Recruitment process outsourcing (RPO) in Europe, Middle East, and Africa (EMEA) is the second-largest global market behind North America. Together, these two regions comprise 80 percent of the global RPO industry according to research by the Everest Group.
During the 2020 pandemic, RPO in EMEA experienced a precipitous decline of -22% in Q4. Despite the pandemic’s impact, Ani Kulkarni of Everest Group expects "a strong recovery in 2021 for all RPO markets which are expected to move back to their 2019 numbers.”
In this exclusive interview with the RPOA, Craig Sweeney, SVP, Global Strategic Talent Solutions at WilsonHCG, shares unique and highly informative insights on the state of RPO and talent in EMEA.
RPOA: What are some of the new shifts you're seeing from RPO clients?
Sweeney: There are several trends that we’ve seen driving the increase in partnerships between RPO providers and their clients, many of which have been accelerated because of the recent COVID-19 pandemic. These include:
- The need to scale the workforce in an unpredictable environment is requiring much more flexibility in talent acquisition models. RPOs provide the much-needed scalability that can flex at relatively short notice and support business needs when they arise.
- The growing gap between supply and demand for highly sought-after talent needs more innovation to achieve success. The tools and processes RPOs bring to provide global workforce analysis are ever-expanding and can help with attraction, engagement and hiring of talent through multiple talent pipelining channels.
- Technology to support talent acquisition is increasingly complex and requires dedicated expertise to deliver the best return on investment. RPOs have dedicated teams that are constantly evaluating this market and can consult on the best-in-class products and have the experience to demonstrate how best to deploy and use them.
- Consulting capabilities to enhance employer branding and recruitment marketing, process/program optimisation, diversity, equity, inclusion and belonging (DEIB), talent market intelligence and strategic workforce planning.
- A trend towards a more blended workforce where talent can be permanent, temporary, contract or interim and is simply there to fulfil work which needs to be delivered. True talent solution providers can incorporate their RPO models into broader talent solutions to support consistently across all these needs.
- RPO in EMEA had largely been a UK-led regional solution but we have seen a significant increase in strategic decision making for the region being led out of other markets.
Aside from the recent trends, we’re also seeing increased market adoption of RPO and broader talent solutions through many of the more conventional benefits an RPO provider can bring.
- The maximisation of return on investment for outsourced services (including RPO).
- Teams which are highly skilled and receive ongoing career development on the latest techniques and tools.
Recommended: Watch global RPO panel with Everest Group's Ani Kulkarni and other top global talent experts
What is driving these shifts?
Scalable solutions: This is being driven by a need to deliver pent-up demand and catch up on lost revenue in 2020 to deliver in an uncertain and unstable market.
Supply and demand: Everyone is seeking the same talent at the same time with no increase in supply. Therefore, talent supply is finite and it’s essentially like mining for bitcoin. It takes more energy and resources to find the same amount of talent than it did before.
Technology: Investment in technology continues to be high in the talent acquisition sector and more products are emerging or developing to tackle the 'new' priorities around hiring scale, efficiency and with a focus on DEIB.
Consulting: Many organisations stripped back their internal talent acquisition teams during the pandemic and have not had the chance to invest what is needed in their strategic leadership due to the operational demand from the business on talent acquisition. RPO providers are helping to fill that gap.
Diversity, equity, inclusion and belonging (DEIB): DEIB has been on company radars for some time but with little investment or activity. However, over the past 12 months, it’s been firmly placed back on the agenda for organisations that are striving for change. The #BLM movement helped to reinforce the importance of diversity and inclusion.
Blended workforces: Out of any crisis, there is always the advancement of initiatives that have been around for some time. The challenges the pandemic created have driven the need for total talent solutions and this is now front of mind for many organisations.
The UK is not the centre of EMEA: Because of Brexit and the COVID-19 pandemic, the UK is no longer the talent acquisition powerhouse of Europe.
What changes are you seeing in the talent market?
Skill shortages in key areas remains a challenge across EMEA. Before the pandemic hit, European executives reported that the most critical area of talent investment was the re-skilling of the workforce to keep up with change. In the DACH region (Germany, Austria and Switzerland), the top priorities for companies in 2021 is investing in defining future workforce needs, restructuring, re-skilling/up-skilling the workforce, embedding diversity, equity, inclusion and belonging insights and reinventing sustainability. We expect to see more companies take advantage of Europe as one market for talent. While this has been an aspiration for some time, companies that have embraced the 'new normal' of working from home are at a distinct advantage where they can hire skills anywhere their business is operating.
We are seeing a shift in the way we need to source and engage certain types of talent. Historically, lower-skilled, blue-collar and volume-hiring was all about the attraction strategy to fill a funnel and manage the volume through the hiring process. That has shifted and many lower-skilled positions require more skilled sourcing methods to find and engage talent due to the high level of demand.
For companies with a global footprint, there will be an opportunity to consider multiple preferred locations for roles. This will have an impact in areas like technology where hires in locations such as Poland, will cost significantly less than the same skillset in western European countries.
We are seeing more clients looking at building tech hubs in locations across Europe that you would typically expect, but also many are looking at locations that are less familiar to take advantage of the exponential growth in talent supply across software and technical engineering skillsets.
The impact of Brexit is starting to be felt. With many low-to-mid-skilled roles previously filled by talent from the EU, companies in the UK will start to experience the reality of smaller talent pools and increased costs. We expect to see a shift in focus to enhance apprenticeship, re-skilling and early career hiring programs.
