.The Global RPO Report 2010 produced by Kelly OCG shows the popularity of outsourcing is growing. Of those outsourcing all or part of their HR, 69% outsourced their recruitment last year, compared with 63% in 2008. The survey of 536 respondents, mainly HR managers across Europe, the Middle East and Africa, the Americas and Asia Pacific, found that utilities, IT, health, banking and finance, and professional services are the biggest outsourcers. Familiarity with Recruitment Process Outsourcing (RPO) among employers continues to rise, from 56% in 2007 to 65% in 2009.

However, Adrian Thomas, head of resourcing at Network Rail, told Recruiter that while there was a good argument for outsourcing administrative functions, such as the candidate management, where there are a lot of candidates for each job, the big trend was for recruitment to move in-house.

Thomas told Recruiter that more firms are recognising the value of talent management and this was best conducted in-house. “It enables you to hire internally and externally, to develop your staff and to promote from within,”he said.

Mark Linden, recruitment manager at Balfour Beatty Workplace agreed that more companies are going down the in-house route. The main reason is cost, Linden told Recruiter. ’If you do your recruitment internally you can save a huge amount on your bottom line.”

Ian Wolter, chief executive of Hamilton Bradshaw Human Capital and Eden Brown, agreed that outsourcing of recruitment functions and in-house recruitment would grow in popularity. However, he argued that what recruitment agencies offered is unique. “The thing that our industry does that no one else can do is be a contingency cost: payment only on results,”he said.

Wolter added that agencies were also uniquely able to deliver talent in niche markets. “The reason is that the best talent is the talent that is never looking for a job, and only our sector has sufficient proactive contact with jobseekers and potential jobseekers to identify the best talent,” Wolter said.

The survey found that most organisations are already using staffing companies selectively, with seven in 10 respondents saying they used them to fill a quarter or less of their vacancies.

Jerry Wright, joint managing director at RPO firm CPH Consulting, told Recruiter that the future lay with more direct sourcing, whether that be in-house or thorough an in-sourced/outsourced provider.

“For many organisations, the business case for direct sourcing is compelling, and with candidates getting more and more comfortable with a ’self-service’ approach to changing jobs, rather than relying on agencies, it is clear that the move to direct recruiting models will accelerate,” said Wright.

“With the sharp focus on cost reduction in the public sector, it is likely that local authorities, government departments and so on will follow the lead taken by the private sector in moving to direct sourcing,” he added.