Everest Group research analysts will identify emerging trends, highlight challenges, illustrate the current service provider landscape, and identify some possible differentiation themes for providers.

1. Today’s Webinar is brought to you by Everest Group
Today’s Webinar
RPO Market Undergoes Explosive Growth – Opportunities and Challenges Ahead
Synopsis: Everest Group research analysts will identify emerging trends, highlight
challenges, illustrate the current service provider landscape, and identify some possible
differentiation themes for providers.
About Everest Group
Everest Group is an advisor to business leaders on global services with a worldwide reputation for helping
Global 1000 firms dramatically improve their performance by optimizing their back- and middle-office business
services. With a fact-based approach driving outcomes, Everest Group counsels organizations with complex
challenges related to the use and delivery of global services in their pursuits to balance short-term needs with
long-term goals. Through its practical consulting, original research and industry resource services, Everest
Group helps clients maximize value from internal transformations, shared services, outsourcing and blended
model strategies. Established in 1991, Everest Group serves users of global services, providers of services,
country organizations and private equity firms, in six continents across all industry categories. For more
information, please visit www.everestgrp.com and www.everestresearchinstitute.com.
For more information, contact Mark Williamson at mark.williamson@everestgrp.com
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2. Q&A
To ask a question during the Q&A session
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3. RPO Market Undergoes Explosive
Growth – Opportunities and
Challenges Ahead
Webinar
April 28, 2011

4. Introductions
Rajesh Ranjan
Research Director
Everest Group
rajesh.ranjan@everestgrp.com
Sayan Chatterjee
Senior Research Analyst
Everest Group
sayan.chatterjee@everestgrp.com
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5. Contents
 Market definition and overview
 Buyer adoption and solution characteristics
 Service provider landscape
 Key takeaways
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6. There are three kinds of sourcing models used for
recruitment services
Low Degree of outsourcing High
Selective/componentized Comprehensive
Out-tasking model outsourcing model outsourcing model
 Can include one or  Includes components of recruitment  End-to-end outsourcing of
Key
more recruitment process; can be front-office recruitment process to the
characteristics
processes (employer branding, sourcing, etc.) service provider that
 Short-term project- or back-office components includes both front-office
based work (applicant tracking, offer letter and back-office
 Typically restricted to management, technology components
one type of hire at a management, etc.)  Ongoing long-term
time  Ongoing long-term (multi-year) (multi-year) relationship
(e.g., executive hire, relationship  Typically includes almost all
temp hire)  In case of fuller scope, typically types of hires
 Restricted to external includes one or two types of hires/  Includes both external and
hires; does not include job-families internal hire management
internal hire  Can include both external and
management internal hire management
Consideration  The need is specific and  In some specific recruitment  The buyer wants to
for adoption one time processes, buyers need expertise transform the entire
 Buyers want to keep on an ongoing basis recruitment function
direct control over the  The buyer wants to dip its toe in the  The buyer wants to expand
recruitment process outsourcing model the value creation beyond
the “selective” model
Focus of our discussion
Source: Everest Group (2010)
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7. We define RPO as transfer of ownership of all or part of
recruitment processes or activities on an ongoing
basis
Strategy
Judgment-intensive
Transaction-intensive
HR Recruitment
strategy  Strategic consulting
 Sourcing
Employee relations
 Applicant tracking
Regulatory and compliance
 Screening
Global mobility
 Pre-employment testing
Performance management  Employment offers/
Learning selection management
Recruitment  Background checking
Compensation  On-boarding
 Vendor management
Benefits
Payroll
Employee data management
HR information systems and reporting
Employee contact center
Everest’s analysis include only those RPO deals in which:
 A minimum of four or more recruitment processes are included
 The outsourcing deal is active and is at least one year in deal length
 The deal scope should not be limited to temporary hires only
Source: Everest Group (2010)
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8. In the last couple of years, RPO moved from the
“pioneer” to the “emerging rapid growth” stage along a
market maturity curve
Evolution in the single-process HRO market
Benefits
Payroll
Employee data
management
 Accelerated adoption
Market value creation
 Evolving specifications and
service provider capabilities
 Increased M&A and partnerships  Slower adoption rates; however,
among service providers to growth and scale still available
expand capabilities and quicken  Accepted model(s) and
time to market standards
 Well-established specifications
and service provider capabilities
 Consolidated market dominated
Learning by a few players
Compensation
Recruitment
Pioneer Emerging rapid growth Reaching maturity
Maturity
Source: Everest Group (2010)
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9. The RPO market is growing at a rapid pace with
explosive growth in new deal signings in 2010
Extensions New deal signings New annual hires
Time trend for deal activity Time trend for average deal size
Number of deals Average number of hires per deal
180 1,571 1,600
1,519
160 1,371 1,400
140 29
1,200
120
1,098 1,000
100
800
80 48
33 600
60 126
21 400
40
52 58
20 39 200
0 0
2007 2008 2009 2010E
Sample size: 406 RPO deals signed between 2007 & August 2010
Source: Everest Group (2010)
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10. Traditional drivers such as cost savings and scalability
continue to be important for first-generation buyers.
