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Asia-Pac outsourcing deals most likely to include recruitment

Fri, 6 Jun 2014
Globe

A new report has found employers in Asia Pacific (APAC) are more likely to sign up to outsourcing deals that include recruitment than employers in North America and Europe, Middle East and Africa (EMEA). 

According to the report by global management consulting firm Everest Group, recruitment outsourcing was included in 59% of MPHRO (multi-process human resources outsourcing) deals in APAC in 2013. This compares with 36% in EMEA and 24% in North America. 

When comparing the performance and succession planning component within MPHRO deals, Everest Group found that again that APAC came top with 34% of deals compared with 30% and 17% for deals in Europe and North America respectively

The report found that APAC continued to be the fastest growing region in the MPHRO market with over a third of the new deals being signed in that region. Within APAC, the report notes how activity has moved beyond the traditional markets such as Australia into countries such as such as China, India, Indonesia and Japan.

In addition, the MPHRO market showed a 3% compound annual growth rate (CAGR) in 2013 compared to 2012, reaching $3.3bn (£1.96m). However, the company noted that the APAC region “has become the hub of new activity in the segment”.

Elizabeth Rennie, human resources outsourcing (HRO) research director at business process outsourcing (BPO) analyst firm NelsonHall, agrees that APAC is one of the fastest growing region for deals. She tells Recruiter: This is reflected in "significant investment in new offices by RPO specialists such as Hays, KellyOCG and IBM Kenexa in Vietnam, Thailand and Malaysia.” 

"Japan has the biggest talent issue in the world because of its huge ageing population retiring," Rennie continues.

She adds: “RPO vendors are moving beyond just permanent hires to offer a unified approach for combined permanent and contingent labour through blended managed service programme (MSP)/RPO services.”

According to Rennie, the worldwide RPO market as a whole is growing at around 15% a year, with the US and the UK remaining the most important markets. A major factor in the growth of RPO is that “everybody wants people with five to seven years’ experience”, with employers not willing to train sufficient people “because of the cost”, she says.  

And Rennie points to a significant trend in what large organisations expect from RPO deals. “There has recently been a marked up-tick in employer branding services, now increasingly being complemented by the provision of workforce planning, building and management of talent pools, and labour market analysis,” she says. 

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