RPO, outsourcings new cash cow

New Delhi, Aug 24 | Updated: Aug 25 2007, 05:57am hrs
High attrition rates may be a blot on the great Indian BPO success story, but this problem have helped spin off a niche industryRecruitment Process Outsourcing (RPO)which is expected to grow by a billion dollar this fiscal to about $3.5 billion.

The industry is set for rapid growth with a large number of companies in India and abroad seeking to outsource their hiring-related jobs to the third-party vendors here, in order to save costs as well as time.

India has been a hub of global outsourcing activities and RPO is the sunrise segment in this sector, hiring industry umbrella body Executive Recruiters Associations executive director BR Muralidharan said.

In India, the RPO is already a $2.5 billion market and is expected to grow at a rate of 30 to 40% during this financial year, he said.

This new buzzword is already enjoying taste of success with a number of corporate giants adopting the RPO model for their hiring needs inside and outside India. The hiring needs of the British mobile major Vodafone is taken care of by RPO provider Alexander Mann Solutions, which also handled accounts of clients like Credit Suisse, HP, Prudential and Capgemini.

Closer home in India, the BPO arm of the country's third largest IT firm Wipro has outsourced its recruitment process to MeritTrac and aims to reduce its hiring costs by 15-20% by this move.

Right hiring is the first and the most important step towards reducing attrition. Our objective is to move to a 'hands-free recruiting process and this is the first step towards it, Wipro BPO CEO TK Kurien said.

Kanika Vaswani, associate partner at city-based RPO service provider the Elixir Web Solutions said, RPOs have been a well-accepted tool in the mature markets. This allows an HR manager to focus on other core functions. Elixir started its RPO business about six years back, catering to the information technology clients.