Suggested: Everest Group 2021 Assessment of Global RPO
What's driving these changes?
The “war for talent” is not just between employers but also between candidates and employers. The accelerated rise in digital transformation has created a ‘work from anywhere’ environment and the pandemic has caused a shift in what candidates consider important to their job searches.
The increased focus on automation and digital transformation as a result of the pandemic has compounded the issue of talent availability, resulting in acute talent shortages in certain skill areas. As businesses continue to alter their operating models in response to the pandemic and to adjust to new customer demands, more organisations will be prioritising digital transformation, focusing the demand for talent on skills to implement the change and those individuals with the skills to deliver services post-transformation, creating an even tighter market.
Employers will need to differentiate themselves to appeal to talent to succeed in this market, so a robust employee value proposition and employer brand--is critical. An organisation’s brand (consumer/employer) and employee value proposition are key to attracting and retaining the best talent, regardless of level.
- The pandemic has created some key opportunities for organisations seeking talent: Advancements in digital transformation have opened greater feasibility to remote working and wider access to talent in any market. Talent is no longer tied to location by brick and mortar. Instead, organisations can now focus on how best to complete a task rather than ‘what is available’ local to their physical footprint.
- The psyche of talent to remote and home-based working has also shifted positively - commute and physical location are far less of a barrier.
- The pandemic has created a marketplace where more workers are open to looking for roles which will enhance and build their knowledge rather than how they are engaged (permanent, temporary, contract, etc).
However, the pandemic has also created challenges, both present and future:
- Borders have been closed, limiting the opportunity for global mobility, both for existing talent and new hires, posing a challenge where organisations are exploring new territories and wish to install tenured personnel to embed and evangelise the corporate culture. Fewer development opportunities for campus and graduate leavers will lead to a growing skills gap in the next three to five years.
- The pandemic has impacted all industries, meaning industries previously considered ‘non-competitive’ in the war for talent are now competing for the same talent.
How is your organisation adapting to these changes in the RPO and talent markets?
Today’s clients want a lot more choice around program types and durations (including more specialisms). They want enhanced, expanded and additional services (new-look RPO, broader talent/HR areas, broader business areas) with a holistic total talent (permanent and contingent mix, talent management/talent development) approach, so we’ve expanded our solutions as a result.
Diversity, equity, inclusion and belonging (DEIB) solutions are also in high demand, and rightly so. As a result, we’ve introduced several new solutions including the launch of new DEIB dashboards (which leverage diversity data points to identify strategic initiatives), DEIB branding scorecards (designed to measure how DEIB is portrayed with an employment brand to identify opportunities for improvement), a DEIB hiring manager training program (to support hiring manager training on DEIB) and a DEIB tech stack evaluation (analysis of ancillary technology that can better support DEIB objectives). These new solutions have been rolled out to clients and are designed to help companies identify their current state and any gaps, then develop achievable and desired diversity goals.
A total talent approach is ideal for the current market conditions. The best total talent programs combine permanent and contingent talent, which allows for transparency and visibility across the entire workforce to drive informed business decisions. Using both RPO and MSP services allows for industry expertise and scalability, which is much needed given all the shifts because of the pandemic. A total talent approach can ensure talent acquisition has the best tech and processes to provide talent at speed, while also looking ahead to future business need.
Final words or thoughts about the state of RPO in EMEA.
EMEA is one of the most mature markets for pure-play RPO, which was originally pioneered in the UK in the mid to late 1990s before taking off throughout Europe. Over the next five years, we see a continuous trend toward the adoption of total talent, with RPO programs increasingly expanding to incorporate total talent solutions.
We’ve already seen a significant shift away from the traditional strategy of segmented talent acquisition. Until fairly recently, we have seen a strong adherence to segmented talent acquisition models with siloed operations across contract/contingent workforce, early careers, as well as experienced and executive hiring categories.
With an increased focus on work being completed and greater flexibility in terms of how talent is being engaged, we anticipate more growth in total talent solutions for all permanent, contract, temporary and contingent workers. Many of our clients are already benefiting from consolidating their permanent and non-permanent hiring. Graduate and early career hiring are becoming more integrated into holistic talent solutions, leveraged as a key channel to deliver culturally aligned future talent. Similarly, the combining of permanent and non-permanent requirements has further highlighted the benefits that come with achieving increased synergy.
One other thing worth noting is that we’re slowly starting to see some of the borders re-opening in EMEA.
Craig Sweeney, SVP of Global Strategic Talent Solutions, WilsonHCG.
As the Senior Vice President of Global Strategic Talent Solutions, Craig leads WilsonHCG's new client development across the world. Craig has been instrumental in WilsonHCG’s international growth, ensuring the global solutions we deliver are tailored to the needs of each region. He has led numerous projects across the EMEA and APAC regions including client and delivery developments in India, China, Korea, Hong Kong and Singapore.
WilsonHCG is an award-winning, global leader in total talent solutions. Operating as a strategic partner, it helps some of the world’s most admired brands build comprehensive talent functions. With a global presence spanning more than 65 countries and six continents, WilsonHCG provides a full suite of configurable talent services including recruitment process outsourcing (RPO), executive search, contingent talent solutions and technology advisory.
TALENT. ™ It’s more than a solution; it’s who we are.