RPO, MSP and Continent Labor Contracts Gaining Ground

In my April 16 blog “An RPO and MSP Combo: the Best of Both Worlds,” I wrote about the value of workforce solutions that are rooted in both RPO and Managed Service Provider (MSP) services to meet the dynamic and evolving needs for both contingent and permanent employee hiring. We’re now seeing an increasing number of these types of contracts being inked, and some providers are partnering to gain the breadth of offerings needed to win to-be-awarded deals.

Recently awarded contracts include:

• SourceRight Solutions’ – originally an RPO provider – multi-year deal with Siemens for provision of contingent labor procurement programs in the U.S.

• An MSP and RPO agreement between AMN Healthcare and Hendrick Medical Center

• Alexander Mann Solutions’ three-year recruitment, contingent workforce and employer branding contract in the U.K. with aerospace and defense engineering firm Cobham

Recent partnerships and M&As for the RPO/MSP combo include:

• The RightThing with ZeroChaos to provide contingent labor services alongside RPO. The RightThing, which was always considered a pureplay RPO provider, partnered with ZeroChaos to enable it to provide a broader range of recruitment solutions in today’s moving-target hiring marketplace

• AMN Healthcare acquiried Medfinders for its clinical workforce managed services program

• SourceRight Solutions and Hays, per their strategic alliance announced in 1Q10, launched WorldSource, a new service offering to manage and integrate global RPO and MSP programs. (And SourceRight Solutions also further expanded its own MSP offering)

The primary driver of escalating contract and partnership activity in this HRO segment is clear: as companies remain cautious due to continued low consumer confidence and ongoing market uncertainty, they are hiring more temporary employees and utilizing more contingent workforces than on-boarding new full-time hires. And let’s not forget buyers’ increasing desire to keep their portfolio of service providers to a minimum, particularly when in the same service line.   

The bottom line is that vendors and buyers both win with the right workforce combination that best meets clients’ organizational objectives. I believe we will continue to see additional pureplay RPO specialists looking to partner to provide MSP and contingent workforce solutions to meet continued demand. And while contingent workforce solutions can be used in any industry, I believe the nature of seasonal demand and spikes in volumes will drive more of these types of contracts in healthcare, pharma, manufacturing, retail, technology and defense.

Gary Bragar, Senior HR Outsourcing Analyst, NelsonHall

Hays and SourceRight Solutions: A Different and “Right Time” Global Recruitment Alliance

On March 16, 2010, Hays plc and SourceRight Solutions announced a strategic alliance to offer global talent acquisition solutions. The two vendors will provide customized recruiting services to clients around the world, including in the U.S., Canada, Europe, Middle East and Asia. Over the past couple of years other partnerships have been formed to offer global recruiting solutions including: Pinstripe and OchreHouse, The RightThing and Alexander Mann Solutions, and KellyOCG and IBM. So what makes the Hays/SourceRight alliance different from the rest of these partnerships?

This alliance is similar in that recruiters can be provided in-country, but Hays and SourceRight Solutions are also offering solutions that will encompass:

•  Recruitment process outsourcing (RPO)

•  Managed service programs

•  Professional contingent workforce services

Hays and SourceRight will tailor recruitment solutions that can include any combination of the above, including by industry and geography, and which can be delivered by dedicated account teams with 4,500 recruiters around the world.

Further, this more highly customized and comprehensive recruitment services alliance may be coming to market at just the right time; during the recession, permanent recruiting has been largely on hold and many buy-side organizations have been utilizing temporary hires and contingent workforces due to uncertainty of their business outlook. Tailored, multiple option recruiting solutions should open many doors between Hays/SourceRight and buyers looking for a combination of permanent placement and temporary staffing assistance from the equivalent of one provider across geographies. 

I continue to believe – as I wrote in my 2007 and 2009 global RPO market analysis reports – that global presence and the ability to partner to provide global recruiting services are critical success factors for providers in the talent acquisition space. While the global recession, which resulted in staff reductions and temporary hiring freezes, has somewhat impeded the uptake, I strongly believe the time is right for a buy-side adoption increase, especially for highly tailored, comprehensive recruitment solutions.

Gary Bragar, Lead HRO Analyst, NelsonHall