The recruitment industry has had its fair share of challenges, but RPO companies have shown remarkable resilience. In 2020, for example, RPO companies successfully navigated the uncertainty of the pandemic. This resilience is a testament to the fact that those navigating through the current down market will emerge stronger when the economy rebounds. As leaders in RPO, it is important to focus on strategic marketing and sales efforts today to ensure future success.
At the 2023 RPOA Annual Conference in Chicago, a panel of esteemed experts with diverse perspectives shared their best practices for marketing and selling RPO during economic downturns. In this article, we highlight a few of their key takeaways focusing on resilience and how RPO companies can prepare for the economic rebound.
State of the RPO Market
According to Everest Group, the global RPO market experienced steady growth in 2022, riding on the post-pandemic momentum from 2021. The market slowed down in 2023 as world economies tried to manage rising inflation and other geopolitical uncertainties. Everest estimated the decline in the global RPO market in 2023 to be about 7 to 9 percent, with North America being the size of all other global regions combined. Given the current economic conditions, it is still uncertain when the RPO market rebound. During their first 2024 meeting in January, Jerome Powell, Chairman of the Federal Reserve, announced the decision “to leave our policy interest rate unchanged… to assure the American people that we’re fully committed to returning inflation to our 2 percent goal.” High-interest rates are creating economic pressure affecting business investments, including recruitment spending.
RPO leaders on the 2023 RPOA Annual Conference panel remain optimistic about the market's future despite this temporary setback. Pam Verhoff, President and CEO of Advanced RPO, explained that two indicators suggest the possibility of a rebound—first, consistent and increased requisition activity by existing customers. Second, an increase in the sales pipeline can indicate that a rebound is approaching. Verhoff also mentioned that the RPO industry has long sales cycles, which may take six to eight months to see results.
Kim Davis, serial entrepreneur, and KRD Resources managing partner agrees with Everest Group's turnaround projection for the RPO market in late 2024. Everest predicts growth of the RPO market at a compounded average growth rate (CAGR) of around 15 percent over the next five years, with a forecasted global RPO market of $10 billion by 2027. Davis is optimistic that if the market doesn't recover in 2024, it will in 2025. He believes the recovery will be similar to the growth that happened in 2010 after the 2008 recession. Davis advised the audience to prepare for the recovery now, as what they do today will determine how well they take advantage of that turnaround. To benefit from future growth, RPO leaders need to invest in their business today.
Ben Eubanks, Chief Analyst with Lighthouse Research and Advisory (LHRA), emphasized two indicators of a rebounding market: first, by looking closely at what is happening in the business operations and comparing the current year's data with the previous year's benchmark data, such as requisition activity and sales cycles. The second way is to pay attention to the interests of potential clients. “Pay attention to the quality of questions potential clients ask and where they are on the buyers' journey. Are they aware of their problem, or are they considering your company, among others, to help them solve it?”
Marketing Strategies During a Downturn Market
Investing in a company's future growth is essential to sustainability in all market conditions. Investing in marketing is vital because, as Verhoff said, "Marketing is a fundamental pillar of growing a business." She shared that the marketing strategy that matters the most for RPOs during a downturn is investing in understanding their buyers. She noted that RPO buyers today are different from buyers years ago.
She said that the RPO buyer persona is complex. “Today's RPO buyer is not a single person but a team of people, with each team member having different roles and desiring different outcomes.” Research backs up her observation. During Eubanks's keynote speech at the conference, he revealed what RPO buyers want. His research showed that company executives want overall hiring strategy and business alignment, whereas HR/TA leaders want innovative recruiting strategies. Therefore, RPO leaders must understand the complexity of the different personas within an RPO buying team to ensure they execute effective messaging at the right time.
Eubanks fully describes the different RPO buyer personas.
Engaging Buyers in the Consideration Stage with Recruiting and Hiring Data
In the consideration stage, buyers are looking for solutions to their problems. Eubanks encouraged the audience to use recruiting and hiring data to show potential buyers their thought leadership in recruiting and hiring. He emphasized that educating and informing the buyer about possible solutions is more important than selling them solutions.
