recruitment Process Outsourcing Association, RPO has only been around for ten years or so and serves as a "progeny of human resource outsourcing" to help alleviate internal recruiting costs and demands on staff. Everest Group suggests that this sector can attribute its unprecedented expansion to "resurgence of the growth in the North American market" and a rise in new deal activity.
RPO REVENUE AND GROWTH
Over the course of our study, we uncovered several data points for estimating industry revenue for both the US and global RPO market. We also took a look at historic revenue and growth trends, in addition to forecast expansion within the industry.
According to research from Staffing Industry Analysts, the US RPO market value was $2.25 billion in 2016, and the global market value was $4.4 billion in 2016. Market reports show that the overall global industry displayed a CAGR of 17% from 2009 through 2015 and boasts a projected CAGR of 14.4% from 2015 through 2022.
1. US MARKET
If we assume that the global growth rates can be applied as a proxy to the US market value ($2.25 billion in 2016) as a point of reference, we can calculate approximate market values for the previous five years (at 17% CAGR) and the next five years (at 14.4% CAGR). Please bear in mind that this projection is merely a rough estimate since any number of market variables can impact the sector's growth over time. For accuracy, our calculations are clearly outlined below and have been processed through the online tool, Omni Calculator.
2011: $1.03 billion (1.20 / 1.17)
2012: $1.20 billion (1.40 / 1.17)
2013: $1.40 billion (1.64 / 1.17)
2014: $1.64 billion (1.92 / 1.17)
2015: $1.92 billion (2.25 / 1.17)
2017: $2.57 billion (2.25 * 1.144)
2018: $2.94 billion (2.57 * 1.144)
2019: $3.37 billion (2.94 * 1.144)
2020: $3.85 billion (3.37 * 1.144)
2021: $4.41 billion (3.85 * 1.144)
2022: $5.04 billion (4.41 * 1.144)
2. GLOBAL MARKET
If we apply the global growth rates to the global market value ($4.4 billion in 2016) as a point of reference, we can calculate approximate market values for the previous five years (at 17% CAGR) and the next five years (at 14.4% CAGR). Once again, please note that these historical growth values are simply a rough estimate to illustrate the overall trend toward growth. As mentioned above, our calculations are clearly outlined below and were processed through the online tool, Omni Calculator.
2011: $2.01 billion (2.35 / 1.17)
2012: $2.35 billion (2.75 / 1.17)
2013: $2.75 billion (3.21 / 1.17)
2014: $3.21 billion (3.76 / 1.17)
2015: $3.76 billion (4.4 / 1.17)
2017: $5.03 billion (4.4 * 1.144)
2018: $5.76 billion (5.03 * 1.144)
2019: $6.59 billion (5.76 * 1.144)
2020: $7.54 billion (6.59 * 1.144)
2021: $8.62 billion (7.54 * 1.144)
2022: $9.86 billion (8.62 * 1.144)
LEADING SERVICE PROVIDERS
At your request, we took a deeper look at industry segmentation by the most notable players in the RPO space. Unfortunately, exact estimates of market share and revenue for these companies are protected by a substantial pay wall. However, a recent report summary from Technavio published a list of key RPO players that serves as a snapshot of the competitive set at the front of this global market.
- ADP
- IBM
- ManpowerGroup
- Randstad Sourceright
- Accenture
- Alexander Mann Solutions
- Allegis Global Solutions
- Futurestep
- Hays
- Hudson
- Infosys
- KellyOCG
- Pontoon Solutions
POSSIBLE FUTURE RESEARCH
We would be thrilled to continue our research by exploring any of the above industry leaders on a more granular level. If it's of any interest, Recruiter published an informal list based on "reader feedback, expert opinions, and [user] experience". We also recommend an in-depth exploration of the primary market drivers that fuel the RPO industry. Everest Group and About Talent are two insightful sources that discuss some of these economic metrics and catalysts for growth.
Please let us know if we can continue to unpack some of these market dynamics through the above research tangents.
CONCLUSION
To wrap it up, the global RPO industry displayed a CAGR of 17% from 2009 through 2015 and boasts a projected CAGR of 14.4% from 2015 through 2022. The US RPO market is valued at approximately $2.57 billion in 2017. The industry was valued at an estimated $1.20 billion in 2012 and is projected to reach an estimated $5.04 billion in 2022. Furthermore, the global RPO market is valued at approximately $5.03 billion in 2017. The industry was valued at an estimated $2.35 billion in 2012 and is projected to reach an estimated $9.86 billion in 2022. Although market value segmentation of the leading RPO providers is behind a pay wall, we have identified a precompiled list of major vendors. ADP, IBM, and ManpowerGroup are a few of the companies noted in the line-up.
As always, thanks for using Wonder. Please let us know if we can help with anything else!