Second-generation buyers look for more strategic value
Impact on efficiency Impact on effectiveness Impact on overall business
High
Stage III
Impact delivered
Stage II Strategic impact
Stage I Business impact
Cost impact
Low
Time
Key drivers in first- Key considerations in More of aspiration
generation deals second-generation deals currently
Source: Everest Group (2010)
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11. While a high number of renewals indicates broader
satisfaction, the rapid growth has put some strain on
service delivery, leading to few non-renewals/terminations
Deal renewal activity
Number of deals
100% = 154
Deal terminated before
contract expiry
Deal not renewed 5%
10%
85%
Deal renewed
Sample size: 154 RPO deals signed between 2007 & August 2010
Source: Everest Group (2010)
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12. Contents
 Market definition and overview
 Buyer adoption and solution characteristics
 Service provider landscape
 Key takeaways
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13. North American buyers continues to lead RPO
adoption. Continental Europe saw increased adoption
in 2010
Buyer adoption trend by signing region
Number of deals
100% = 228 117
2%
Asia Pacific 20% 14% South America
Continental Europe 6% 11%
UK 16% 14%
North America 59% 60%
2007-2009 2010
Sample size: 345 RPO deals signed between 2007 & August 2010
Source: Everest Group (2010)
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14. Notwithstanding the high interest around global RPO,
most buyers adopted a single-country approach
in 2010
Buyer adoption by geographic scope of deal
Number of deals
100% = 228 117
10%
Global 16%
16%
Regional 19%
74%
Local 65%
2007-2009 2010
Sample size: 345 RPO deals signed between 2007 & August 2010
Source: Everest Group (2010)
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15. Large buyers continue to be the major adopters of RPO
Buyer adoption trend by size of organization
Number of deals
100% = 708
Mid-market
37%
3K-15K employees
Large-market
63%
>15K employees
Sample size: 708 RPO deals as of August 2010
Source: Everest Group (2010)
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16. Although usage of base fee plus a variable pricing
model decreased, it still remains the most frequently
used
Pricing structure trend
Number of deals
100% = 222 113
2% 5% Other
Fixed price 12%
19%
Variable price 30%
29%
Base fee plus
variable price 56%
47%
2007-2009 2010
Sample size: 335 RPO deals signed between 2007 to August 2010
Source: Everest Group (2010)
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17. Most deals in 2010 were focused around the core
recruitment processes leading to less inclusion of
ancillary processes
Inclusion of recruitment processes within RPO deals
2007-2009
Number of deals
2010
77
Strategic consulting
74
91
Sourcing
91
Core recruitment 86
 Applicant tracking 84
process
91
Screening
91
Employment offers/ 68
 selection management 66
90
Pre-employment testing
82
79
Background checking 61
Ancillary recruitment
process 71
On-boarding
54
64
Vendor management
44
Sample size: 345 RPO deals signed between 2007 to August 2010
Source: Everest Group (2010)
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18. There is still limited adoption of offshoring in RPO
compared to BAO and multi-process HRO. However,
this is gradually changing
Inclusion of offshoring Time trend of offshoring in RPO
Number of deals Number of deals
100% = 345 595 219 100% = 228 117
Includes offshore Includes offshore 17%
18% 20%
component component
48%
62%
No offshore No offshore 83%
82% 80%
component component
52%
38%
RPO BAO Multi-process 2007-2009 2010
HRO
Sample size: 345 RPO deals signed between 2007 to August 2010, 595 BAO deals signed between 2007 and April 2010 and 219 MPHRO deals
signed up to October 2009
Source: Everest Group (2010)
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19. Contents
 Market definition and overview
 Buyer adoption and solution characteristics
 Service provider landscape
 Key takeaways
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20. Service providers in the stand-alone RPO market come
from a variety of backgrounds and have varying
competitive strengths and strategies
Pure-play RPO background Contracting/staffing background
RPO
market
space
Multi-process HRO background Executive search background
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21. RPO service providers can differentiate themselves
along multiple dimensions
1
Value proposition
2
Global solution
3
Industry
specificity
Areas of
differentiation 4
Offshore leverage
5
Technology
