I recently attended an amazing webcast organized by a well-known global research firm, all about RPO (Recruitment Process Outsourcing) and Staffing pricing. I learned some really interesting things that I want to share with you, as it completely changed my perspective on how the industry works now.

In the last 6 to 18 months, the industry has gone through some big changes. It used to be a sellers’ market, but now it’s a buyers’ market. This shift happened because of economic recession and the surplus of available talent. According to LinkedIn data, hiring has dropped by 29% in the past 18 months.

One of the most exciting findings was that in 3 to 5 year RPO agreements, prices are expected to go down year after year. This is because advancements in technology, like AI and machine learning, have made the delivery process cheaper and more efficient. According to Gartner, using AI and machine learning in HR has boosted efficiency by 20%.

Another eye-opening discovery was the huge increase in offshoring recruitment. For example, India doubled its recruitment centers from 72 to 158 in just 12 months. McKinsey reports that offshoring can lower operational costs by up to 60%, which explains this significant rise.

The webcast also pointed out a shift towards outcome-based pricing. This means that buyers now want to pay based on results. It’s a win-win situation because it reduces risk for the buyers, is easier to sell to the higher-ups, and can even improve profits for the providers. A survey by Deloitte found that 75% of organizations prefer this performance-based pricing because it aligns with their business goals.

Another interesting trend is the use of volume discounts. RPO and Staffing providers are offering discounts to keep their current clients and prevent them from looking for other options. This approach benefits both parties by improving client retention and the service provider’s profitability.

The webcast ended with the research firm giving buyers pricing benchmarks by skill set and advising them not to overpay for RPO services in today’s market.

All these findings tell us that we’re in a new era of RPO and Staffing services, where buyers have more power over pricing. It’s crucial for buyers to stay informed about market trends and pricing strategies to get the best value for their investments.

As we navigate this changing landscape, let’s keep the conversation going and explore these industry changes in more detail. I’ll be writing more blogs soon, discussing the implications of these shifts for businesses and how to adapt strategically to this new buyers’ market. Stay tuned! 

Written by Christine Hutchison