A series of global phenomena, such as a prolonged, negative economic outlook, the Great Resignation, huge layoffs, and remote and hybrid working, have resulted in enterprises shifting from traditional recruiting to talent acquisition. These phenomena have resulted in decreased budgets for recruitment and driven up costs related to talent acquisition. They have also accelerated the trend of skill-based hiring among businesses. Today, enterprises face many challenges that hinder their recruitment transformation initiatives. Service providers are rising to this occasion and improving their service, delivery, and technology capabilities through acquisitions and product innovations. Enterprises are also reducing their dependence on traditional recruitment agencies and forming partnerships with end-to-end talent acquisition providers that offer a wide range of services apart from traditional recruiting. This has led to an 11%–16% growth in talent acquisition outsourcing from March 2022 to March 2023 and a 23.9% growth in combined average service provider revenue from FY 2022 to FY 2023.
Both demand-side and supply-side trends are covered in our Talent Acquisition Business Process Transformation 2023–2024 Market Insights™ and Talent Acquisition Business Process Transformation 2023–2024 RadarView™, respectively.
These reports present a comprehensive study of talent acquisition providers and closely examine market leaders, innovators, disruptors, and challengers.
Avasant evaluated 42 service providers across three dimensions: practice maturity, domain ecosystem, and investments and innovation. Of the 42 providers, we recognized 15 that brought the most value to the market during the past 12 months.
The RadarView recognizes service providers in four categories:
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- Leaders: AMS, Cielo, IBM, Korn Ferry
- Innovators: Accenture, Hays Talent Solutions, Randstad Sourceright, WilsonHCG
- Disruptors: Exela Technologies, Hudson RPO, KellyOCG, PeopleScout
- Challengers: AgileOne, Sevenstep, Teleperformance
Figure 1 below from the full report illustrates these categories:
“The recruitment function has evolved from being transactional to incorporating strategic elements that ensure workforce stability during times of stress,” said Avasant Partner Shabnum Grewal. “Enterprises are now outsourcing key subprocesses, including workforce planning, recruitment marketing, and talent analytics.”
The reports provide several findings, including the following:
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- The prolonged economic outlook of declining growth and high inflation has hampered recruitment initiatives.
- The Great Resignation and huge layoffs have led to reduced talent pools and increased cost of hiring.
- Talent acquisition outsourcing has undergone significant changes over the past couple of years. Enterprises are now understanding the importance of reducing their dependency on recruitment agencies and outsourcing strategic recruitment processes, leading to an 11%–16% growth in talent acquisition outsourcing from March 2022 to March 2023.
- Service providers are assisting businesses with increasing enterprise demand, leading to a 23.9% growth in combined average service provider revenue from FY 2022 to FY 2023.
- Talent acquisition service providers possess global delivery capabilities. Europe is the most important delivery region, accounting for 36% of all service providers’ offices/delivery centers, followed by Asia-Pacific at 31%.
“The talent acquisition function is becoming increasingly technology-driven, thanks to service providers’ constant innovation,” said Biswadeep Hazra, senior research analyst at Avasant. “Though manual processes still prevail in talent acquisition, they are expected to decline with the use of new technologies such as generative AI.”
The RadarView also features service providers’ detailed profiles, solutions, offerings, and experience assisting enterprises in their recruitment transformation journeys.
This Research Byte is a brief overview of the Talent Acquisition Business Process Transformation 2023–2024 Market Insights™ and Talent Acquisition Business Process Transformation 2023–2024 RadarView™ (click for pricing).