He mentioned that RPO salespeople could use this data to show an employer that they might not be filling a particular role because of rigid requirements or because it's highly competitive. The RPO marketing team could use the data to tell a success story of a client who implemented one of their solutions. To Eubanks's thinking, RPO marketing and sales teams should continually educate and inform buyers using recruiting and hiring data.
Now is The Perfect Time To Invest In Your RPO Business
For Davis, a downturn is the perfect time to invest in an RPO business, from the delivery model to the technology, business development, and especially marketing. "You need greater visibility today than ever," he said. "If you sit back retrenched, don't make those kinds of investments, don't start building the story, you'll miss that window of opportunity."
Davis speaks from experience because he started an RPO business during the down market in the early 2000s. He invested in marketing by hiring a marketing firm to tell his business story to potential buyers. Investing in marketing at that time paid off, for within five years, his company became one of the top five RPO providers in the industry. He's proof that investing in your business in a down market can gain you great rewards during the rebound.
RPO Selling is Team Selling
Verhoff tells new salespeople, "You, as an individual, will never close a deal here, not as an individual, because it's a team sale." She told the audience that because of the complexity of RPO buyers, selling RPO requires a structured integrated team. According to Verhoff, a well-integrated team consists of three main parts: marketing, sales, and delivery. All of these parts are interdependent. Sales are ineffective without marketing, and delivery is inadequate without both.
Marketing researches potential buyers to understand their pain points and sets the stage for sales and delivery. With the stage set, the sales and delivery personnel discuss solutions with the potential buyer. Once the deal is closed, a seamless transition to delivery happens because the delivery person has participated in closing the sale. The benefits of team selling include increased close rates and a clear understanding of expectations.
How To Optimize The Strategic Selling Of RPO
"Selling RPO takes strategic selling, not tactical selling," Davis told the audience. Strategic selling is team selling, and Davis shared three valuable best practices that can enhance it. A sales team needs the right person in the business development role to effectively implement RPO's strategic selling. The team should narrow its focus, and RPO business leaders must measure results.
Davis acknowledged that business development is challenging, and not everyone can do it. He said that the right person for the business development role includes being a subject matter expert on RPO and talent acquisition. “The person in the role of business development needs to understand the audience they're addressing and know potential buyers understand talent acquisition well,” he said. This role also calls for full comprehension of strategic selling. After all, RPO is about building strategic partnerships.
Davis then shared that sales teams need to narrow their market focus. He suggested that RPO businesses focus on two to four verticals and not be too opportunistic. Sales teams should use a pre-qualifying checklist to consider whether the deal they want to pursue is winnable. He observed that many RPO sales teams pursue unwinnable deals that cost the company up to USD 40,000.
“Selling RPO is very different than selling a widget,” Davis said. He noted that for sales teams to be successful, RPO business leaders need to use sales support platforms to measure results and hold the sales team accountable for those results.
What Marketing and Sales Teams Can Do Now To Prepare For The Market Rebound
Before taking questions from the audience, each panelist shared some final insights that sales and marketing teams can do right now to prepare for the rebound.
Verhoff shared that now is the time to message the value of an RPO partner and its long-term benefits for organizations. She also emphasized that marketing and sales teams radically change their approach to understanding potential buyers.
Davis recommended looking at warm leads that include prior and current clients, and people who have left the organization who were buyers before they left. He also suggested creating channel partnerships to increase reach, start relationships with consulting firms, and look at the underserved mid-market.
Eubanks strongly believes that marketing and sales should focus on educating potential clients. Potential buyers will choose a company that teaches them something new, helps them see their problem in a new light, and makes them feel smarter about it.
In conclusion, RPO companies exhibit resilience during economic downturns. The global RPO market has experienced steady growth in 2022 but slowed down in 2023 due to rising inflation and geopolitical uncertainties. However, RPO leaders remain optimistic about the market's future despite the temporary setback, with growth projections in late 2024 or 2025. The article highlights key takeaways from a panel of experts on marketing and selling RPO during economic downturns, including the importance of investing in marketing and understanding RPO buyer personas. Experts encourage RPO leaders to prepare for future growth by investing in their business today.
We encourage you to listen to this valuable panel discussion on our podcast, Time to Hire, to understand better how to prepare your RPO business for the economic turnaround.
