Recruitment Outsourcing (RPO) - An Indian perspective

Q1) what is the scenario of RPO in India in terms of growth and future projection?

The potential for RPO in India is immense as India is going to face a talent crunch to the tune of half million people in the next few years. Already there is extensive research/debate over the employability of the vast talent pool that India generates. It is quite clear all are not employable be it in engineering, pharmaceuticals, retailing or some other sunrise verticals. This scenario nicely sets up the need for focused players in recruiting as RPO service providers will be taking the burden out of the headhunting business of the corporate sector. There is an intense war for talent. The hiring projections for India are very rosy and the clients are demanding higher quality candidates with increased efficiency. Personally I feel RPO as an industry will grow 30 to 35 % annually for the next 5 years.
Q2) why companies are preferring it?

In a recent survey conducted by Vati consulting for HR Managers of 50 IT companies in India, over 80% of the participating HR managers believed RPO plays an important role in recruitment and over 50 % have evaluated and used RPO in their companies. This is very true with a booming economy growing at break neck speed having a host of industries simultaneously showing double digit growth for many consecutive years. The HR managers have a tough task in hand to recruit large chunk of quality manpower to sustain business growth, find suitable replacements and also to manage the growing problems of attrition. Here the RPO providers come into picture as they will ensure speedy recruitment. Actually RPO firms act as specialized consulting firms for recruitments.

Q3) Can we have some facts and figure on RPO in the Indian context?

Some research projections put the entire Indian recruiting industry to be close to $ 1 billion. The RPO pie should not be more than 20 to 25% of this pie. But according to industry experts the potential for the Indian RPO industry will be to generate revenues of around $ 2 billion in the next 5 years. Of course if similar growth trends continue in Indian economy it has every reason to attain these projections.


Q4) what is awareness about RPO in the country?

The RPO sector in India is in its infancy stage with a lot of scope for making it big. The concept of RPO is very renowned and accepted in developed nations but in India there are a handful of firms working in this space. There has been a lot of awareness towards the need to involve RPO’s in the hiring process of firms especially in the IT sector. This definitely will ease the burden from HR operations of the company.