strategy
6
Total talent
acquisition solution
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22. Identifying and assessing service provider selection
criteria
Service provider evaluation
categories and subcategories Description
Cultural fit As evidenced in the service provider’s ability to convey sensitivity to
 Partnering ability client’s concerns around quality and flexibility
 Flexibility
 Values
Solution design and quality Based on the service provider’s ability to demonstrate a compelling
 Quality of execution solution and strategic vision for its offerings
 Service levels
 Transition and operations risk
Financial impact Any defensible benchmark savings offered through case studies or
 <Number of years> cost NPV service provider’s best practices or convincingly cost-effective
 Financial risk solutions. Financial health of the service provider itself should also
be given due weighting
Service provider capability Assessment of service provider’s RPO capability in terms of scale
 Scale of current operations, scope in terms of recruitment function
 Scope capability and quality, technology capability, and geographic spread
 Technology
 Geographic delivery capability
Situation specific factors such as experience within a particular industry and type of hires/job
families should also be considered
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23. Contents
 Market definition and overview
 Buyer adoption and solution characteristics
 Service provider landscape
 Key takeaways
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24. Key takeaways for buyers and service providers of
RPO
For buyers
 Due diligence to understand service providers’ capacity situation is important in this fast growing
market place
 Integration of the solution more important than model (single provider model vs. partnership based
model) per se for a multi-country/global RPO requirements
 Global sourcing is an important lever to realize cost efficiencies
 Have provisions in the contract to protect interest in case of a provider’s acquisition
For service providers
 Not all business is good business
 Creating differentiation to stay ahead of competitors is key
 Evaluate and create partnerships on the basis of synergy accruing out of strategic, operational,
technical, and cultural alignment
 Strike the right balance between customization and standardization
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25. Forthcoming and published research in RPO
Published
Title Release Date
 Mapping onto the Workforce of Tomorrow: How RPO Can Play a Role August-2010
 Recruitment Process Outsourcing (RPO) Annual Report 2010 – A Year November-2010
of Rapid Growth and Intense Competition
 RPO - Service Provider Landscape and Capability Assessment January-2011
 Recruitment Process Outsourcing (RPO) – Service Provider Profile April-2011
Compendium
 Multi-country RPO – Hype versus Reality Q3-2011
 Contingent workforce outsourcing Q3-2011
 Recruitment Process Outsourcing (RPO) Annual Report 2011 Q4-2011
In addition to the above reports, we publish multiple point in time view point documents based on key
market developments (e.g., mergers and acquisitions, major deal, breakthrough innovation, etc.)
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26. Q&A
 Click the question mark (Q&A) button located on the floating tool bar in the bottom right of your
screen – this will open the Q&A Panel
 Be sure to keep the default set to “send to a Panelist”
 Then, type your question in the rectangular field at the bottom of the Q&A box and click the send
button to submit
Upcoming Webinar
Meter-to-Cash BPO Market for Utilities
An Opportunity for Buyers and Service Providers
Date: Tuesday, May 10, 2011
Time: 9:00 a.m. CDT; 10:00 a.m. EDT; 2:00 p.m. GMT
Presenters: Saurabh Gupta, Vice President, Everest Group
Kuldeep Lulla, Senior Analyst, Everest Group
More Information: Visit www.everestgrp.com/category/webinars
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27. For more information
 Attendees will receive an email with a link to download today’s webinar presentation.
A recording of the webinar will be available within 24 hours on our website,
www.everestgrp.com/category/webinars
 For more information related to today’s topic, please contact:
 Rajesh Ranjan, Research Director, rajesh.ranjan@everestgrp.com
 Sayan Chatterjee, Senior Research Analyst, sayan.chatterjee@everestgrp.com
 For background information on Everest Group, please visit:
 www.everestgrp.com
 www.everestresearchinstitute.com
 Thank you for attending today’s presentation
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